Question:
advice to this message. Just because it seems unlikely that a law will be enforced doesn’t mean that anybody should willingly, knowingly and intentionally violate that law. I suggest that anyone attempting to run a legitimate business should bring themselves into compliance with their local sales tax authority. Peter
What are you trying to do – put thousands and thousands of city, state and federal tax auditors and collectors out of work??? Shame on you – they have families and kids to feed. John
Response:
I think thats good advise, but I wouldn’t extend it to the point where I’d pay taxes I didnt owe.
It was Judge Learned Hand (love that name!) – Hide quoted text — Show quoted text -That’s a good point. Somewhere I have read that either one of our Founding Fathers or a past President made a statement something like this. "It is not Un-American to pay only the taxes that you owe and to not pay any more than is absolutely necessary". or words to that effect.. Even the crusty IRS has some exemptions along those lines. One example: The folks here locally are talking about renting out their home or a part of it for the upcoming SuperBowl. The rents are as high as $2,000 a week! Applying the logic of mnay posters in here we would assume that would be taxable income to the property owner. Not so says Pub 17 page 71 which reads in part: "If you use a dwelling unit as a home and you rent it out for fewer that 15 days during the year the you do not include in income any of the rental income." So we have just legally sheltered up to $2,000 in income from taxation. There are mnay, many other such examples. The PayPal 1099 fiasco is overblown and as a practical matter, makes little sense in the overall scheme of things.
Response:
- Hide quoted text — Show quoted text – I’d forget about trying to collect state sales tax. At this time, there are no taxes on internet sales. Yes, some states and even a few cities fool around and try to collect them buy NOBODY has ever been shown to be required to really pay such takes. That is incorrect. There is currently a federally mandated moritorium on NEW internet-specific taxes. But you are still legally obligated to collect sales tax from any buyer that resides in a state where you have a material presence, if that state has a sales tax. – Dan.
I’ll grant that. But I still think some of those taxes are on very shaky ground, especially the ones that try to collect tax on out-of-state sales. I’ve never seen a list of the states that do this. Do you know which ones they are?
Response:
– Hide quoted text — Show quoted text – Here I am SURE YOU are wrong. Even at the state level, double taxation is not allowed. If you collect tax, you are permitted to buy without paying tax. Now maybe you mean anybody in that situation IS included in the "garage sale" type exemption, but I think that applies to many Here’s something for you to try Buy a car (pay sales tax) sell the car, 10 days later tell the guy who buys it ten days later, he won’t have to pay sales tax to register it, because you just did
My point was the car seller didnt have to collect taxes. However I believe cars have their own special crazy tax rules, different from almost everything else. After all, cars must be registered, liscensed ets. Almost like selling a gun, its a special case. I was thinking more along the lines of a old camera, hi-fi, stuff like that.
Response:
First, they didn’t have to get their sales tax in "under the wire", they’ve had sales taxes on mail order sales from within the state for as long as either of us has been alive. The transaction being initiated over the internet makes no difference. States are trying to make interstates sales over the internet subject to taxation, that is what has not happened so far.
Mail order yes, they all do. Internet sales are much different and didnt exist until recently. And "under the wire" is a real good term in this case. The states knew the fed was trying to outlaw this crap and hurridly stuffed their laws thru to beat the ruling. Really underhanded to my way of thinking. Imagine every state, county and city with their own little internet tax! No wonder the fed is against it. – Hide quoted text — Show quoted text -Second, try this. Buy a brand new car, pay the registration fee (the sales tax) and then immediately sell it. See if the state will allow the car to be registred without paying the tax a second time. Won’t happen. Call your state taxing authority, and find out if private sales are not subject to tax. In most cases they are impractical to enforce, but flea market vendors get hit all the time for buying something they paid tax on, then reselling it and not collecting the tax. Garage sales come under a special exemption, as do a number of other types of sales. Selling your stuff on eBay generally won’t fit this category. I don’t know where you get your prohibition on double taxation from, it happens all the time. Third, if someone is a seller in my state with a valid tax ID number, they give me a signed resale certificate and I don’t collect any tax from them, because it isn’t owed. All I am obligated to do in that situation is to keep a copy of the resale certificate on file. Richard Ward
Yes and a vendors liscense wont get any automobile taxes forgiven either. You gotta be a car dealer for that. Cars are not a good example as they are subject to their own special taxes and are registered. Same with boats, guns, houses, land. I’m thinking alot smaller, like cameras, hi-fis computer parts and books. – Hide quoted text — Show quoted text – I hate to break it to you, but from both a legal and practical standpoint, almost everything you said was wrong. Aw c’mon. I got my name right. First, the internet isn’t tax free, never has been. The moratorium was on NEW taxes on the internet, sales tax has always applied to in-state sales, regardless of the venue used to generate them. Good point. There were a few states and even a few cities that got sales tax laws on the internet under the wire before the feds called a halt. Anybody know which ones? Maybe our poster lives in one of these states. Second, unless you fit an exemption specifically included in the sales tax laws, such as allowed for garage sales, it makes absolutely no difference whether you are selling your own personal property or not. Sales tax is still due. Here I am SURE YOU are wrong. Even at the state level, double taxation is not allowed. If you collect tax, you are permitted to buy without paying tax. Now maybe you mean anybody in that situation IS included in the "garage sale" type exemption, but I think that applies to many ebay sellers. It