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Amazon to Ebay Sales Tax Question
 

Question about sales tax.

Let's say I sell a $40.00 amazon item for $50 on ebay.

Now let's say it's shipped to a customer in New York. I'll pay $43.55 on amazon instead of $40, which would mean I'd break even.

So to prevent that, I'll match the sales tax table on Ebay to approximately the one on Amazon, so Instead of $50 i've sold it for $54.44.

Don't I have to pay the $4.44 to the government at the end of the year? Or do I not deal with sales tax because I've paid it to amazon already and I never physically own the product?

Thoughts appreciated. Thank you.

Re: Amazon to Ebay Sales Tax Question
 

You would need to talk to an account for clarification on that

Re: Amazon to Ebay Sales Tax Question
 

Welcome to the forums OP - forum deals with use of stealth method and not really financial advice/plan/scheme/tax

Re: Amazon to Ebay Sales Tax Question
 

Im assuming you're doing Amazon -> eBay arbitrage (which is exactly what I do at a fairly decent scale), that being said I'll just leave this.

1) Yes, you can technically do that in order to keep your margins, and if you don't sell that much it won't get un-noticed.

2) Once you start getting to scale, start reporting your income to the gov. during tax season, or even if a customer asks why you are asking for addtl. $ regarding taxes and you do not have a legitimate reason - you can get into big trouble.

Yes, eBay really does ignore this issue, but that doesn't mean it will not become a problem long term. The basic rule is, unless you are absolutely sure you can legally collect sales tax, you shouldn't fill out that tax table.

Personally, when I started I filled out my sales table, but I found the long-term risk out-weighs the benefits of trying to sneak in Sales Tax on eBay sales.

Re: Amazon to Ebay Sales Tax Question
 

You pay the $4.44 to the government. ALL money collected as sales taxes from your customers must be turned over to the government even if you did so in error. If you have a legit company and have a tax ID you may be able to write sales taxes paid off on Amazon purchase off when you file taxes.

Re: Amazon to Ebay Sales Tax Question
 

I don't recommend doing this at all. All funds collected from your customers as sales taxes must be forwarded to the state equalization board, even if you collected the funds in error or you had no authority to collect these funds. You will be legally 100% held responsible for paying all funds to the state equalization board.

Re: Amazon to Ebay Sales Tax Question
 

Hi,

I am curious about this topic. I'm also getting into Amazon -> eBay arbitrage and see many sellers that collect sales tax in multiple states. Basically all the big players seem to collect sales tax - i found more than a few big sellers with revenue over $500K/month and all of them collect sales tax.
couldn't find even one player at this size that does not collect sales tax...

would you assume they go into the intensive work of filling sales tax in all the states? my guess is they would, this is a serious issue with severe penalties for not remitting taxes. but I see a lot of indications that they do not remit taxes - some of them collect wrong %, others collect in many more states than the ones that amazon have warehouses - so they don't even need to collect there. and above all - it seems that if they remit the taxes they make 0 profit... they are always price leaders and the pricing is almost exactly at cost of purchase on amazon.com + ebay & PP commissions...

any thoughts to share?

Re: Amazon to Ebay Sales Tax Question
 

You should consult a tax professional.

If you collect sales tax, you must turn it over to the appropriate governmental authority, without exception. You may not under any circumstances keep that money yourself.

If you do not collect sales tax and you were supposed to, you must pay it yourself.

Re: Amazon to Ebay Sales Tax Question
 

hi dallis, thank you for answering.

I understand the rules and aware of the importance of remitting taxes and the big risk in not doing so (as i wrote)

What I am puzzled with is how these sellers make any profit? I looked at more than a few items from such sellers and there is 0 profit in their activity if they remit the collected taxes. maybe my question should be a different one - how do these sellers make money, maybe i a missing something and it is not the taxes.... I will put a new question for that end with samples

Re: Amazon to Ebay Sales Tax Question
 

Just wanted to be sure you don't make a terrible mistake with the taxes.

I often wonder how people profit at the price they are selling product.

On the other hand, I once walked into JC Penny in February and they had surplussed / clearanced all the winter gear. I bought kids long sleeve dinosaur and character shirts for $2, and ended up reselling them at below list price for $16/18/20 per.

I bought nearly 1000 of them over the next several days at every store in town, sometimes I had two shopping carts full at a time, and it took an hour just to ring them up. :) The clerks thought I was crazy!

I had to hold most of them until the following winter, but they all sold.

One year in Walmart in the fall they clearanced girl's 2-piece Spongebob swimsuits, they marked them down to $.60 each, I went to every store in town and bought several hundred of them, sold them for close to the regular price of $12 each the next spring / summer.

A lot of people make a great living at this kind of retail arbitrage.

Re: Amazon to Ebay Sales Tax Question
 

Discounted gift card + cash back site.

Re: Amazon to Ebay Sales Tax Question
 

This is a very technical issue on which state you live in. The 4.44 you charge over if that is what is required, would be needed to be turned in to your tax authority. I take it you are in a state that require taxes on most transactions. I take it this is local and state tax? I do not know your state and local laws.

In general, if you are in a state that requires only in-state sales to be part of nexus, then you only claim those for state taxes. The rest of your sales are FEDERAL, if they are in fact out of state. You would simply upload your sales totals minus your expenses in the software to do your taxes. Then you account for other cost in other areas to see your adjusted net profit.

If you don't have any experience in this area, I would highly suggest a professional to do your taxes for you. It is very low cost and makes for security in knowing your returns are right. In the mean time, study YOUR state's law requirements on online transactions. This is coming from an actual accountant, as I am one.