Sports Card & Collectibles Reseller Sales Tax Guide

If you sell cards on Whatnot or eBay, the marketplace collects sales tax from your buyers, not you. Per Whatnot's help center, Whatnot acts as the marketplace facilitator in US states with facilitator laws, and eBay says it "calculates, collects, and remits sales tax on behalf of sellers" with no action required from you. So where does the risk actually live? Three places: the card-show table you set up twice a year (which creates physical presence and kills occasional-sale exemptions at booth-fee events), any sales you make outside a marketplace (your own site, Instagram DMs, PayPal invoices), and the income-tax side that almost every card seller confuses with sales tax, starting with the infamous "28% collectibles tax."

Key Takeaways

• Whatnot and eBay collect and remit sales tax on marketplace sales; you cannot opt out on eBay, and no seller action is required (eBay, per Whatnot's help center).
• The "28% collectibles tax" is federal income tax on collectors' long-term capital gains, capped at 28%. Dealers and resellers pay ordinary income tax instead. Neither one is sales tax (IRS Topic 409).
• A card-show table in Texas generally requires a sales tax permit, and the occasional-sale exemption does not apply at booth-fee events (Texas Comptroller Pub 96-211).
• Your marketplace sales still count toward the $500,000 economic nexus thresholds in Texas and California, even though the marketplace collects the tax (Texas Comptroller, CDTFA).
• The federal 1099-K threshold is back to $20,000 and more than 200 transactions, but platforms and states can report below that (IRS).

Before anything else, get the three regimes straight, because card Twitter mashes them into one scary blob:

The three tax regimes every card seller mixes up:

1. Sales tax is charged on the transaction and paid by the buyer. On Whatnot and eBay, the marketplace usually collects and remits it for you.
2. The collector's "28% collectibles tax" is federal income tax on long-term capital gains from collectibles, taxed at a maximum 28% rate (IRS Topic 409). It applies to collectors and investors, not to your flip inventory.
3. Dealer and reseller income is ordinary business income. Cards you buy to resell are inventory, not capital assets, so profits go on Schedule C at regular income tax rates (IRS Schedule D instructions).

Keep those three lanes separate and the rest of this guide gets a lot simpler.

Do Whatnot and eBay Handle Sales Tax for You?

Yes, for sales made on their platforms. Per Whatnot's help center, Whatnot acts as a marketplace facilitator in US states and territories with facilitator laws: it calculates the tax, charges the buyer, and remits the money to the state. Sellers are not required to collect or remit on Whatnot transactions, though you may still have your own registration or reporting requirements. We break down the platform's mechanics in our Whatnot sales tax guide.

eBay is even more explicit. eBay states that it "calculates, collects, and remits sales tax on behalf of sellers for items shipped to customers" across all 50 states, DC, Puerto Rico, and certain Alaska local jurisdictions. "No action is required on your part, and there are no charges or fees," and sellers cannot opt out. Our eBay sales tax guide covers the details.

Notice what neither platform handles: sales you make anywhere else. The PC card you sell through Instagram DMs, the website checkout you set up for singles, the cash deals at a show table. Those are your responsibility in any state where you have nexus. And as we'll see below, marketplace collection doesn't erase your marketplace sales from state threshold math either.

The "28% Collectibles Tax" Isn't What You Think

The 28% figure is real, but it's an income tax rate for collectors, and it probably doesn't apply to you as a reseller at all. IRS Topic 409 says: "Net capital gains from selling collectibles (such as coins or art) are taxed at a maximum 28% rate." That's federal income tax on long-term capital gains, meaning a collector or investor who held the card for more than a year before selling. It is not sales tax, it's not collected by Whatnot or eBay, and it's a maximum, not a flat surcharge.

