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Amazon to eBay Arbitrage Sales Tax

Discussion in 'Ebay' started by balward, Nov 16, 2014.

  1. balward

    balward Newbie

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    For those of you that have done Amazon to eBay arbitrage, what have you done for items where Amazon charges you sales tax? Is it okay to create a tax table on eBay to charge the same states you deliver to according to Amazon?
     
  2. slevin711

    slevin711 Newbie

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    It is not ok. Some people get away with it for awhile, but once you start filing taxes, the IRS will notice and the hammer of the law will penalize a ton.

    In order to charge tax to another state, you must have a sales tax id in that state, or you must have nexus (a physical presence), such as property or an employee in that state.
     
  3. bartosimpsonio

    bartosimpsonio Jr. VIP Jr. VIP Premium Member

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    I don't see how this is illegal. You pay tax, then you own the item and you can resell it legally.

    But you gotta embed the tax into your resale price at ebay, and not offer any tax discount or whatever. Just don't mess with the tax after you pay it. Add the tax to the price and if it's not lower than Ebay competitors then you just found out why (tax).
     
  4. LastBlow

    LastBlow Junior Member

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    Agreed just include it in your markup on price
     
  5. slevin711

    slevin711 Newbie

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    You are both wrong. In order to charge someone tax for resale in a state, you need to have 'nexus'in that state. Live there, own property, have an employee that lives there. Otherwise, this is tax fraud. It's fine if you don't want to take my word for it. But before you commit tax fraud, I would do a free consultation with a tax accountant, which is one of my professions as well. I also have several friends that work for the IRS in the capacity of investigating and doing audits on small to mid-size businesses. I can guarantee you this is the law and what is enforced. I understand your point of view and I understand how it makes sense in your mind, but if you want to do it right, either obtain nexus in the state in which you plan to obtain tax, or charge tax for only where you have nexus.

    There are many businesses that get away with this, and very publicly in ebay's case, but do you really want to take this risk?
     
    • Thanks Thanks x 1
  6. alex1944

    alex1944 Newbie

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    That is VERY good to know. Thanks! I don't imagine they allow laptops in Federal Prison to continue marketing. I agree that a little research can go a long way in keeping one's head above water.

    Thanks, alex1944