certainly applies to me. Just because you make more than 100 bucks doesnt mean you are booted out of this situation. A person could be selling their piano or big screen tv……it was still tax-paid and you dont have to collect again. Now if you had 20 pianos that you bought wholesale and didnt pay sales tax on, AND if you lived in a state that had snuck and internet sales tax law thru, I guess you would have to pony up, IF you sold to a person in the same state. Third, being a small time operator doesn’t make you less likely to be bothered, it makes you more likely. Most taxing agencies tend to focus heavily on small business, because they are the most likely to not report sales, and the least likely to have an accountant handle their bookkeeping. If you don’t have adequate records, they simply assume all sales are in-state and assess tax based on the total, and you have the burden (if you try and go to court) of proving that part of them were shipped out of state. I think the key words are "small business". Despite the attempt of some sellers to look very professional, they are not businesses at all. They are individuals. Also, in the case of ebay, its hard to believe anyone would not save their shipping records, proving they shipped out of state. Still, some folks do goofy things so who knows. I’ve never had someone refuse to send sales tax, I’ve had two who didn’t send it until reminded, then claimed rather sheepishly that they had made an error, and mailed it on. Since collecting sales tax is going to be the "policy" of the majority of people selling on eBay, and of all the people who are abiding by the law, I don’t think too many people are going to be surprised. Richard Ward It is also unlawful to collect tax when none is due. Collecting tax for your home state while shipping out of state would fall under that catagory. If some hothead wrote to your home state and furnished proof you did this you might still incur the wrath of the taxman. Also, what do you do if the buyer identifies himself as a seller also and gives you a vendors number. Then you MUST forgive the tax,
Response:
- Hide quoted text — Show quoted text – Here I am SURE YOU are wrong. Even at the state level, double taxation is not allowed. If you collect tax, you are permitted to buy without paying tax. Now maybe you mean anybody in that situation IS included in the "garage sale" type exemption, but I think that applies to many ebay sellers. It certainly applies to me. Just because you make more than 100 bucks doesnt mean you are booted out of this situation. A person could be selling their piano or big screen tv……it was still tax-paid and you dont have to collect again. Now if you had 20 pianos that you bought wholesale and didnt pay sales tax on, AND if you lived in a state that had snuck and internet sales tax law thru, I guess you would have to pony up, IF you sold to a person in the same state. There’s no laws against double-taxing an item – an item can be taxed everytime it’s resold. Take for instance a guy buys a widget, brand new, at Sears and of course pays sales tax on it. The guy dies in a couple years and they have a public estate auction. Another guy buys the widget at this auction and pays sales tax on it again. This guy later donates the widget to the a thrift shop. The thrift shop sells it to an ebay picker, and charges him sales tax. The ebayer puts it on ebay, it sells to somebody within the same state, and provided the ebayer is registered to collect sales tax within the state, must then send the appropriate sales tax in to the state.
True. I was thinking more along the lines of "Guy buys a widget, pays tax and HE sells it on ebay." He does not have to collect the tax. I guess sales tax is so convoluted even the most honest guy is bound to do it wrong sometimes. Too bad, just life I guess. – Hide quoted text — Show quoted text -As far as your notion about "if you collect tax, you don’t have to pay tax" – well, this can vary from state to state. For instance, in Pennsylvania, all you have to do is flash your resale number from any state and you can purchase an item without sales tax (assuming it’s purchased with the intent to resell and not for personal use). OTOH, Maryland will only permit a taxless sales for buyers who hold Maryland resale numbers and even then the minimum purchase has to be $200 – so double taxation on sales in Maryland is pretty common. And keep in mind that a lot of states may start dusting off those old "use" taxes once they figure out a way to collect them… Before you buy.
Response:
First, they didn’t have to get their sales tax in "under the wire", they’ve had sales taxes on mail order sales from within the state for as long as either of us has been alive. The transaction being initiated over the internet makes no difference. States are trying to make interstates sales over the internet subject to taxation, that is what has not happened so far. Second, try this. Buy a brand new car, pay the registration fee (the sales tax) and then immediately sell it. See if the state will allow the car to be registred without paying the tax a second time. Won’t happen. Call your state taxing authority, and find out if private sales are not subject to tax. In most cases they are impractical to enforce, but flea market vendors get hit all the time for buying something they paid tax on, then reselling it and not collecting the tax. Garage sales come under a special exemption, as do a number of other types of sales. Selling your stuff on eBay generally won’t fit this category. I don’t know where you get your prohibition on double taxation from, it happens all the time. Third, if someone is a seller in my state with a valid tax ID number, they give me a signed resale certificate and I don’t collect any tax from them, because it isn’t owed. All I am obligated to do in that situation is to keep a copy of the resale certificate on file. Richard Ward – Hide quoted text — Show quoted text – I hate to break it to you, but from both a legal and practical standpoint, almost everything you said was wrong. Aw c’mon. I got my name right. First, the internet isn’t tax free, never has been. The moratorium was on NEW taxes on the internet, sales tax has always applied to in-state sales, regardless of the venue used to generate them. Good point. There were a few states and even a few cities that got sales tax laws on the internet under the wire before the feds called a halt. Anybody know which ones? Maybe our poster lives in one of these states. Second, unless you fit an exemption specifically included in the sales tax laws, such as allowed for garage sales, it makes absolutely