Here's the part the hobby keeps getting wrong: if you buy cards to flip, you're not in the 28% lane at all. Under the IRS Schedule D instructions, inventory or stock in trade held mainly for sale to customers is not a capital asset. A dealer's or reseller's card sales are ordinary business income reported on Schedule C, taxed at your regular income tax rates. The 28% collectibles rate is for the collector who bought a rookie card in 2015, watched it appreciate, and sold it long-term. The same split applies to comics, coins, vintage memorabilia, and any other collectible: collectors get capital gains treatment, dealers get ordinary income.

So when someone in a break chat says "the government takes 28% of everything you sell," that gets it wrong on every count. Collectors face a maximum 28% rate on long-term gains, resellers pay ordinary income rates on profit (not gross), and sales tax is a separate system the marketplace is usually already handling.

Card Shows: The Nexus Trap Nobody Mentions

Setting up a table at a card show puts you and your inventory physically inside a state, and states treat that presence as its own trigger, separate from any online threshold. Texas is blunt about it. Under Texas Comptroller Publication 96-211, sellers at fairs, festivals, markets, and shows must hold a Texas Sales and Use Tax Permit if they sell taxable items, take orders, or even use the event to promote their selling, and that applies to in-state and out-of-state sellers alike.

The killer detail is what happens to the occasional-sale exemption. Texas allows an occasional-sale exemption for people who make only one or two taxable sales in a 12-month period, but Pub 96-211 says the exemption does not apply at "flea markets, arts and crafts shows, or other similar 'community-wide'-type events" where vendors pay booth fees or commissions. A card show with table fees fits that description. The moment you pay for a table, the "I'm just a hobbyist clearing out doubles" defense is generally gone in Texas.

California takes a different route to the same destination. The CDTFA says that "generally, if you make three or more sales of items subject to California sales and use tax in a 12-month period, you are required to register for a California seller's permit." Sell at a location for fewer than 90 days, like a weekend show, and you're a temporary seller who needs a temporary seller's permit. The permits are free, and returns for a temporary location are due by the last day of the month after that location closes.

If show selling is becoming a regular part of your operation, sort out registration before the next event. Our guide to reseller permits for online sellers walks through who needs one and how to apply.

Do Your Whatnot Auctions Count Toward State Thresholds?

In Texas and California, yes. This surprises a lot of live sellers: even though Whatnot and eBay collect the tax, the dollars still count toward the economic nexus thresholds that decide whether you personally must register.

Texas spells it out. The Texas Comptroller says that "as of April 1, 2020, you must include all sales in the safe harbor calculation, including marketplace sales, even if the marketplace provider is collecting and remitting the sales tax." Their own example: $300,000 in direct sales plus $300,000 in marketplace sales equals $600,000, which blows past the $500,000 safe harbor. That seller must get a Texas permit and collect on their direct sales. On the return, marketplace sales go in Item One (Total Texas Sales) but are excluded from Item Two (Taxable Sales) when the marketplace certifies it's collecting.

California matches. The CDTFA says that to determine whether you exceed the $500,000 threshold, "you must include all sales of tangible merchandise for delivery in this state, including sales made on your own behalf and those facilitated through a marketplace facilitator's marketplace." One mercy: if all of your California retail sales run through a registered facilitator, you don't need to register. Add a direct channel and that changes.

Don't assume every state works this way; these are the Texas and California rules specifically. But they're two of the biggest card markets in the country, and if you're streaming three nights a week, high-volume breaks add up fast. Live-selling volume across Whatnot and eBay stacks quicker than most sellers expect, so it's worth running Taxero's free nexus check to see where your combined totals actually stand.

The 1099-K You Might Get Anyway

The 1099-K is an income tax document, not a sales tax bill, and receiving one doesn't change what you owe. The IRS confirms that the One, Big, Beautiful Bill "retroactively reinstated the reporting threshold in effect prior to the passage of the American Rescue Plan Act of 2021," so payment platforms and marketplaces aren't required to file a 1099-K unless your gross payments exceed $20,000 AND you have more than 200 transactions. That's the current federal rule going forward (IRS), and eBay states the same threshold of $20,000 and more than 200 transactions for its sellers.

