Sales tax: an ever-present and befuddling fact of life, made all the more complicated by the variations in the amount charged between states, and even counties within those same states. Some states don’t even have sales tax! How can we unravel these mysteries? That’s what we’re aiming to do here today with this article, to help put your mind at ease about what you should be doing as a seller on TCGplayer.com.
Back in 2018, the U.S. Supreme Court made a decision on how state and local sales tax is calculated in South Dakota (South Dakota v. Wayfair), moving from a “physical presence” standard to a “marketplace” standard. Whereas previously, sales tax was the responsibility of businesses located in the state itself, it became the responsibility of remote sellers who have significant economic presence in the state to collect and remit the tax themselves. Shortly after this decision was made, most other states in the country decided to review their sales tax policies compared to the precedent set by this decision and decide whether to require businesses from out of state to collect sales tax on their transactions. Given the growth of eCommerce, this made sense to these states, since there has been a tremendous uptick in smaller local businesses making sales through marketplace websites like TCGplayer, Amazon, and eBay. States just weren’t catching the revenue generated through the activity on these sites and saw that they needed to prevent those dollars and cents from flowing out of their borders.
Since then, starting in the fall of 2019, TCGplayer partnered with Thomson Reuters Onesource, a tax accounting firm and software provider, to accurately calculate sales tax in all the states that moved from physical nexus to marketplace nexus so that TCGplayer could start collecting and remitting sales tax to the states in which our sellers make their sales. Not all states had moved to marketplace nexus at that time but since then all states who require the collection of sales tax, aside from Florida and Missouri, have implemented some type of marketplace policy. This means that for the vast majority of sellers, sales tax has become a non-issue with regards to their online orders processed through our site.
At this point we do all the calculating, collecting, and remitting for the bulk of sales on our site, with a few exceptions:
All of the above states have *zero* sales tax, which means neither we, nor the sellers physically located there need to collect tax on transactions for orders shipped to those states!
In Florida and Missouri, TCGplayer actually collects the sales tax on only Direct orders for those states, so sellers who have non-Direct orders here will likely need to contact our Customer Experience team to have a Thomson Reuters Onesource account created for them to calculate and capture sales tax made for these orders. For more information on what we need from you to create this account check out our help articles here and here. A lot of our sellers in these locations have already been set up, but if you’re a newer seller to the site and have started selling from those states since the fall of 2019 you might want to have us create an account for you.
One other exception is for Pro sellers who utilize a Pro website for In-Store Pickup Pay Now orders: if you are having customers transact through your Pro site, you will likely need to have a Thomson Reuters account created to capture the tax on those sales. On the other hand, if you have Pay Later orders enabled, the sales tax on those orders will be your responsibility to track, since you’re likely collecting the payments for those orders at the register, which wouldn’t be linked to TCGplayer.
Of course, when it comes to sales tax you are going to want to be absolutely sure that you are fully in compliance, and the absolute best person to explain that to you would be your own tax professional. The information covered above is the broad strokes, for how things work in general on a state-by-state basis. Individual sellers may have different circumstances (namely Pro sellers transacting through their Pro site, but other circumstances may exist) that dictate whether or not they need to collect sales tax. We aren’t tax professionals ourselves, so we’re not able to answer all questions on the topic, but we do know what TCGplayer’s responsibilities are. So if there’s any doubt: check with your tax professional first!
So now that we’ve covered this topic in some greater detail and have answered the main question that TCGplayer receives, namely, “Why are you collecting sales tax on my orders, I thought I was supposed to?” we’ll finish out with a few quick hits on some of the other common questions we get:
Q: Are taxes included in TCGplayer fees?
A: We do not charge commission or fees on sales tax for orders processed through Debit cards, however for credit card and PayPal orders we do include taxes when determining the total fee (to cover the added processing costs for those transactions - note that this is not a commission fee).
Q: How is sales tax that I collect (if applicable) distributed to me?
A: TCGplayer includes the sales tax collected for you in your regular seller payments, you then use the Sales Tax Report to determine what you need to pay the state when the time comes.
Q: How do I know if TCGplayer is collecting and paying taxes on my behalf?
A: Within the Sales Tax Report, the Seller Tax column shows taxes that are given to you via seller payments and you are responsible to pay. The TCGtax amount is what TCGplayer collects on your behalf and submit to the state.
Q: Why am I not seeing taxes collected on my orders?
A: Contact us here and we’ll look into this for you right away.
Q: My business is located in multiple states, and I make sales to multiple states, do I need to be set up with a tax account?
A: Contact your tax professional for help in determining what your state-by-state tax responsibilities are.
Q: I have a Thomson Reuters account because I need to collect sales tax myself, how do I use it?
A: Check out our help articles on Using Thomson Reuter's Reporting and Setting up Your Locations for Collection.
Q: I’m one of the few Canadian sellers who have been selling on TCGplayer since the early days, do I need to be set up for Tax Collection?
A: TCGplayer does not have a marketplace or physical nexus in Canada at this time, so you will need to have a Thomson Reuters account setup to capture sales tax for orders sent within your own province. You will need to track sales tax for all of your other sales. As always, contact your tax professional for the best guidance.
So now that we’ve covered all of that, hopefully you better understand how sales tax works on TCGplayer.com. As always, if you have any other TCGplayer-specific questions please send our Customer Experience team a message via our form here. We can set you up with a Thomson Reuters account if you need one, and explain the finer points/interpret how our Sales Tax Report works. If you think tax should have been collected on a given order and it wasn’t we’re also just an email away.