no difference whether you are selling your own personal property or not. Sales tax is still due. Here I am SURE YOU are wrong. Even at the state level, double taxation is not allowed. If you collect tax, you are permitted to buy without paying tax. Now maybe you mean anybody in that situation IS included in the "garage sale" type exemption, but I think that applies to many ebay sellers. It certainly applies to me. Just because you make more than 100 bucks doesnt mean you are booted out of this situation. A person could be selling their piano or big screen tv……it was still tax-paid and you dont have to collect again. Now if you had 20 pianos that you bought wholesale and didnt pay sales tax on, AND if you lived in a state that had snuck and internet sales tax law thru, I guess you would have to pony up, IF you sold to a person in the same state. Third, being a small time operator doesn’t make you less likely to be bothered, it makes you more likely. Most taxing agencies tend to focus heavily on small business, because they are the most likely to not report sales, and the least likely to have an accountant handle their bookkeeping. If you don’t have adequate records, they simply assume all sales are in-state and assess tax based on the total, and you have the burden (if you try and go to court) of proving that part of them were shipped out of state. I think the key words are "small business". Despite the attempt of some sellers to look very professional, they are not businesses at all. They are individuals. Also, in the case of ebay, its hard to believe anyone would not save their shipping records, proving they shipped out of state. Still, some folks do goofy things so who knows. I’ve never had someone refuse to send sales tax, I’ve had two who didn’t send it until reminded, then claimed rather sheepishly that they had made an error, and mailed it on. Since collecting sales tax is going to be the "policy" of the majority of people selling on eBay, and of all the people who are abiding by the law, I don’t think too many people are going to be surprised. Richard Ward It is also unlawful to collect tax when none is due. Collecting tax for your home state while shipping out of state would fall under that catagory. If some hothead wrote to your home state and furnished proof you did this you might still incur the wrath of the taxman. Also, what do you do if the buyer identifies himself as a seller also and gives you a vendors number. Then you MUST forgive the tax,
Response:
So he received my end of auction letter THREE times. And all 3 letters mentioned he would need to pay state sales tax. And my auction mentioned state sales tax, too. I received his payment today, and he did NOT include sales tax. OK, it’s only $1.23, but I’m aggravated. What would you do–go ahead and pay it out of your own pocket, or email the guy to send another $1.23?
This is a standard evasion tactic. Email the guy asking for the $1.23. AND go do the NPB Alert, using the appropriate reason. If he hasn’t sent the $1.23 by the end of the 10-day period required by the NPB Alert, refund his $, file a FVF Credit Request, and nail the jerk with negative feedback. – Dan. — – South Jersey, USA, Earth <http://www.crosswinds.net/~darmok – You cannot make History. You can only survive it.
Response:
– Hide quoted text — Show quoted text – So he received my end of auction letter THREE times. And all 3 letters mentioned he would need to pay state sales tax. And my auction mentioned state sales tax, too. I received his payment today, and he did NOT include sales tax. OK, it’s only $1.23, but I’m aggravated. What would you do–go ahead and pay it out of your own pocket, or email the guy to send another $1.23? This is a standard evasion tactic. Email the guy asking for the $1.23. AND go do the NPB Alert, using the appropriate reason. If he hasn’t sent the $1.23 by the end of the 10-day period required by the NPB Alert, refund his $, file a FVF Credit Request, and nail the jerk with negative feedback. – Dan.
Sheesh, isn’t it a little harsh to assume that they are intentionally evading the tax? When this has happened to me, I just assumed that it was an oversight. Conversely, I’ve had out-of-state people pay me sales tax that they didn’t have to – it seems to be the about the same ratio, so I generally write off both situations as people just not paying attention. Of course, I always refund the sales tax to the out-of-state folks. For the in-state folks, I just kick in the sales tax myself since the amounts have been pretty inconsequential. OTOH, if the sales tax was high enough I would ask them to pay up before shipping or possibly let the sales tax payment and the item "cross" in the mail. Before you buy.
Response:
I’d forget about trying to collect state sales tax. At this time, there are no taxes on internet sales. Yes, some states and even a few cities fool around and try to collect them buy NOBODY has ever been shown to be required to really pay such takes.
That is incorrect. There is currently a federally mandated moritorium on NEW internet-specific taxes. But you are still legally obligated to collect sales tax from any buyer that resides in a state where you have a material presence, if that state has a sales tax. – Dan. — – South Jersey, USA, Earth <http://www.crosswinds.net/~darmok – You cannot make History. You can only survive it.
Response:
Here I am SURE YOU are wrong. Even at the state level, double taxation is not allowed. If you collect tax, you are permitted to buy without paying tax. Now maybe you mean anybody in that situation IS included in the "garage sale" type exemption, but I think that applies to many
Here’s something for you to try Buy a car (pay sales tax) sell the car, 10 days later tell the guy who buys it ten days later, he won’t have to pay sales tax to register it, because you just did
Response:
I hate to break it to you, but from both a legal and practical standpoint, almost everything you said was wrong.
Aw c’mon. I got my name right. First, the internet isn’t tax free, never has been. The moratorium was on NEW taxes on the internet, sales tax has always applied to in-state sales, regardless of the venue used to generate them.
Good point. There were a few states and even a few cities that got sales tax laws on the internet under the wire before the feds called a halt. Anybody know which ones? Maybe our poster lives in one of these states. Second, unless you fit an exemption specifically included in the sales tax laws, such as allowed for garage sales, it makes absolutely no difference whether you are selling your own personal property or not. Sales tax is still due.