Two catches. First, platforms may issue a 1099-K below the federal threshold, and some states set their own lower reporting thresholds (IRS). Second, all of your income is reportable whether or not a form shows up. The 1099-K reports gross payments; it doesn't show marketplace-collected sales tax, and it doesn't decide whether your profits are taxable. They already are.

If you get a 1099-K for selling personal collection pieces at a loss, the IRS is clear that "a loss on the sale of a personal item can't be deducted from your taxes," but you can report the 1099-K amount at the top of Schedule 1 (Form 1040) to zero it out, or report the sale on Form 8949 and Schedule D (IRS). Sold a personal card for more than you paid? "If you made a profit or gain on the sale of a personal item, your profit is taxable," reported on Form 8949 and Schedule D (IRS).

When "I Just Sell My Collection Sometimes" Stops Being True

Every reseller started as a collector, and states know it, so they draw explicit lines. Texas gives you two versions of the occasional-sale exemption (Texas Comptroller Pub 94-437): make only one or two taxable sales in any 12-month period (the price doesn't matter, so one big PSA 10 sale can qualify), or sell personal-use items totaling no more than $3,000 in a calendar year. Inside those lines, no permit and no tax collection.

Three things end the exemption. First, the third sale: make a third taxable sale within 12 months and tax is due on the third and every subsequent sale (Pub 94-437). Second, intent: if you buy, barter, or trade for cards in order to resell them, you never qualified in the first place. Flipping is disqualifying by definition, no matter how low your volume is. Third, venue: selling at a flea-market or community-wide event with booth fees kills the exemption even for genuine hobbyists (Pub 96-211).

California's version is simpler but tighter: three or more sales of taxable items in a 12-month period and you're required to register for a seller's permit (CDTFA). A collector who sells one or two pieces may escape it. Anyone regularly flipping cards cannot. The honest test: if you're checking comps before you buy, you're probably a reseller, and the reseller rules above are yours.

FAQ

Do I need my own sales tax permit if I only sell on Whatnot and eBay?

For those marketplace sales themselves, the platforms collect and remit, per Whatnot's help center and eBay. In California, the CDTFA says marketplace-only sellers don't need to register as long as all retail sales go through a registered facilitator. But sell anything directly, or set up at a show, and your own permit obligations kick in.

Is the 28% collectibles tax the same as sales tax?

No. It's a federal income tax rule: long-term capital gains on collectibles are taxed at a maximum 28% rate (IRS Topic 409), and it applies to collectors and investors. Resellers report ordinary business income instead, because inventory isn't a capital asset (IRS Schedule D instructions). Sales tax is a third, entirely separate system paid by your buyers.

Can I buy cards tax-free with a resale certificate?

Often, yes, if you hold a sales tax permit and are genuinely buying to resell. The mechanics, state forms, and misuse risks are covered in our full explainer on how resale certificates work.

Does one card show table really create nexus in that state?

Selling in person puts you physically in the state, and states regulate it directly. Texas requires a permit for sellers at shows and markets whether they're in-state or out-of-state (Pub 96-211), and California requires a temporary seller's permit for short-term selling locations once you cross three sales in 12 months (CDTFA). No dollar threshold protects you at a physical table.

The Bottom Line for Card Sellers

Let the marketplaces do the job they're legally assigned: Whatnot and eBay collect sales tax on your streams and auctions. Your attention belongs on the gaps. Register before you set up a booth-fee show table in Texas or a third California sale, treat direct and DM sales as your own collection responsibility, and keep the income-tax lanes straight: max 28% on collectors' long-term gains, ordinary income for resellers, and neither one has anything to do with sales tax. And because Texas and California count your marketplace volume toward their $500,000 thresholds, live-selling volume across Whatnot and eBay adds up faster than you think. Run Taxero's free nexus check to see which states you've already crossed into before a state notices first.

This article is for general information only and is not tax, legal, or accounting advice. Rules change and your situation is specific, so consult a tax professional or the state's own guidance.