IL sales tax

[mircpa]

Hello all

I have this question regarding sales tax reporting. Client of mine is online retailer based in IL. He sells stuff on Ebay. Before remitting payment for sales to client, Ebay is deducting their fee & sales taxes & remitting money net of these two amounts. Until now the rule was IL retailer was not suppose to charge sales taxes & take deduction for interstate commerce for sales to buyers of out of state. I am little confused how to report this sales on IL sales tax return. Does this online companies been directed by sales agencies to remit sales taxes recently I am unaware of this. Is anybody aware of any recent changes.

[ILLMAS]

If I understand correctly, Ebay is holding on to the sales tax amount? 

[mircpa]

Correct. Ebay is holding on sales tax amount.  Funny part is client is not saying anything regarding sales tax % on listing, but Ebay is deducting XX amount toward sales tax & remitting difference to retailer.

[ILLMAS]

I remember sometime last year Amazon in IL was required to collect sales, I am thinking either Ebay has to adhere to same rules as Amazon.  But as to out of state sales, there shouldn't be any sales collected, however I do see Amazon/Ebay collecting the end-user Use Tax for their respective state.

[mircpa]

Thansk @ILLMAS

Should I just continue reporting out of state sales as deduction interstate commerce on page 2 of IL ST-1 and treat taxes collected by Ebay as business expense.

[Catherine]

22 hours ago, mircpa said:

Correct. Ebay is holding on sales tax amount.  Funny part is client is not saying anything regarding sales tax % on listing, but Ebay is deducting XX amount toward sales tax & remitting difference to retailer.

This happened to my husband when he sold a personal item.  He submitted a complaint to ebay and got the money they withheld.  Have your client contact ebay.

[Edsel]

The Supreme Court ruling in 2017 did away with the sales tax exemption on interstate sales for companies over a certain revenue amount - I think $2 million.  Giant companies like Amazon were getting away with selling gazillions of dollars outside of Washington and not having to charge sales tax.