Here I am SURE YOU are wrong. Even at the state level, double taxation is not allowed. If you collect tax, you are permitted to buy without paying tax. Now maybe you mean anybody in that situation IS included in the "garage sale" type exemption, but I think that applies to many ebay sellers. It certainly applies to me. Just because you make more than 100 bucks doesnt mean you are booted out of this situation. A person could be selling their piano or big screen tv……it was still tax-paid and you dont have to collect again. Now if you had 20 pianos that you bought wholesale and didnt pay sales tax on, AND if you lived in a state that had snuck and internet sales tax law thru, I guess you would have to pony up, IF you sold to a person in the same state. Third, being a small time operator doesn’t make you less likely to be bothered, it makes you more likely. Most taxing agencies tend to focus heavily on small business, because they are the most likely to not report sales, and the least likely to have an accountant handle their bookkeeping. If you don’t have adequate records, they simply assume all sales are in-state and assess tax based on the total, and you have the burden (if you try and go to court) of proving that part of them were shipped out of state.
I think the key words are "small business". Despite the attempt of some sellers to look very professional, they are not businesses at all. They are individuals. Also, in the case of ebay, its hard to believe anyone would not save their shipping records, proving they shipped out of state. Still, some folks do goofy things so who knows. I’ve never had someone refuse to send sales tax, I’ve had two who didn’t send it until reminded, then claimed rather sheepishly that they had made an error, and mailed it on. Since collecting sales tax is going to be the "policy" of the majority of people selling on eBay, and of all the people who are abiding by the law, I don’t think too many people are going to be surprised. Richard Ward
It is also unlawful to collect tax when none is due. Collecting tax for your home state while shipping out of state would fall under that catagory. If some hothead wrote to your home state and furnished proof you did this you might still incur the wrath of the taxman. Also, what do you do if the buyer identifies himself as a seller also and gives you a vendors number. Then you MUST forgive the tax,
Response:
Here I am SURE YOU are wrong. Even at the state level, double taxation is not allowed. If you collect tax, you are permitted to buy without paying tax. Now maybe you mean anybody in that situation IS included in the "garage sale" type exemption, but I think that applies to many ebay sellers. It certainly applies to me. Just because you make more than 100 bucks doesnt mean you are booted out of this situation. A person could be selling their piano or big screen tv……it was still tax-paid and you dont have to collect again. Now if you had 20 pianos that you bought wholesale and didnt pay sales tax on, AND if you lived in a state that had snuck and internet sales tax law thru, I guess you would have to pony up, IF you sold to a person in the same state.
There’s no laws against double-taxing an item – an item can be taxed everytime it’s resold. Take for instance a guy buys a widget, brand new, at Sears and of course pays sales tax on it. The guy dies in a couple years and they have a public estate auction. Another guy buys the widget at this auction and pays sales tax on it again. This guy later donates the widget to the a thrift shop. The thrift shop sells it to an ebay picker, and charges him sales tax. The ebayer puts it on ebay, it sells to somebody within the same state, and provided the ebayer is registered to collect sales tax within the state, must then send the appropriate sales tax in to the state. As far as your notion about "if you collect tax, you don’t have to pay tax" – well, this can vary from state to state. For instance, in Pennsylvania, all you have to do is flash your resale number from any state and you can purchase an item without sales tax (assuming it’s purchased with the intent to resell and not for personal use). OTOH, Maryland will only permit a taxless sales for buyers who hold Maryland resale numbers and even then the minimum purchase has to be $200 – so double taxation on sales in Maryland is pretty common. And keep in mind that a lot of states may start dusting off those old "use" taxes once they figure out a way to collect them… Before you buy.
Response:
I have a high bidder who didn’t respond until I sent him two end-of-auction letters over a period of a week. He finally responded with a "will get a check in the mail." OK, no biggie. A week later, I get a "Where should I mail payment?" query. OK, I already sent the email twice but I forwarded it again. So he received my end of auction letter THREE times. And all 3 letters mentioned he would need to pay state sales tax. And my auction mentioned state sales tax, too. I received his payment today, and he did NOT include sales tax. OK, it’s only $1.23, but I’m aggravated. What would you do–go ahead and pay it out of your own pocket, or email the guy to send another $1.23?
Response:
I have a high bidder who didn’t respond until I sent him two end-of-auction letters over a period of a week. He finally responded with a "will get a check in the mail." OK, no biggie. A week later, I get a "Where should I mail payment?" query. OK, I already sent the email twice but I forwarded it again. So he received my end of auction letter THREE times. And all 3 letters mentioned he would need to pay state sales tax. And my auction mentioned state sales tax, too. I received his payment today, and he did NOT include sales tax. OK, it’s only $1.23, but I’m aggravated. What would you do–go ahead and pay it out of your own pocket, or email the guy to send another $1.23?
I’d forget about trying to collect state sales tax. At this time, there are no taxes on internet sales. Yes, some states and even a few cities fool around and try to collect them buy NOBODY has ever been shown to be required to really pay such takes. Unless you are a big corporation (and your posting seems to suggest you are not) you can argue that the material is your personal property and not taxable at all, even if the the sale were made in person. Most ebay sellers do NOT charge sales tax. Its possible your buyer is totally suprised by your policy or is not taking you seriously. If you intend to do this, be prepaired for many buyers to refuse.
