Anyone else receive this "ebay"warning?

[sylbry]

Re: Anyone else receive this "ebay"warning?

Beyond the fact that the Congress does have the authority to regulate interstate commerce via the Commerce Clause, this statement is completely false. I already took the time to explain why and offered some practical advice but the website timed me out and I lost my post. You will have to forgive me for not re-typing it.

Let me add that for the most part collectors really never have to worry about taxes on the sales side.

The area that should concern collectors is on the purchase side. Sales/use taxes are transaction taxes. One or the other is due on the transaction (unless an exemption exists). If you do not pay sales tax at the time of purchase you owe use tax. Just because you (generally speaking) bought it on ebay or from someone who didn't collect sales tax doesn't mean the purchase is not subject to taxation.

Just know you do have a tax liability to your home state. However the likelihood of that coming back to bite you is very remote.

[sylbry]

Re: Anyone else receive this "ebay"warning?

Sales Tax cannot be collected on an item sold to an individual in another state per the US Commercial Code regulating Interstate Sales which is why eBay and on-line sites are popular with many consumer's.

Beyond the fact that the Congress does have the authority to regulate interstate commerce via the Commerce Clause, this statement is completely false. I already took the time to explain why and offered some practical advice but the website timed me out and I lost my post. You will have to forgive me for not re-typing it.

[xpress34]

Re: Anyone else receive this "ebay"warning?

If you are purchasing "tangible personal property", state sales (or use) tax is collected/paid on the purchase (unless an exemption exists) and federal and state (if applicable) income tax is due on the sale if a profit is made.

Sales Tax cannot be collected on an item sold to an individual in another state per the US Commercial Code regulating Interstate Sales which is why eBay and on-line sites are popular with many consumer's.

Same reason almost all Credit Cards are run out of CT - Texas and other states have very restrictive laws that limit the annual fees and APR that Credit Card issuers may charge - CT does not. Some of that may be changing soon with new Federal Guidlines on Credit Practices.

However, every purchase I have ever made on eBay from someone else in the State of Colorado HAS had Sales Tax added to the final sale price.

This is similar to how people use to buy cars in Texas (my home state). They would drive from Dallas to Seagoville so they could pay Seagoville taxes on the car, not Dallas taxes. I believe Texas adopted the same system Colorado uses to eliminate that loophole - you now only pay STATE sales tax on the purchase at the dealership - the City, County, Local taxes are paid at the DMV when you get your plates and Registration based on YOUR HOME ADDRESS. That way cities aren't losing dollars from their tax coffers if residents buy their car in another city.

Just some FYI

- Chris

[sylbry]

Re: Anyone else receive this "ebay"warning?

Thanks guys for clarifying.

Two more questions: Is sales tax considered part of the initial purchase price? Can losses on sales be duducted for tax purposes?

Yes, sales tax is part of the purchase price if you are a hobbyist. If you are a business, you would provide the seller with a resale certificate and buy it sales tax exempt.

Business losses can be deducted. Hobby losses can not.

[PwKw13]

Re: Anyone else receive this "ebay"warning?

Thanks guys for clarifying.

Two more questions: Is sales tax considered part of the initial purchase price? Can losses on sales be duducted for tax purposes?

[sylbry]

Re: Anyone else receive this "ebay"warning?

This is something that I've never understood. Why should taxes be paid on both ends -- when buying and selling? If an item is going to be treated as an investment and taxes are paid on the gain, why should sales tax be paid up front? Sales tax isn't paid on the original purchase price of a stock.

If you are purchasing "tangible personal property", state sales (or use) tax is collected/paid on the purchase (unless an exemption exists) and federal and state (if applicable) income tax is due on the sale if a profit is made.

[5kRunner]

Re: Anyone else receive this "ebay"warning?

This is something that I've never understood. Why should taxes be paid on both ends -- when buying and selling? If an item is going to be treated as an investment and taxes are paid on the gain, why should sales tax be paid up front? Sales tax isn't paid on the original purchase price of a stock.

