Sales or Use tax - which one do I need for eBay?

Hello!

I am planning to begin an eBay dropship business within Minnesota and am very new to this field. I've read the blog containing the steps that are required and I understand that I need to register for a tax id. During that process I was stuck on either choosing "Sales and Use" or "Use Only." Which of these choices should I register my eBay business down?

Cindy

Hello Cindy,

As per description:

A sales tax is a tax paid to a governing body for the sales of certain goods and services.

The use tax applies when a resident of the assessing state purchases an item that is not subject to his home state's sales tax. Usually, this is due to out-of-state purchases, as well as ordering items through the mail, by phone, or over the Internet from other states. The use tax is typically assessed at the same rate as the sales tax that would have been owed (if any) had the same goods been purchased in the state of residence.

So since you are going to sell your goods or items "out of state," you should be able to select Sales and Use.

Hope this helps.