Response:
Email him back and tell him that he obviously forgot to include his state sales tax license number, and that without that, you’ll need to have the entire amount of sales tax paid before you can ship. You see, it’s really quite illegal to NOT collect it. At least in my state. Kris
(snip) – Hide quoted text — Show quoted text -So he received my end of auction letter THREE times. And all 3 letters mentioned he would need to pay state sales tax. And my auction mentioned state sales tax, too. I received his payment today, and he did NOT include sales tax. OK, it’s only $1.23, but I’m aggravated. What would you do–go ahead and pay it out of your own pocket, or email the guy to send another $1.23?
Response:
I’d forget about trying to collect state sales tax. At this time, there are no taxes on internet sales. Yes, some states and even a few cities fool around and try to collect them buy NOBODY has ever been shown to be required to really pay such takes. I’d like to post a contradictory advice to this message. Just because it seems unlikely that a law will be enforced doesn’t mean that anybody should willingly, knowingly and intentionally violate that law.
Besides ethics, when I went into biz (and even though Ebay is a small part of it, being a sole proprietor, everything is one), my accountant’s initial advice was that you can get away with quite a lot with the Feds if you’re a little fish, but never NEVER cheat the state, who’ll come down hard on you for next to nothing…I always charge sales tax for Ebay stuff if shipped or hand delivered to someone here in TN) – Mac (doogle)
Response:
I have already had the experience of the state coming down hard on me re: sales tax. I sold some crafts in TWO little crafts shows. During the second show, a "revnooer" came by and read me the riot act!! Man, I thought she was going to arrest me! She actually yelled at me and threatened me with a fine. It was TOTALLY embarrassing. So, I go ahead and pay the state sales tax, even though very few of my buyers are in-state (last quarter I think I paid $1.80 to the state). – Hide quoted text — Show quoted text – I’d forget about trying to collect state sales tax. At this time, there are no taxes on internet sales. Yes, some states and even a few cities fool around and try to collect them buy NOBODY has ever been shown to be required to really pay such takes. I’d like to post a contradictory advice to this message. Just because it seems unlikely that a law will be enforced doesn’t mean that anybody should willingly, knowingly and intentionally violate that law. Besides ethics, when I went into biz (and even though Ebay is a small part of it, being a sole proprietor, everything is one), my accountant’s initial advice was that you can get away with quite a lot with the Feds if you’re a little fish, but never NEVER cheat the state, who’ll come down hard on you for next to nothing…I always charge sales tax for Ebay stuff if shipped or hand delivered to someone here in TN) – Mac (doogle)
Response:
I’d forget about trying to collect state sales tax. At this time, there are no taxes on internet sales. Yes, some states and even a few cities fool around and try to collect them buy NOBODY has ever been shown to be required to really pay such takes.
I’d like to post a contradictory advice to this message. Just because it seems unlikely that a law will be enforced doesn’t mean that anybody should willingly, knowingly and intentionally violate that law. I suggest that anyone attempting to run a legitimate business should bring themselves into compliance with their local sales tax authority. Peter
Response:
I hate to break it to you, but from both a legal and practical standpoint, almost everything you said was wrong. First, the internet isn’t tax free, never has been. The moratorium was on NEW taxes on the internet, sales tax has always applied to in-state sales, regardless of the venue used to generate them. Second, unless you fit an exemption specifically included in the sales tax laws, such as allowed for garage sales, it makes absolutely no difference whether you are selling your own personal property or not. Sales tax is still due. Third, being a small time operator doesn’t make you less likely to be bothered, it makes you more likely. Most taxing agencies tend to focus heavily on small business, because they are the most likely to not report sales, and the least likely to have an accountant handle their bookkeeping. If you don’t have adequate records, they simply assume all sales are in-state and assess tax based on the total, and you have the burden (if you try and go to court) of proving that part of them were shipped out of state. I’ve never had someone refuse to send sales tax, I’ve had two who didn’t send it until reminded, then claimed rather sheepishly that they had made an error, and mailed it on. Since collecting sales tax is going to be the "policy" of the majority of people selling on eBay, and of all the people who are abiding by the law, I don’t think too many people are going to be surprised. Richard Ward – Hide quoted text — Show quoted text – I have a high bidder who didn’t respond until I sent him two end-of-auction letters over a period of a week. He finally responded with a "will get a check in the mail." OK, no biggie. A week later, I get a "Where should I mail payment?" query. OK, I already sent the email twice but I forwarded it again. So he received my end of auction letter THREE times. And all 3 letters mentioned he would need to pay state sales tax. And my auction mentioned state sales tax, too. I received his payment today, and he did NOT include sales tax. OK, it’s only $1.23, but I’m aggravated. What would you do–go ahead and pay it out of your own pocket, or email the guy to send another $1.23? I’d forget about trying to collect state sales tax. At this time, there are no taxes on internet sales. Yes, some states and even a few cities fool around and try to collect them buy NOBODY has ever been shown to be required to really pay such takes. Unless you are a big corporation (and your posting seems to suggest you are not) you can argue that the material is your personal property and not taxable at all, even if the the sale were made in person. Most ebay sellers do NOT charge sales tax. Its possible your buyer is totally suprised by your policy or is not taking you seriously. If you intend to do this, be prepaired for many buyers to refuse.
