eBay Sales Tax Guide for Sellers
Complete guide to understanding sales tax when selling on eBay. Learn when eBay collects for you and when you're responsible.
eBay is a Marketplace Facilitator
As of 2019-2021 (rolled out state by state), eBay automatically collects and remits sales tax on behalf of sellers in states with marketplace facilitator laws.
✓ eBay Collects Sales Tax In:
Most U.S. states where marketplace facilitator laws apply (currently 45+ states).
This includes California, Texas, New York, Florida, Pennsylvania, and most other states.
What this means for you: You don't need to collect, report, or remit sales tax on orders shipped to these locations. eBay handles it automatically at checkout.
When You're Still Responsible
⚠ You Must Handle Tax For:
- States without marketplace facilitator laws - Very few remain (check current list)
- Local pickup orders - If customer picks up in person
- Off-platform sales - Direct sales outside eBay
- Commercial/B2B sales - Business-to-business transactions
- International orders - VAT and import taxes vary by country
Note: Missouri is one of the few remaining states where eBay does NOT collect sales tax (as of 2024). Always check eBay's current marketplace tax collection page for updates.
How eBay's Tax Collection Works
At Checkout:
- eBay calculates sales tax based on buyer's ship-to address
- Tax is added to the order total
- Buyer pays the tax directly to eBay
- You receive your sale price (tax not included in your payout)
Behind the Scenes:
- eBay collects tax from buyers
- eBay files sales tax returns with states
- eBay remits collected tax to state governments
- You don't need to do anything
On Your Reports:
- Sales tax collected by eBay appears separately
- Your payout = Item price + Shipping - eBay fees
- Tax is not included in your gross sales
How to Verify eBay is Collecting Tax
- Log in to eBay Seller Hub
Access your seller dashboard
- Go to Account → Site Preferences → Payments from buyers
Find the tax settings section
- Review "Sales tax collection"
See list of states where eBay collects automatically
- Check individual orders
Look for "Tax collected by eBay" in order details
- Download sales reports
Performance → Payments → Transaction report shows tax separately
Good news: You don't need to configure anything. eBay enables marketplace tax collection automatically for all eligible states.
eBay Tax Collection by State
| State | eBay Collects? | Effective Date | Notes |
|---|---|---|---|
| California | Yes | Oct 1, 2019 | Includes district taxes |
| Texas | Yes | Oct 1, 2019 | State + local taxes |
| New York | Yes | Jun 1, 2019 | One of the first states |
| Florida | Yes | Jul 1, 2021 | Later adoption |
| Pennsylvania | Yes | Apr 1, 2018 | Early adopter |
| Missouri | No | N/A | Seller responsible |
Common Mistakes eBay Sellers Make
❌ Manually Adding Sales Tax Settings
Don't configure sales tax tables in eBay settings for marketplace facilitator states. eBay handles it automatically. Old tax tables can cause double taxation.
❌ Thinking Tax is Part of Your Income
Sales tax collected by eBay is not your income. Don't report it as income on your tax return. Only report your sale proceeds.
❌ Ignoring Off-Platform Sales
If you sell directly to customers or use other platforms, you're still responsible for collecting and remitting tax on those sales.
❌ Not Handling Missouri Sales
Missouri is a notable exception. If you have nexus there and sell to MO buyers, you must collect and remit tax yourself.
❌ Forgetting About International VAT
eBay's automatic collection only applies to U.S. sales tax. International buyers may owe VAT or import duties.
eBay vs Other Platforms
| Platform | Marketplace Facilitator? | Who Collects Tax |
|---|---|---|
| eBay | Yes (most states) | eBay collects automatically |
| Amazon | Yes (all states) | Amazon collects automatically |
| Etsy | Yes (all states) | Etsy collects automatically |
| Shopify | No | You must collect and remit |
Tools for eBay Sellers
Disclaimer: This guide is provided for informational purposes only and does not constitute tax, legal, or accounting advice. eBay's tax collection policies may change, and laws vary by state. Always verify current information with eBay Seller Hub and consult a tax professional for your specific situation.
Looking for more seller tools? Check out marketfees.app