Stock is a bad comparison. Stock is a security. Sales tax is never paid on securities.

Jerseys/Bats/Helmets etc are goods. Basically, unless you buy goods for resale you should be paying sales tax on them.

[PwKw13]

Re: Anyone else receive this "ebay"warning?

In some states i.e. New York it is not just the seller who faces possible tax issues as the buyer is responsible for paying sales tax. For purchases that the seller did not charge tax the buyer is supposed to remit the tax owed for all such purchases to the State when filing his or her tax return. Currently it is on the honor system but if that changes it will help kill Ebay.

This is something that I've never understood. Why should taxes be paid on both ends -- when buying and selling? If an item is going to be treated as an investment and taxes are paid on the gain, why should sales tax be paid up front? Sales tax isn't paid on the original purchase price of a stock.

[sylbry]

Re: Anyone else receive this "ebay"warning?

In some states i.e. New York it is not just the seller who faces possible tax issues as the buyer is responsible for paying sales tax. For purchases that the seller did not charge tax the buyer is supposed to remit the tax owed for all such purchases to the State when filing his or her tax return. Currently it is on the honor system but if that changes it will help kill Ebay.

Many states have use tax lines on their state income tax returns for individuals to remit sales tax on items they purchased and didn't pay sales tax. But many states also have a minimum threshold (here in MN it is $600).

Most people have no idea the number of pitfuls on ebay when it comes to taxes; from income tax, to collecting sales tax on instate sales, to remitting use tax on purchases. If Quill v North Dakota ever gets reversed then a whole new can of worms appears.

[transam9572]

Re: Anyone else receive this "ebay"warning?

I stopped using paypal for this reason. Nice post.

[legaleagle92481]

Re: Anyone else receive this "ebay"warning?

In some states i.e. New York it is not just the seller who faces possible tax issues as the buyer is responsible for paying sales tax. For purchases that the seller did not charge tax the buyer is supposed to remit the tax owed for all such purchases to the State when filing his or her tax return. Currently it is on the honor system but if that changes it will help kill Ebay.

[bigtime59]

Re: Anyone else receive this "ebay"warning?

The minute everybody selling on eBay has to run their "business" like an actual "business" is the minute eBay shrivels up and blows away.
The day after, somebody will be making a fortune off the bartering site they just set up.

[34swtns]

Re: Anyone else receive this "ebay"warning?

If you sell an item for more than you pay for it, the amount above what you paid for the item is taxable. I.E. you buy a game used jersey for $400 and you turn around and sell it on Ebay for $600, the $200 difference between what you paid and what you made is taxable.

Makes you wonder how long before ebay and other auction houses are more closely regulated by the gub'ment.
'Cause they're losing a TON of money in taxable income every day and don't think they don't know it.

[legaleagle92481]

Re: Anyone else receive this "ebay"warning?

It would make sense that people should report their earnings from ebay if they are selling hundreds of items a week as there sole source of income. But I don't see how it would be fair for someone who is simply selling a few things to just to get rid of them. I mean, if you have a garage sale at your house, you don't have to record that and pay taxes on the money earned do you? What does everyone else think?

If you sell an item for more than you pay for it, the amount above what you paid for the item is taxable. I.E. you buy a game used jersey for $400 and you turn around and sell it on Ebay for $600, the $200 difference between what you paid and what you made is taxable. It is like if you invest in a stock that appreciates and then you sell it or if you sell your house, the gain is taxable. When you have a garage sale most stuff is sold for less than you paid so it is not taxable because there is nothing to tax if you sell for less than you paid.

[Rossi46]

Re: Anyone else receive this "ebay"warning?

It would make sense that people should report their earnings from ebay if they are selling hundreds of items a week as there sole source of income. But I don't see how it would be fair for someone who is simply selling a few things to just to get rid of them. I mean, if you have a garage sale at your house, you don't have to record that and pay taxes on the money earned do you? What does everyone else think?