Response:
I have already had the experience of the state coming down hard on me re: sales tax. I sold some crafts in TWO little crafts shows. During the second show, a "revnooer" came by and read me the riot act!! Man, I thought she was going to arrest me! She actually yelled at me and threatened me with a fine. It was TOTALLY embarrassing.
LOL, what’s fun is when you have the revenueers, customs, and law enforcement raid the fleamarket all at the same time. This happened at the White Elephant about 2 years ago. Plain clothes people walking the tables and then all of a sudden hell breaks lose. I had all my papers in line so it wasn’t no big deal for me. The lady across from me got everything ceased and got several tickets. She had counterfiet items and no sells permit for things that are illegal to sell without the proper permits. Good thing noone screamed INS in the middle of the reckus.<g Alot of people had their stuff ceased that day. Kimberly – Hide quoted text — Show quoted text – So, I go ahead and pay the state sales tax, even though very few of my buyers are in-state (last quarter I think I paid $1.80 to the state). I’d forget about trying to collect state sales tax. At this time, there are no taxes on internet sales. Yes, some states and even a few cities fool around and try to collect them buy NOBODY has ever been shown to be required to really pay such takes. I’d like to post a contradictory advice to this message. Just because it seems unlikely that a law will be enforced doesn’t mean that anybody should willingly, knowingly and intentionally violate that law. Besides ethics, when I went into biz (and even though Ebay is a small part of it, being a sole proprietor, everything is one), my accountant’s initial advice was that you can get away with quite a lot with the Feds if you’re a little fish, but never NEVER cheat the state, who’ll come down hard on you for next to nothing…I always charge sales tax for Ebay stuff if shipped or hand delivered to someone here in TN) – Mac (doogle)
Response:
– Hide quoted text — Show quoted text – I’d forget about trying to collect state sales tax. At this time, there are no taxes on internet sales. Yes, some states and even a few cities fool around and try to collect them buy NOBODY has ever been shown to be required to really pay such takes. I’d like to post a contradictory advice to this message. Just because it seems unlikely that a law will be enforced doesn’t mean that anybody should willingly, knowingly and intentionally violate that law. I suggest that anyone attempting to run a legitimate business should bring themselves into compliance with their local sales tax authority. Peter
Bad wording on my part. I meant that there IS no law, saying individuals must pay a tax on internet sales. Certainly states are trying to change that but every "law" I’ve seen is actually what the taxing agency feels the law should be, not actual tax law. Now in the case of corporations, there is the feeling that if they are physically located in the state where the sale took place they better collect the tax. I think even this is questionable. But since an individual cant be located in more than one place there is only one state they could POSSIBLY need to collect tax. In order to do this they would have to be a registered vendor with a tax id number. Even then, its questionable if an internet sale is taxable. And finally, many individuals are auctioning their personal property on which tax was paid, perhaps long ago. That is never taxable when resold. I concur that this guy MIGHT POSSIBLY fall into that odd situation (has a vendors lic., selling stuff bought only to auction, sellng to sombody in his own state) in which case, ok, he could perhaps collect tax. But in practical terms, dunning someone for a 1.23 tax payment seems rather extreme. Unless he has been audited and is truly paranoid, it sounds more like he is "playing store" and is determined to have his buyer fall in line. Once ya send more than an email or two, the time alone is worth a buck and if he is determined to be "by the book", he might be better off kicking in the 1.23 himself and getting on with his life.
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– Hide quoted text — Show quoted text – I’d forget about trying to collect state sales tax. At this time, there are no taxes on internet sales. Yes, some states and even a few cities fool around and try to collect them buy NOBODY has ever been shown to be required to really pay such takes. I’d like to post a contradictory advice to this message. Just because it seems unlikely that a law will be enforced doesn’t mean that anybody should willingly, knowingly and intentionally violate that law. Besides ethics, when I went into biz (and even though Ebay is a small part of it, being a sole proprietor, everything is one), my accountant’s initial advice was that you can get away with quite a lot with the Feds if you’re a little fish, but never NEVER cheat the state, who’ll come down hard on you for next to nothing…I always charge sales tax for Ebay stuff if shipped or hand delivered to someone here in TN) – Mac (doogle)
I think thats good advise, but I wouldn’t extend it to the point where I’d pay taxes I didnt owe. I’m reading something into the original post. I’m assuming the poster is, like me, a "small fish" who is auctioning off stuff that could easily be his personal property. Maybe thats not the case. Certainly if he bought a truckload of stuff (and didnt pay tax on it ’cause he has a vendors lic.) he should try to collect state tax. But even that is a real consesson to the state (does anybody know which one hes in?) Supposedly the feds have ruled that ya cant tax internet sales and the states want to overturn this, short of restarting the civil war. So here is a question to the poster: Did you pay sales tax when you bought the item in question?
