eBay sales tax is collected and paid to the state by eBay, not by you, on every order shipped to 46 US states, Washington DC and Puerto Rico. Marketplace facilitator laws moved that job to eBay between January 1, 2019 and January 1, 2023, so the buyer pays the tax at checkout and eBay remits it. What stays with you: the final value fee eBay charges on that tax, any permit your home state requires, and the sales tax your suppliers charge you.
This guide covers the sales tax on your eBay orders only. For income tax, Schedule C and the IRS form, read our eBay 1099-K guide. For nexus thresholds and selling on your own store, see the dropshipping tax guide.
Does eBay collect sales tax for sellers?
Yes. eBay calculates, collects and remits sales tax on behalf of sellers for every order delivered to a state or territory with a marketplace facilitator law, which today covers 46 states, DC and Puerto Rico. eBay's Taxes and import charges page says no action is required on your part, there is no charge for the service, and the rule applies whether you are located in or outside the United States.
Two details from that page matter more than most sellers realize:
- You can't opt out. eBay states that sellers can't opt out of selling into those states or opt out of eBay collecting the tax.
- Location doesn't change it. A seller in Oregon (no sales tax) shipping to a buyer in Ohio still sees Ohio tax added to the order, because the tax follows the delivery address.
eBay's list leaves out the four states with no general sales tax: Delaware, Montana, New Hampshire and Oregon. Alaska has no state sales tax, but eBay collects local tax in Alaska towns that joined the Alaska Remote Seller Sales Tax Commission.
When did eBay start collecting in each state?
| Phase | States (eBay effective date) |
|---|---|
| First wave | Minnesota and Washington (January 1, 2019), Iowa (February 1, 2019), Connecticut (April 1, 2019) |
| Most states | 2019, for example New York (June 1), Pennsylvania (July 1), California and Texas (October 1) |
| 2020 | For example Illinois, Michigan, Wisconsin (January 1), Georgia (April 1), Louisiana and Mississippi (July 1), Tennessee (October 1) |
| 2021 | For example Puerto Rico (January 1), Florida and Kansas (July 1), Alaska local jurisdictions (November 1) |
| Last | Missouri (January 1, 2023) |
If an old forum post says "eBay doesn't collect tax in Florida" or "Missouri buyers pay no tax", it was written before those dates.
What else does eBay collect besides sales tax?
eBay also collects several state fees as the marketplace facilitator. The Colorado retail delivery fee ($0.31 per taxable sale), the Minnesota retail delivery fee ($0.50 on sales of $100 or more), the California lumber fee (1% of the item price), plus mattress, tire, battery, e-waste and prepaid wireless E911 fees in the states that charge them. Like sales tax, these land on the buyer's total, and you do nothing.
How does eBay calculate sales tax on an order?
eBay calculates sales tax from the buyer's delivery address, using the rate for that address, local taxes included. The item location and your registered address don't set the rate. Alabama is the one flat exception in eBay's list: eBay collects Alabama's simplified sellers use tax at a flat 8% on taxable sales delivered into the state.
Whether shipping is taxed, and whether an item category is exempt, follows each state's rules. eBay applies them; you don't set anything in your listing for marketplace states.
The only time you configure tax yourself is the sales tax table in Seller Hub. eBay's help page limits it to "some US territories where eBay is not required to collect and remit sales tax". If you set a rate there, you collect the tax and you remit it. For a seller shipping to the 50 states, the table should stay empty.
Do you pay eBay fees on sales tax?
Yes. eBay's final value fee is a percentage of the total amount of the sale, and eBay's selling fees page lists sales tax inside that total along with the item price, shipping and handling. eBay's own fee example charges 13.6% on a $424 total that "includes 6% sales tax".
Here is what that costs on a typical dropshipped item in most categories (13.6% final value fee, no eBay Store):
| Item only | Item plus 8% sales tax | |
|---|---|---|
| Buyer pays | $40.00 | $43.20 |
| Amount the fee is calculated on | $40.00 | $43.20 |
| Final value fee at 13.6% | $5.44 | $5.88 |
| Extra fee caused by the tax | $0.44 |
$0.44 looks small. Across 500 sales a year at that price it is about $220 in fees charged on money you never receive. You can't avoid it, so price for it: run your numbers through the free eBay fee calculator and leave a small buffer for buyers in high-tax states.
How does eBay sales tax show on your orders and payouts?
eBay shows the tax as a separate line on the buyer's order total, and eBay keeps it to pay the state. It is not part of the sales income you report.
