Ruby Lane Guide to Sales Tax
On June 21, 2018, the United States Supreme Court ruled in favor of South Dakota in South Dakota v. Wayfair Inc., requiring sales tax to be collected for purchases made from out-of-state sellers, even if the seller does not have a physical presence in the taxing state. The ruling has paved the way for other states to collect sales tax, and most have started collecting.
Ruby Lane has recently been deemed a marketplace facilitator. That means we are required to collect and remit the applicable Sales Tax on behalf of our marketplace sellers.
Ruby Lane and its users are subject to sales tax laws dictated by multiple jurisdictions, which have enacted laws requiring marketplaces to report user activity or collect and remit taxes on certain items sold on the marketplace. The cost of complying with these new rules and the addition of taxes on certain items may adversely impact our business.
This collection responsibility and the additional costs associated with complex sales and use tax collection, remittance and audit requirements could create additional burdens for buyers and sellers on our websites and could further impact our business. Similar laws imposing tax collection responsibility on foreign sellers are also being considered in other countries.
US States where Ruby Lane collects and remits sales tax
The list of US States below is subject to change as states volume laws change or Ruby Lane obligations change based on sales volume.
|State||Effective Date||Additional Information|
|California||11/14/2019||Please contact the Department of Tax and Fee Administration for further information.|
|Connecticut||11/14/2019||Ruby Lane Inc. is registered with DRS to collect Connecticut sales tax and will collect sales tax on all taxable Connecticut sales facilitated on our site.|
|District of Columbia||11/14/2019|
|Hawaii||11/14/2019||Please contact the Hawaii Department of Taxation for further information.|
|Indiana||11/14/2019||Please contact the Department of Revenue for further information.|
|Maine||11/14/2019||Please contact the Maine Revenue Services for further information.|
|Maryland||11/14/2019||Please contact the Comptroller of Maryland for further information.|
|Massachusetts||11/14/2019||Please contact Massachusetts for further information.|
|Nevada||11/14/2019||Please contact the Nevada Department of Taxation for further information.|
|New Mexico||11/14/2019||Please contact the Taxation and Revenue Department for further information.|
|New York||11/14/2019||Ruby Lane Inc. is registered to collect New York State sales tax and will collect sales tax on all taxable sales of tangible personal property that it facilitates for marketplace sellers for delivery to a New York State address.|
|Ohio||11/14/2019||Please contact the Ohio Department of Taxation for further information.|
|Texas||11/14/2019||Please contact the Texas Comptroller of Public Accounts for further information.|
|Utah||11/14/2019||Please contact the State Tax Commission for further information.|
Do shop owners need to remit paperwork to any US State?
Ruby Lane is working with Avalara, a sales and use tax specialist, to remit all the appropriate paperwork and taxes to the states listed above. If you already have an existing tax obligation in the state or states you currently sell from, you no longer have to report any of these sales made through Ruby Lane after November 14th, 2019 if they are the states Ruby Lane collects and remits for you.
Note: If you sell on any other marketplace, including your own, you may be required to collect and remit taxes yourself to all states that you are required. Ruby Lane is unable to answer sales tax questions for sales conducted outside the Ruby Lane family of sites and we suggest consulting an accounting or tax professional for further assistance.
Do international sellers have to collect sales tax?
Yes, even shops located outside of the USA, but selling to buyers located in the USA, are required to pay sales tax to the buyers' respective state.
How and when is sales tax calculated?
Sales tax is based on your Purchase Order total, including shipping, handling and fees where applicable, and is calculated when the order is Finalized by you. Orders must be finalized when completed or within 21 days, whichever is sooner, except when the order is a Layaway. We do not recommend finalizing orders until your customer receives their items and you are confident the item(s) will not be returned.
Check out How to handle sales tax on shipping: A state-by-state guide, which explains tax on shipping, and how it's applied by each state.
When will Purchase Orders have Sales Tax/Service Fees Applied?
Purchase Orders placed starting 11/14/2019 will have sales tax or service fees applied when Finalized.
How does Ruby Lane collect sales tax?
For PayPal, which buyers pay the sales tax and service fees directly to you and we deduct the tax and applicable service fee from your shop account when you Finalize a Purchase Order. Where can I find the Sales Tax and Service Fees applied to my current sales?
Your Current Balance page, found at Shop Owners' Home > Accounting > Current Balance
Transactions for Your Shop
Sales Tax remitted to you from your buyer and Service Fee remitted to you from your buyer: Shown at top of screenshot below, indicate the order has been Finalized as Sold.
Pending Tax liabilities and Pending Service Fee liability: Shown at bottom of screenshot, indicate the Taxes and Fees are Pending until the Purchase Order has been Finalized.
3rd Party Payment Fee Rebate: Not shown in screenshot, helps to offset fees by 3rd party payment processors, such as PayPal or Visa, charged to you when collecting the Sales Tax and Buyer Service Fee for Ruby Lane, we are rebating you 2.9% of those charges. If your buyers paid you in a way that resulted in not using a 3rd party processor, such as by cash or check, you will still receive this rebate from us. This credit is retroactive from the date we started charging Sales Tax, November 14, 2019.
What happens if a Purchase Order is canceled?
Pending liabilities for the canceled order are removed and you refund the taxes and fees to your buyer if the order was paid. If no payment was received, nothing more is required.
How do I obtain a refund after a purchase order is Finalized?
Orders should have the payment recorded on the Order History. In cases where the payment was not PayPal, automatically recorded on the purchase order, shop owners should manually indicate payment was received, the payment method and the amount of the payment. To that end, the same order history procedure applies to full or partial refunds that are not refunded via the original PayPal payment. After the refund is recorded in the Order History, contact Ruby Lane Customer Support for a manual credit of Sales Tax and/or Service fees.
Does Ruby Lane accept Tax Exempt status from my customers?
At this time Ruby Lane does not, but we plan to have this feature available in 2020.
Why was I charged a different sales tax amount for an offer I accepted?
An offer is received with an estimated tax amount, which is subject to change based on various factors, such as:
- Final purchase price
- Shipping address
- Shipping & handling
- Sales Tax changes
Please note: This Frequently Asked Question (FAQ) is for informational purposes only. Be advised that sales tax rules and laws are subject to change at any time. For specific sales tax advice regarding your business, contact a sales tax expert.