I buy a lot of little things I find on Ebay and it got me wondering. Don't these sellers have to pay taxes on these sales? While I buy just a few items, I noticed that at times they are from the same seller, and they have hundreds of item listed. Thank you.

This is a much debated issue. In my State, the final responsibility for paying sales tax is on the buyer, in the case where the seller does not collect it... so our State tells eBayers to report the purchases and pay state sales tax on it.

Well actually I was wondering on the taxes to be paid by the seller since it is income!

Yes, they should be reporting the income (profit after expenses) and paying taxes on it.

But they don't.

Each state and province has their own sales tax laws.

For example, if I sell something on Ebay to someone who lives in my province of Ontario, I MUST charge them 8% PST.

If they live somewhere else, I do not have to charge them.

Do many people actually do this? Not really, especially if you are only selling a few items.

But if you plan to conduct a legitimate business via eBay, you should educate yourself about all the various tax laws.

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Originally Posted by RickJ

Yes, they should be reporting the income (profit after expenses) and paying taxes on it.

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It is not a sales tax question as I see it but more of an income tax issue. The majority of eBay users are selling for less than they paid, such as an online Garage sale therefor there is no real income after expense. For those running a business such as buying from wholesalers and reselling at a profit they would be responsible to report it on their yearly tax return. As for buying low and selling high from private parties.. . Way to difficult to police for the tax agencies.