Three places to check it:
- The order. The buyer's total includes the tax line. The tax is calculated at checkout once the buyer confirms the shipping address.
- Form 1099-K. eBay's 1099-K help page says sales tax and canceled transactions are excluded from the gross amount it reports. If your own records include tax, they won't match the form.
- Your transaction report. The CSV in Seller Hub (Payments, then Reports) has a "Seller collected tax" column. That column is for tax you charged yourself through a tax table, so for marketplace states it should be empty.
The IRS agrees with how eBay treats it. Publication 334 says state and local sales taxes imposed on the buyer, which a business was required to collect and pay over, are not income.
What do you tell a buyer who asks about the tax?
Tell the buyer that eBay, not you, sets and collects the sales tax based on their delivery address, and you can't remove it. A tax-exempt buyer can submit exemption certificates through eBay's Buyer Exemption program and buy without tax after eBay verifies them, which takes up to 10 business days. eBay also notes that a buyer may be able to get a credit for tax already paid directly from their state.
Do eBay sellers pay tax on their own eBay fees?
Some do. eBay collects sales tax on certain seller fees for sellers registered in four states: South Dakota (Store subscription fees, since August 1, 2024), Texas (Store subscription fees, insertion fees and a portion of final value fees, since October 1, 2025), Washington (Promoted Listings and listing upgrade fees, since October 1, 2025) and Hawaii (general excise tax on selling fees, since November 1, 2025). The amount appears on your monthly tax invoice, not on the order.
Do you still need a sales tax permit as an eBay seller?
It depends on your home state, and two large states give opposite answers:
- California: the CDTFA's marketplace facilitator guide says that if all of your retail sales are facilitated by a registered marketplace facilitator, you are not required to register for a seller's permit. Any sale outside a registered marketplace, such as your own website, can bring the registration requirement back.
- Texas: the Comptroller says remote sellers who sell only through a marketplace provider don't need a Texas permit, but a seller located in Texas "is still responsible for having a Texas tax permit", even if every sale goes through a marketplace.
Most states fall somewhere between those two, and the deciding facts are where you live, whether you hold inventory, and whether you sell anywhere besides eBay. Shopify is the common trigger: a Shopify store is your own storefront, not a marketplace facilitator, so the tax on those orders is yours to collect and file.
This is the one place in this guide where your situation matters more than the rule. Talk to an accountant who works with online sellers in your state before you register for anything or decide you don't need to.
Can you use a resale certificate when buying from suppliers?
A resale certificate lets a business buy goods it will resell without paying sales tax to the supplier. California's CDTFA says purchasers engaged in the business of selling tangible personal property may issue one, and that it should not be used for items you will use personally or use in your business before selling.
How it plays out with the platforms dropshippers use:
| Where you buy | Exemption program | What to know |
|---|---|---|
| eBay (buying from other sellers) | eBay Buyer Exemption program | Upload your exemption documents; eBay accepts MTC and SST multistate forms where a state requires them and verifies within 10 business days |
| Amazon | Amazon Tax Exemption Program (ATEP) | Resale is a listed exemption type. Amazon doesn't accept a sales tax permit or W-9 as enrollment proof, applies the exemption by ship-to state, and not every third-party seller participates |
| Walmart | Walmart Business Tax-Exempt Program | Requires a valid state-issued exemption or resale certificate for each state where you take possession of the merchandise; most enrollments expire after three years |
| Wholesale suppliers | Supplier's own process | Ask which certificate form the supplier accepts and for which states |
Notice the Amazon and Walmart rules key on the destination state. A dropshipped order goes to your buyer's state, not yours, so a certificate from your home state may not cover it.
There is a bigger problem with those two rows than tax. eBay's dropshipping policy allows fulfilling orders from a wholesale supplier, but states that "listing an item on eBay and then purchasing the item from another retailer or marketplace that ships directly to your customer is not allowed on eBay." Buying from Amazon or Walmart retail to fill eBay orders is that model, and eBay can remove listings, restrict your account or suspend it. Our eBay dropshipping policy guide covers what qualifies as a wholesale supplier.
Do dropshippers pay sales tax twice?
Often, yes, and it isn't an eBay error. Your buyer pays sales tax to eBay on the sale. Separately, your supplier may charge you sales tax on your purchase when it ships into a taxing state and you have no resale exemption on file with them. Those are two different transactions, and nobody refunds the second one automatically.