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– Hide quoted text — Show quoted text – I have already had the experience of the state coming down hard on me re: sales tax. I sold some crafts in TWO little crafts shows. During the second show, a "revnooer" came by and read me the riot act!! Man, I thought she was going to arrest me! She actually yelled at me and threatened me with a fine. It was TOTALLY embarrassing. LOL, what’s fun is when you have the revenueers, customs, and law enforcement raid the fleamarket all at the same time. This happened at the White Elephant about 2 years ago. Plain clothes people walking the tables and then all of a sudden hell breaks lose. I had all my papers in line so it wasn’t no big deal for me. The lady across from me got everything ceased and got several tickets. She had counterfiet items and no sells permit for things that are illegal to sell without the proper permits. Good thing noone screamed INS in the middle of the reckus.<g Alot of people had their stuff ceased that day. Kimberly
Wish you had a video camera that day! What a tape that would make. I recently bought a load of stuff at a truly big white elephant sale, put on by so high-roller types for the benefit of their "Garden Club". Musta been 200 tables, maybe 2000 people there at the peak. Lasted two days. Some of the "cashiers" collected tax, some didnt. Some got the amt. wrong. Wonder what would have happened if I’d waved my vendors lic and asked for exempt sale? But since I paid tax on most of the stuff I feel free to auction it off and not collect tax. C’mon, the law works both ways doesnt it? – Hide quoted text — Show quoted text – So, I go ahead and pay the state sales tax, even though very few of my buyers are in-state (last quarter I think I paid $1.80 to the state). I’d forget about trying to collect state sales tax. At this time, there are no taxes on internet sales. Yes, some states and even a few cities fool around and try to collect them buy NOBODY has ever been shown to be required to really pay such takes. I’d like to post a contradictory advice to this message. Just because it seems unlikely that a law will be enforced doesn’t mean that anybody should willingly, knowingly and intentionally violate that law. Besides ethics, when I went into biz (and even though Ebay is a small part of it, being a sole proprietor, everything is one), my accountant’s initial advice was that you can get away with quite a lot with the Feds if you’re a little fish, but never NEVER cheat the state, who’ll come down hard on you for next to nothing…I always charge sales tax for Ebay stuff if shipped or hand delivered to someone here in TN) – Mac (doogle)
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I have already had the experience of the state coming down hard on me re: sales tax. I sold some crafts in TWO little crafts shows. During the second show, a "revnooer" came by and read me the riot act!! Man, I thought she was going to arrest me! She actually yelled at me and threatened me with a fine. It was TOTALLY embarrassing. So, I go ahead and pay the state sales tax, even though very few of my buyers are in-state (last quarter I think I paid $1.80 to the state).
Pretty poor behavior on the part of a public servant! But in all fairness, that was a physical sale. You were actually there with the product in yer hands, selling to another person who was likewise physically there. The internet is supposed to be tax free-courtesy of the federal govt. Of course, if ya only owe 1.80, its good insurance. But it also tips the state that you exist. – Hide quoted text — Show quoted text – I’d forget about trying to collect state sales tax. At this time, there are no taxes on internet sales. Yes, some states and even a few cities fool around and try to collect them buy NOBODY has ever been shown to be required to really pay such takes. I’d like to post a contradictory advice to this message. Just because it seems unlikely that a law will be enforced doesn’t mean that anybody should willingly, knowingly and intentionally violate that law. Besides ethics, when I went into biz (and even though Ebay is a small part of it, being a sole proprietor, everything is one), my accountant’s initial advice was that you can get away with quite a lot with the Feds if you’re a little fish, but never NEVER cheat the state, who’ll come down hard on you for next to nothing…I always charge sales tax for Ebay stuff if shipped or hand delivered to someone here in TN) – Mac (doogle)
Response:
Also, Deborah, there’s this: I charge sales tax for instate stuff also, but how could I know the rates for all the other parts of the state? The state part is 7% but each county and each municipality can add on up to 2.5% more. Varies from about 7.75 to 9.5% all over the state.
That’s what I’m figuring is the real reason for this approach, and that way it makes sense to me. The other way it doesn’t–pay if you’re in the jurisdiction for part of the tax, but the other part it doesn’t matter if you’re in the jurisdiction or not. Feh. Deborah Stevenson
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- Hide quoted text — Show quoted text – Okeydokey. I’m looking at an item where the seller has stated that sales tax must be added to the total if the buyer is from the same state. Cool, legal, fine, I understand. Except the rate he includes isn’t our state’s sales tax rate; it’s considerably higher. I don’t think it’s wrong per se; I just think it’s the total sales tax in his area, which includes hefty county/municipal surtaxes. While I live in the state, I don’t live in the area covered by the surtaxes. My presumption is that I’m therefore responsible only for paying the state sales tax, but I might very well be wrong on that, so I thought I’d run it by you business folks. And if I’m right, is there an up-to-date authoritative website for state tax rates that I can cite to him? I don’t want it to look like I’m just making it up, and the only site I found was a couple of years old–correct, but old enough that he might wish to question it.
