Internet Sales Tax: When LiveAuctioneers Collects and Remits

Following a Supreme Court ruling, many states have introduced sales tax legislation affecting how businesses, including auction houses, sell online. As a result, internet sales tax will be collected and remitted for certain purchases made through LiveAuctioneers.

About Internet Sales Tax Laws

Over the past couple of years, states have been introducing new tax laws affecting businesses that sell online, including auction houses. Previously, most sellers were required to collect sales tax only in states where they had a physical presence. This is called physical nexus. However, as more purchases continue to be made online, states have passed legislation to expand nexus beyond a physical presence in their state to include internet sales.

On June 21, 2018, the United States Supreme Court ruled in a 5-4 decision in South Dakota v. Wayfair, Inc., et al, that states can require out-of-state sellers to collect and remit sales tax on sales that reach a certain revenue and/or transaction threshold.  Called economic nexus, this requirement has been incorporated into how most states determine taxable sales. While many states define economic nexus as $100,000 or 200 or more separate transactions, others have thresholds as high as $500,000, and these thresholds are changing regularly. Referred to as internet sales tax laws, these rules apply to anyone who sells online, regardless of the platform or website solution they’re using.

When internet sales tax is collected and remitted by LiveAuctioneers

To help auction houses comply with internet sales tax laws, we have introduced enhanced tax calculation services for purchases made through LiveAuctioneers. Auction houses will not be charged any additional processing fees for this service.

Sales tax will be calculated, collected, and remitted on all purchases paid for through LiveAuctioneers, by buyers in the following states:

State / Territory Effective Date
Additional Information
Alabama October 1, 2020
Arizona December 1, 2020
Arkansas October 1, 2020
California December 1, 2020
Colorado December 1, 2020
Connecticut December 1, 2020
District of Columbia October 1, 2020
Florida July 1, 2021 Florida Department of Revenue
Georgia November 9, 2020
Hawaii October 1, 2020
Hawaii Department of Taxation
General Excise Tax Account Number: GE-208-324-8640-01
Hawaii Marketplace Facilitator Certificate
Idaho October 1, 2020
Illinois December 1, 2020
Indiana November 9, 2020
Iowa October 1, 2020
Kansas July 1, 2021 Kansas Department of Revenue
Kentucky October 1, 2020
Louisiana December 1, 2020
Maine October 1, 2020
Maryland December 1, 2020
Massachusetts December 1, 2020
Michigan November 9, 2020
Minnesota October 1, 2020
Mississippi October 1, 2020
Nebraska October 1, 2020
Nevada October 1, 2020
New Jersey February 1, 2021
New Mexico October 1, 2020
New York December 16, 2020
North Carolina November 9, 2020
North Dakota October 1, 2020
Ohio November 9, 2020
Oklahoma October 1, 2020
Oklahoma Tax Commission
Taxpayer Identification Number: SVU-14652009-06
Oklahoma Marketplace Facilitator Certificate
Pennsylvania December 9, 2020
Rhode Island October 1, 2020
South Dakota March 1, 2021 South Dakota Department of Revenue
South Carolina December 1, 2020
Tennessee November 9, 2020
Texas January 20, 2021
Utah October 1, 2020
Vermont October 1, 2020
Virginia December 1, 2020
Washington October 1, 2020
West Virginia October 1, 2020
Wisconsin October 1, 2020
Wyoming March 1, 2021 Wyoming Department of Revenue

How is sales tax calculated?

Sales tax rate varies and depends on each state and local regulation. LiveAuctioneers will automatically calculate and apply sales tax based on the destination ZIP code listed on the bidder’s invoice.No action is required on your part to collect sales tax on purchases from the above states that are paid for through LiveAuctioneers. 

Sales tax is calculated using our advanced sales tax calculation engine. Based on the destination ZIP code, the calculator applies the correct state and local sales tax rate on the hammer price and shipping and handling fees. Processing fees and buyer’s premium may also be taxable depending on the state.

Tax-exempt item categories, where applicable, and a bidder’s tax-exemption status are also factored into sales tax calculations.  Through our tax exemption certificate management system, bidders are able to easily upload their resale certificates to their LiveAuctioneers accounts. 

How are bidders informed of potential tax responsibilities?

LiveAuctioneers will display information on invoices, during the checkout process, and in other relevant places to indicate to bidders when taxes are applicable. Purchases made in states that do not impose sales tax will not be subject to tax.

To ensure a positive bidder checkout experience, below is example phrasing to include in your auction terms and conditions:

Internet purchases from {{Auction House Name}} may be subject to sales tax. Please see the following for more details: If you are tax exempt, you can submit your tax exempt certificate to prevent the collection of tax; for more details, see here:

How much sales tax was remitted by LiveAuctioneers on my behalf?

To determine how much sales tax was remitted by LiveAuctioneers, you can download a spreadsheet of your paid invoices. The amount indicated in the Sales Tax column is the amount remitted. 

For which sales am I responsible for calculating, collecting, and remitting sales tax?

Sales tax will only be calculated, collected, or remitted for payments collected through LiveAuctioneers. In order to remain compliant with United States state and local tax regulations, you are responsible for calculating, collecting, and remitting the appropriate sales tax on all other sales. 

What does this mean when I file sales tax returns in qualifying states?

If you are required to file a sales tax return in qualifying states for your auction house, you do not need to report sales revenue collected through LiveAuctioneers. All that is required of you for those states is to report that the sales were made through LiveAuctioneers. 

You may be responsible for reporting and filing sales tax returns on sales generated outside of LiveAuctioneers.

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