The IRS treats the second tax as a cost, not a loss. Publication 334 says that if the property is merchandise bought for resale, the sales tax is part of the cost of the merchandise. So the $2.00 tax on a $25.00 supplier order makes your cost of goods $27.00 on your Schedule C.
What can go wrong with eBay sales tax?
eBay handles collection, so the risks sit on your side of the order. These are the ones with real money or penalties attached:
Misusing a resale certificate
A resale certificate is a legal statement, not a coupon. California's Regulation 1668 sets a penalty of 10% of the tax or $500, whichever is greater, for each purchase made with a resale certificate for personal gain or to evade tax. If you buy something tax-free for resale and then use it yourself, you owe use tax on its cost. The CDTFA adds that intentional misuse can lead to criminal prosecution. Buying your own laptop or label printer "for resale" is exactly the use the CDTFA rules out.
Paying supplier sales tax without tracking it
If you never record the tax on supplier invoices, you understate your cost of goods and overstate profit. On thin dropshipping margins, a few percent of tax on every order is a real share of what you keep. Track it per order, or set up the supplier's exemption process if you qualify for one.
Adding your own tax on top of eBay's
eBay limits the Seller Hub tax table to territories where it doesn't collect. If you filled in state rates years ago, open the table and clear any you no longer need, so your listings don't carry a rate you can't explain.
Building on a retail arbitrage supplier
Paying Amazon or Walmart sales tax on every order is a symptom of the retail-to-eBay model eBay's policy doesn't allow. The tax is the smaller cost; the account is the bigger one.
How does eBay handle UK and EU VAT on imports?
eBay collects UK and EU VAT itself on most low-value imports bought through eBay, the same way it collects US sales tax. eBay's VAT obligations page sets these thresholds:
| Destination | eBay collects VAT or GST at checkout | Above the threshold |
|---|---|---|
| United Kingdom | Imports up to £135 | Buyer pays import VAT at customs |
| European Union | Imports up to €150 (France: any value) | Buyer pays import VAT at customs |
| Australia | Orders up to AU$1,000 | GST collected at the border |
| New Zealand | Orders up to NZ$1,000 | GST collected at the border |
| Norway | Items up to 3,000 NOK | VAT collected at the border |
eBay collects VAT on the full value including shipping. For EU shipments it handles, eBay gives you its IOSS number, and you must pass it to the carrier in the customs data. eBay warns that if the IOSS number is missing, buyers may be asked to pay VAT a second time. The EU also charges a €3 customs duty on goods valued at €150 or less and a €2 Union Handling Fee on goods from outside the EU; eBay International Shipping collects both at checkout.
Based in the UK? The 1099-K guide linked above also covers HMRC's reporting rules for eBay UK sellers.
How to keep eBay sales tax records clean
Clean sales tax records come down to matching three documents per order: the eBay order, your supplier receipt, and eBay's monthly reports. Do it as you go, not in April.
- Download eBay's reports monthly. Transaction report and tax invoice from Seller Hub, and the 1099-K detailed report when it arrives by January 31.
- Save every supplier receipt with the tax line visible, filed against the eBay order number.
- Note the destination state for supplier orders that charged tax, so you can see where an exemption would help.
- Price for the fee on tax, not just the item price.
Matching receipts to orders is where most sellers fall behind. SuperDS Orders Sync copies your eBay orders into the SuperDS dashboard through the Chrome extension, with the order number, buyer, amount, date, status and the supplier the product came from in one list. It doesn't place the supplier order for you; you still buy from the supplier, and the list makes it quick to match each receipt to its eBay order. Orders Sync is included in every plan, starting with Basic at $29.99 a month.
eBay sales tax checklist
- eBay collects and remits sales tax in 46 states, DC and Puerto Rico. Don't add your own.
- Seller Hub sales tax table: empty, unless you owe tax in a territory eBay skips.
- Price for the final value fee (13.6% in most categories) charged on the tax as well as the item.
- Sales tax is excluded from your eBay 1099-K. Keep it out of your income records too.
- Check your home state's permit rule: California exempts marketplace-only sellers, Texas doesn't exempt sellers located in Texas.
- Selling on Shopify or your own site too? Those orders are your sales tax to collect.
- Use a resale certificate only for goods you will actually resell.
- Record supplier sales tax as part of cost of goods.
- Source from wholesale suppliers that ship direct, not from retail stores.
- Shipping to the UK or EU: give carriers eBay's IOSS number when eBay collects the VAT.