NGC - ebay collecting tax now?

[brider]

I suppose most people know this by now, but as recently as 2/2/2020 I made purchases on ebay (2 of them) and did not pay sales tax, but TODAY I got hit with CT state tax listed in my Checkout fees.

It was inevitable, but this might REALLY push me toward opening a Facebook account to access the Marketplace. Something just doesn't seem right about taxing the sale of an object EVERY TIME IT CHANGES OWNERSHIP, instead of just when it is purchased new. Oh well, I guess we tolerate it for motor vehicles, but it still seems wrong when applied to immoveable, inanimate objects.

This might be a touchy subject, so I'll understand if a moderator deletes this post.

[Tom H]

I can understand Ebay taxing a NEW item. But to me a USED item should not be taxed. It had it's tax paid when it was first bought.

Tom

[bigbikerrick]

My Thoughts exactly! They get you coming,and going!
Rick.

[Lannis]

I suppose most people know this by now, but as recently as 2/2/2020 I made purchases on ebay (2 of them) and did not pay sales tax, but TODAY I got hit with CT state tax listed in my Checkout fees.

It was inevitable, but this might REALLY push me toward opening a Facebook account to access the Marketplace. Something just doesn't seem right about taxing the sale of an object EVERY TIME IT CHANGES OWNERSHIP, instead of just when it is purchased new. Oh well, I guess we tolerate it for motor vehicles, but it still seems wrong when applied to immoveable, inanimate objects.

This might be a touchy subject, so I'll understand if a moderator deletes this post.

Sort of a general topic, this collecting of sales tax when something is sold.   It's not just eBay.

I don't know of any state that taxes only "new" sales.   If you buy an antique lamp, or a used car, or a used lawnmower from any dealer ... you pay sales tax on it.   It's on "sales", not just new stuff.

Lannis

[oldbike54]

 As Lannis stated , it is a tax on the sale . At least in Oklahoma we pay tax on items purchased in a pawn shop or resale shop , when we but a used vehicle , or any business selling used stuff . Ebay has just become one of the businesses selling used merchandise . Simple .

 Dusty

[trippah]

and In New York State, you pay a sales tax based on presumed internet purchases based on you income, not your actual buying of goods., it is a added line in the income tax.

[LongRanger]

I find this interesting because eBay isn't the Seller. They merely provide a marketing channel and facilitate payment on behalf of the Buyer and Seller. They don't hold title to the goods. It is what it is, but I'm unclear why they'd be required to collect sales tax on the value of the purchase.

[Lannis]

I don't think the "don't own it, just facilitating the sale" thing matters either.

Often a dealer doesn't own the car they're selling; the manufacturer does, according to some floor plan, but who else is going to collect the sale price and the tax but the dealer?    There are consignment shops everywhere that "sell" items, which means collect the money and package and deliver the item to the customer, on behalf of the owner, but they never "owned" it.   If they didn't collect the sales tax, who would?

I think this is something that we've been living with for 45 years, but never really thought about it until the eBay question was brought up.

Now excuse me while I update my list of everything I've bought on line in 2019 so that I can declare it on my Virginia 740 tax form and pay 5.5% sales tax on it all .... boy, what a job keeping all these records ....   

Lannis

[wymple]

I'm in Iowa, they collect on us.

[brider]

It's even worse than I thought-

CT charges sales tax on shipping and handling. I thought ebay made a mistake in calculating until I looked up the state law.

But this must be a VERY recent thing with ebay, like I said, I ordered like 2 weeks ago and was not charged.

[Noguzznoglory]

the tax is on the "sale" not on the item. technically, in most states it is a "sales and use" tax. if you buy a product and ship it in form out of state the law requires that you remit the use tax after you receive it.
of course no one does this, just businesses. most state lawss mirror the florida law cited in the link below.

https://floridarevenue.com/taxes/taxesfees/Pages/sales_tax.aspx

[Loop Tonti EV]

I need to start keeping records of what I paid for items. Then later in life, if I sell them on Ebay for less, I'll know how much of a loss I can claim.

[bigbikerrick]

Its all about everybody wanting their piece of the "pie"! It was only a matter of time....
Rick.

[AJ Huff]

Goes back to 2018, you're just now seeing it implemented. It's been a slow gradual rollout. It's not eBay that wants your money, it's the state. See South Dakota v Wayfair. That's where is came from.

-AJ

[redrider90]

It's even worse than I thought-

CT charges sales tax on shipping and handling. I thought ebay made a mistake in calculating until I looked up the state law.

But this must be a VERY recent thing with ebay, like I said, I ordered like 2 weeks ago and was not charged.

NC charges for taxes on shipping. For years I used to charge for shipping custom foot orthotics, which is a non taxed medical item, until I found out they charged taxes on shipping. I'd have up to $600 a year in shipping fees that I would need to charge taxes . Sometimes I would be sending it 24 hour air for athletes which might cost up to $50 for a Sat delivery.  So I quit charging for shipping and just added it to the bill which was not taxed.
I really do not mind paying my fare share of sales taxes when I buy out of state. After all the state has to function and provide us the services and when they loose that sales tax it hurts.