Deborah, The rules vary by state. In California, for example, the seller is supposed to collect sales tax for the "ship to" address. Apparently in Washington, where I am now, the sales tax is based on the seller’s address. That’s a lot simpler for the seller; CA rules, and the resulting sales tax reporting form, are a pain! You’ll have to find the rules for your state on your state’s web site. Guy
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– Hide quoted text — Show quoted text – [re state sales tax vs. state plus local taxes) Deborah, I can’t find anything definitive but I’ve had some experi- ence in this area. In Utah, it’s based on the physical location of the seller, not the buyer. I have friends who own a shop in Park City; occasionally, I’ve had them send me things via mail order when I didn’t want to make the drive. I had to pay Park City’s higher (resorts, arts, and whatever else) sales tax rate. That’s what they have to charge their customers. A Google search on the topic kicked up an in-city merchant who has the high version of the tax for in-state buyers, too. When we sold at antique shows throughout Utah, we had to collect and remit sales tax based on the rates in effect in the city/county we were selling in, not on our own city/county rates. See, and that makes sense to me–when you’re selling face to face, the rate is the rate of the location. But mail order is traditionally based on the buyer’s location when it comes to *state* sales tax–if you’re out of the area for that tax, you don’t pay it. It’s very bizarre that local sales tax has a different rule, but not so different that it applies to people out of state. So apparently he’s right, which is at least good, as it will simplify the payment process. Thanks for the response. Deborah Stevenson
Also, Deborah, there’s this: I charge sales tax for instate stuff also, but how could I know the rates for all the other parts of the state? The state part is 7% but each county and each municipality can add on up to 2.5% more. Varies from about 7.75 to 9.5% all over the state. — Mac McDougald Doogle Digital – www.doogle.com
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Okeydokey. I’m looking at an item where the seller has stated that sales tax must be added to the total if the buyer is from the same state. Cool, legal, fine, I understand. Except the rate he includes isn’t our state’s sales tax rate; it’s considerably higher. I don’t think it’s wrong per se; I just think it’s the total sales tax in his area, which includes hefty county/municipal surtaxes. While I live in the state, I don’t live in the area covered by the surtaxes. My presumption is that I’m therefore responsible only for paying the state sales tax, but I might very well be wrong on that, so I thought I’d run it by you business folks. And if I’m right, is there an up-to-date authoritative website for state tax rates that I can cite to him? I don’t want it to look like I’m just making it up, and the only site I found was a couple of years old–correct, but old enough that he might wish to question it. Deborah Stevenson
Response:
– Hide quoted text — Show quoted text -Okeydokey. I’m looking at an item where the seller has stated that sales tax must be added to the total if the buyer is from the same state. Cool, legal, fine, I understand. Except the rate he includes isn’t our state’s sales tax rate; it’s considerably higher. I don’t think it’s wrong per se; I just think it’s the total sales tax in his area, which includes hefty county/municipal surtaxes. While I live in the state, I don’t live in the area covered by the surtaxes. My presumption is that I’m therefore responsible only for paying the state sales tax, but I might very well be wrong on that, so I thought I’d run it by you business folks. And if I’m right, is there an up-to-date authoritative website for state tax rates that I can cite to him? I don’t want it to look like I’m just making it up, and the only site I found was a couple of years old–correct, but old enough that he might wish to question it. Deborah Stevenson
Deborah, I can’t find anything definitive but I’ve had some experi- ence in this area. In Utah, it’s based on the physical location of the seller, not the buyer. I have friends who own a shop in Park City; occasionally, I’ve had them send me things via mail order when I didn’t want to make the drive. I had to pay Park City’s higher (resorts, arts, and whatever else) sales tax rate. That’s what they have to charge their customers. When we sold at antique shows throughout Utah, we had to collect and remit sales tax based on the rates in effect in the city/county we were selling in, not on our own city/county rates. Kris
Response:
[re state sales tax vs. state plus local taxes) Deborah, I can’t find anything definitive but I’ve had some experi- ence in this area. In Utah, it’s based on the physical location of the seller, not the buyer. I have friends who own a shop in Park City; occasionally, I’ve had them send me things via mail order when I didn’t want to make the drive. I had to pay Park City’s higher (resorts, arts, and whatever else) sales tax rate. That’s what they have to charge their customers.
A Google search on the topic kicked up an in-city merchant who has the high version of the tax for in-state buyers, too. When we sold at antique shows throughout Utah, we had to collect and remit sales tax based on the rates in effect in the city/county we were selling in, not on our own city/county rates.
See, and that makes sense to me–when you’re selling face to face, the rate is the rate of the location. But mail order is traditionally based on the buyer’s location when it comes to *state* sales tax–if you’re out of the area for that tax, you don’t pay it. It’s very bizarre that local sales tax has a different rule, but not so different that it applies to people out of state. So apparently he’s right, which is at least good, as it will simplify the payment process. Thanks for the response. Deborah Stevenson
Response:
– Hide quoted text — Show quoted text – [re state sales tax vs. state plus local taxes) Deborah, I can’t find anything definitive but I’ve had some experi- ence in this area. In Utah, it’s based on the physical location of the seller, not the buyer. I have friends who own a shop in Park City; occasionally, I’ve had them send me things via mail order when I didn’t want to make the drive. I had to pay Park City’s higher (resorts, arts, and whatever else) sales tax rate. That’s what they have to charge their customers. A Google search on the topic kicked up an in-city merchant who has the high version of the tax for in-state buyers, too. When we sold at antique shows throughout Utah, we had to collect and remit sales tax based on the rates in effect in the city/county we were selling in, not on our own city/county rates. See, and that makes sense to me–when you’re selling face to face, the rate is the rate of the location. But mail order is traditionally based on the buyer’s location when it comes to *state* sales tax–if you’re out of the area for that tax, you don’t pay it. It’s very bizarre that local sales tax has a different rule, but not so different that it applies to people out of state. So apparently he’s right, which is at least good, as it will simplify the payment process. Thanks for the response. Deborah Stevenson
It applies because that’s where he’s doing business…..and you’re in the same state. If you’d just move over the state line, problem solved. The reason mail order sales tax is based on the buyer’s location is because you only pay when the seller/retailer has a retail location in your state. Therefore, it’s computed at that state level – and if they were located in one of those high-surtax areas, you’d have to pay that, also. Kris – Hide quoted text — Show quoted text –
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