Understanding Sales Tax for eBay Sellers (and How to Purchase Tax-Free)

Learn how sales tax works for eBay sellers and how to register for sales-tax-free purchasing through Amazon.

eBay Handles Sales Tax Automatically

eBay automatically collects, remits, and reports sales tax on behalf of sellers for all states where marketplace tax laws apply.

This means:

• You do not need to calculate or collect sales tax manually.
• eBay automatically adds sales tax at checkout for buyers in states that require it.
• The collected tax is remitted directly to the state by eBay, not by you.

Your Responsibility as a Seller

Even though eBay handles collection, you’re still responsible for:

• Keeping accurate business and transaction records.
• Reporting your total sales (excluding eBay-collected tax) in your bookkeeping or accounting software.
• Registering your business with your state if you sell under an LLC, S-Corp, or sole proprietorship.

How to Purchase Items Sales Tax-Free

If you’re buying products on Amazon for resale on eBay, you can register for sales tax exemption to avoid paying sales tax on inventory purchases.

1. Register Your Business

Obtain a resale certificate or sales tax exemption permit from your state tax department.

If your state participates in the Streamlined Sales Tax or Multi-State Tax Commission, you can use one form across multiple states.

2. Enroll in the Amazon Tax Exemption Program (ATEP)

1. Go to Amazon’s Tax Exemption Program
2. Log in with your business account
3. Upload your resale certificate(s)
4. Wait for Amazon approval

Once approved, all qualifying purchases made for resale will be sales-tax free at checkout.

3. Keep Documentation

Maintain a record of your certificates and exemption use in case of audit.

Never use your exemption for personal purchases.

Why It Matters

For eBay dropshippers and resellers, avoiding sales tax on sourcing purchases can add 6–10% directly to your margin depending on your state’s rate.

Combined with Infinity’s automation and the Amazon Store Card cashback, this setup allows you to:

• Purchase cheaper
• Keep your profits higher

Disclaimer

⚠️ This article is for educational purposes only and does not constitute tax or legal advice.

Consult a CPA or tax professional regarding your specific state’s requirements.

Updated on: 27/10/2025