While confusion still abounds concerning sales tax on Internet purchases, it’s important for eCommerce store owners to remain in the know when it comes to this important issue.
On October 1, 2019, four more states have enacted or updated economic nexus laws according to our partner, TaxJar. These states are Arizona, Kansas, Massachusetts, and Tennessee.
Additionally, merchants who sell products on marketplaces including Amazon, eBay, Etsy, and Walmart should pay attention as well. Orders shipped to certain states are now being charged sales tax which is collected by the marketplace. According to TaxJar, these states include:
- Arizona: (eBay, Etsy and Walmart)
- California: (Amazon, eBay, Etsy, and Walmart)
- Colorado: (eBay, Etsy, and Walmart)
- Maine (eBay, Etsy, and Walmart)
- Maryland (eBay, Etsy, and Walmart)
- Massachusetts (eBay, Etsy, and Walmart)
- Nevada (eBay, Etsy, and Walmart)
- North Dakota (eBay and Etsy)
- Texas (eBay, Etsy, and Walmart)
- Utah (eBay, Etsy, and Walmart)
- Wisconsin (Etsy is collecting 10/1/19, but the law doesn’t take effect until 1/1/2020)
eBay notified sellers of this change via an email earlier this week, saying:
“As you may be aware, 11 new states have adopted Internet Sales Tax policies as of October 1, bringing the total to 34 states that now require the collection of sales tax. As the impact of this tax law becomes more apparent, PayPal and eBay are making changes that will make Internet Sales Tax collection less complex for buyers and for you.
Starting in November 2019, the way taxable transactions are processed and how taxes are collected for remittance will change, as follows:
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- In states where eBay is required to collect Internet Sales Tax from buyers, order totals sent for processing will reflect the gross order amount inclusive of tax.
- Once settled, the tax amount will be automatically deducted for remittance to the applicable taxing authority.”
At Your Store Wizards, we know how muddy the waters are when it comes to collecting tax on Internet purchases. That’s why we’ve partnered with TaxJar, a leader in Internet sales tax automation, calculation, reporting, and filing.
Whether your eCommerce business is powered by Yahoo! Store, BigCommerce, Shopify or another platform, we can integrate TaxJar with your store so you can rest assured knowing sales tax is being handled properly.
For more information on TaxJar, please fill out the form below and we’ll be in touch. In the meantime, check out this information from TaxJar about the changes that went into effect on October 1st.
Disclaimer: The information contained in this post is for informational purposes only and is not to be considered professional advice. Sales tax laws continually change and it is recommended you contact a sales tax expert or your accountant regarding specifics for your business.
Scott Sanfilippo began his eCommerce journey in 1994 by co-founding one of the Internet’s first online retailers, TheFerretStore.com, which was acquired by PetCo in 2006. In 2001, he co-founded the eCommerce design and marketing firm Solid Cactus, which was acquired by web.com in 2009. Today, Scott is the General Manager of Your Store Wizards and lives in Delray Beach, FL. Scott can be contacted at scott@yourstorewizards.com.