[n3303j]

....and PayPal (certainly not my Pal anymore) mailed the IRS (and me) a 1099 on all my ebay sales. Accountant had to add a "self employed" form to reflect this revenue.

I'm only selling off my personal property to clear up the pile before I die. So far everything has gone for less than I paid. But I certainly don't have documentation on a 20 year old wrench!

[malik]

A brief historical perspective may be enlightening, as well a showing where we are headed.

Back in the old days (within living memory of some of us), federal/national governments would fund their activities by direct taxation of (amongst other things) incomes, and states fund theirs by indirect taxation, principally sales tax - manufactured items were levied taxes on the first retail sale. Then manufacturing disappeared in the the first world, and there was no longer a tax base. Hence the switch to taxes on "consumption - in the UK & Europe called a VAT (value added tax) and here in Oz, a GST (goods & services fax). Here the federal government took it over, and every year there's a big fight as the 6 states & 1 territory duke it out for their slice of the pie. Governments being governments, there is a constant need for more tax revenues, so they are getting increasingly sophisticated in identifying the leaks of possible revenues, and doing something about it. They have used their big sticks to "encourage" the organised market places such as Amazon, eBay, PayPal, to act as tax collectors on their behalf. Once they have the big operators tamed, they move in on the smaller ones, until anyone who sells/exchanges anything is caught and pays over their tax (politicians are especially strident on the "fair share of tax" arguments). Note that these are now taxes on consumption of goods and services - freight & postage, along with everything else, are caught. It can only get worse. Legislation & regulation will continue to increase exponentially, forever, or until total economic collapse, whichever comes first.

[LowRyter]

As Lannis stated , it is a tax on the sale . At least in Oklahoma we pay tax on items purchased in a pawn shop or resale shop , when we but a used vehicle , or any business selling used stuff . Ebay has just become one of the businesses selling used merchandise . Simple .

 Dusty

Hell, we pay taxes on groceries.  OTOH, newspapers are exempt and we have lowest oil royalty tax of anyplace.  No graduated income state income tax scale either, one rate for all.   And car tags, wow.

Frack away!

[PeteS]

Ebay has been collecting New York sales tax since last June. New, used, out of country, it doesn't matter. Then they try to collect a second time when you file your state income tax. No surprise residents are leaving in record numbers.

Pete

[bratman2]

I don't know if it is so much Ebay as it is the seller maybe? I just bought a pair of new NB shoes, charged sales tax. About three weeks ago bought several Milwaukee tools from three different sellers and was charged no sales tax by any of the three. I can't see how a state has any power over a seller that is outside their state. What law would the state use to force the seller to pay a tax when they are located in another state?

[rschrum]

Ever do a search for wasted state tax dollars? I rest my case.

[frozengoose]

I don't know if it is so much Ebay as it is the seller maybe? ...What law would the state use to force the seller to pay a tax when they are located in another state?

You can thank a supreme court ruling, this sort of explains it...

https://www.thebalancesmb.com/internet-sales-tax-what-is-the-law-4164865

In other words, it's not eBay or any other internet seller's fault, it's now a federal law that states can collect sales tax on out of state sales. Kind of sucks, but there you go.

[grebmrof]

...and I believe Amazon (another ebay like facilitator) collects sales tax on each sale no matter what state the seller is shipping from, collecting the sales tax from the buyer and the state the items are shipped to...  Yes, a fairly recent development.  Been in the news over the past several years.  No matter new or used items.  Every used book I buy through Amazon seems to attract sales tax these days...sigh...  I also noticed that iTunes now charges sales tax on each song that I download (yes, I know this is a bit "old fashioned" vs listening to music on Spotify or some other player)...another sigh...

BTW, this is not thread drift, but thread expansion...

[brider]

A brief historical perspective may be enlightening, as well a showing where we are headed.

 Once they have the big operators tamed, they move in on the smaller ones, until anyone who sells/exchanges anything is caught and pays over their tax

Malik's points sound accurate and eye-opening; but I would have thought given the ubiquity of Facebook, that their Marketplace would have been targeted by the States to get their fair share of the sales. Anybody have any experience that would suggest this? I myself have not had any bad experiences with CL so I continue to use it frequently, but after this discussion, expect that easy-ride to be affected soon, also. Unless CL as a "business" is exempt from being required to collect, by virtue of it's business model?

[Luap McKeever]

It's a sales tax and I personally love it as a small business owner. I've lost business to people that shop online only to save a buck or two. Not to start a debate, but if you own a small business and you have to collect and pay sales taxes every month for years and see your business slowing down while eBay, Amazon, etc thrive without having to do that, you will think "it's a bout time the playing field is even". Not to mention the benefits your county gets from the taxes too. Counties are funded by this sales tax, so when they collect from online sales, your local police, 911 services, roads and bridges are all going to be better.

[Lannis]

It's a sales tax and I personally love it .....

Uh oh.  I have a funny feeling that I know what the sales tax is going to be collected on next ..... !