How to charge sales tax drop shipping with Ebay?

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I'm drop shipping from a big retailer to a customer in a state that has a sales tax. I understand when I buy the product to ship from the retailer I pay sales tax then for the destination of the product, depending on the state. Now isn't there also a sales tax on the transaction separately? This is what I don't get. I feel like I'm supposed to register with each state to collect sales tax on my transactions I make there. Then quarterly pay those taxes back to each states office. Is this correct? I am really new to this. I've just made one sale yesterday so I need to make sure I understand everything moving forward.

Thank you in advance!
#charge #drop #ebay #sales #shipping #tax
  • Profile picture of the author mich800
    You are the retailer. You should not be paying sales tax. Sales tax is what the end purchaser pays. Unless you are just buying retail arbitrage. I am assuming you have a wholesale business arrangement with your vendor.
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  • businesses dont pay sales tax BUYERS PAY SALES TAX....
    businesses collect & pay quarterly to each of the 48 states...
    if your doing anything else watch shopify for 3 weeks straight or so it will show you. think i know where your going with this as in how do you reimburse yourself taxes you have spent on items. you dont unless you enjoy a room made of concrete with bad food.
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  • Profile picture of the author dave_hermansen
    Sorry, but some of the answers here are far too simplistic. There are sales tax nexus laws at play here and if your supplier has a warehouse in the shipping destination state, it may very well create a situation where YOU are charged sales tax unless you have a resale tax certificate for that state.

    If you have a resale certificate for the state it is being shipped to and that customer is supposed to pay sales tax because you or your supplier has a warehouse/office in that state, you will be required to remit sales tax for that order to that state, whether you collect the tax from the customer or not.

    If you DO NOT have a tax resale certificate for the state it is being shipped to and that customer is supposed to pay sales tax because you or your supplier has a warehouse/office in that state, YOU will be charged sales tax from your supplier, which you can pass down to the customer or eat it, yourself. In that case, you would not be remitting anything to that state because your supplier charged the sales tax to you and is responsible for remitting it.

    Every state has different laws concerning what comprises a sales tax nexus. In some cases, your supplier having a warehouse or office there does not create a nexus. In other states, it does. You'll know based upon what your states your supplier tells you they have to charge sales taxes for.
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