Every day in the U.S., 40,000 pairs of shoes are sold on eBay, according to the e-commerce giant. And as of 2019, more shoppers are going to have to start paying sales tax on those purchases.
In the wake of the U.S. Supreme Court’s South Dakota v. Wayfair Inc. decision, which opened the door for states to require online sellers to collect sales tax on out-of-state purchases, legislation has proliferated around the country extending tax mandates to both large retailers and merchants of all sizes who sell through e-commerce marketplaces. (Previously, online retailers only had to collect tax from customers located in states in which they had a significant physical presence in a state, such as an office or a warehouse.)
As of Jan. 1, eBay buyers in Washington and Minnesota will begin seeing sales tax added to their total at checkout, and on July 1, shoppers in Pennsylvania and Oklahoma will join the fold. Thanks to new legislation in these states extending tax obligations to marketplaces, eBay itself will calculate, collect and remit the taxes, rather than merely instructing individual sellers to do so (which they may or may not comply with).
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In a note to sellers in September, the company wrote, “There are no opt-outs for selling items into the states listed above or out of eBay automatically collecting sales tax for items shipped to the states above.” The new service applies to both domestic and international orders placed from customers in the four states.
Amazon has a head start on eBay, having initiated marketplace tax collection in six states — Washington, Connecticut, Minnesota, Iowa, Oklahoma and New Jersey — in 2018, with Iowa and Alabama added on Jan. 1. Etsy, too, began collecting and remitting state taxes in 2018 from buyers in the four states eBay is now complying with.
With its thriving resale market, eBay’s new requirements will likely have the biggest impact on sneaker fans, though: If, for instance, a collector in Minneapolis snapped up the most expensive pair sold on the platform in 2018 — the Nike Air Jordan Kobe PE, which sold for $20,000 — the bill would have at least an extra $1,375 added in state sales tax at the current base rate of 6.875 percent. (More realistically, a $200 pair would see $13.75 added to the total.)