ebay tax question

1907Quarter

I'll admit it, I live in Pennsylvania. I just bought a coin from a seller who lives in PA(or whose P.O. is in PA. Is the 6% tax an automatic or only if it is a "business"?

Russ

That varies state by state but, generally speaking, if sales tax is due on an item somebody is responsible for that tax - business or not.

Russ, NCNE

sinin1

You live in PA, what are the state tax rules there - Russ is correct, in that in most states the liability rests on the seller to collect it.

Some states may not even have sales tax on collectible coins - CA is exempt if over $1000, I believe.

Some states have a use tax that buyers are supposed to pay for purchases made out of their state (mailorder/travel) that avoided the states cut.

You could always call up your states tax office and ask them (do it from a pay phone in case they have caller ID)

drsvenghali

As of late, WI has been sending out notices to select taxpayers asking for a reevaluation of out of state purchases. WI collects state tax on out of states purchases, i.e. eBay. I guess if you don't admit it, they'll have to prove your purchases.

SHHHHH!!! Gotta go. I think they're watching.

gmarguli

If it is a business, then the sales tax will probably be added. Unless they actually have a store, I wouldn't pay it. Or you can ask for their tax ID number and inform them that you report all sales taxed transactions to the tax board .

Elcontador

The seller is obligated to collect sales tax on taxable transactions. Re E-Bay, this would apply to all vendors who are selling to end-users in a state where both of them have a physical presence and said state has a sales tax.

It also applies to applicable transactions where a seller in state A sells to an end-user in state B where state B has a sales tax and the seller has a permit to do business with state B's Department of Revenue (this situation applies to entities like Heritage, while they are based in Texas, they collect sales tax on sales under $1,000 in California).

If you are a California collector & purchase a coin from say, B & M (located in New Hampshire & are not permitized by the California State Board of Equalization), Bowers is not required to collect sales
tax on the transaction, even if it is under $1,000. However, technically, the collector, as he is using this personal property in California, is supposed to report this purchase to the Board of Equalization & ante-up. Practically speaking, the B of E doesn't have the resources to go about collecting this use tax, and no one volunteers to pay it.

drsvenghali

Yep. What he said.

my3cents

Out of curiosity....

I remember reading somewhere that profits gained on the sale of US minted coins are tax free. Anyone want to chime in on this one?

jtryka

anyone know the rules for washington state? I just moved here from Oregon where there is no sales tax at all so suddenly this has become an issue for me!

ursabear

I track all the sales I make in NC (or at least I work hard at it), and I pay the NC tax on them, without collecting from the customer on all my eBay sales. NC makes it fairly easy on the tax forms, so it is just a great deal easier to deal with it on my end.

BAJJERFAN

Only if its a business with a tax ID number. I don't think a person to person casual sale is a taxable event unless it involves autos.
This sale is taxable because it is intrastate and doesn't matter if its thru the internet (eBay) phone, mail or face to face. As a general rule there is no tax on interstate sales in most places YET!!!

BigD5

My 3 cents, I never heard of that.
If you are doing "occasional" sales, I wouldn't bother with the Sales Tax issue. As Elcontador stated, the agencies governing that sort of thing aren't going to hunt you down for selling a $100 coin on line. Illegal? Yes, but realistically unenforceable.
Now if you are doing a bit more than "occasional", well then.......................
I love NH...no sales tax......no income tax.........what a place

sinin1

Most states are looking for more income - they are starting to look at people who have garage sales every week and continous sellers on internet auction sites - and saying this is NOT an occasional or casual seller and in fact they are doing it as a business SO, even if they have not they should have been, and are from now on required too, have a states tax sellers ID and collect state sales tax. Not sure how your state is.

oreville

<< <i>Out of curiosity.... I remember reading somewhere that profits gained on the sale of US minted coins are tax free. Anyone want to chime in on this one? >>



If you mean tax on gains then it is true provided that such items sold are items bought within an IRA or SEP IRA, etc. I believe only the SAE's, gold and platinum coins that are specifically permitted to be held in an IRA.

But then again gains on sales of such items within an IRA is only tax deferred until distributions begin after the normal 59 1/2 years old time element.

Some states offer an annual exemption such as New York which does not tax the first $20,000 of taxable portion of IRA proceeds annually.

Nearly every state is different.

There is once again talk of a national sales tax or VAT (value added tax) in order to "pay" for a permanent repeal of the estate tax and modest additional income tax reduction. I am afraid once that does happen, the internet will no longer be sales tax free.

BAJJERFAN

If I live in Iowa and sell a $100 coin to someone in CA I think it is unreasonable for the state of IA to expect me to collect $6 on the sale and incur the expense to send it to them. I expect to see a line on the state tax form some time in the future for sales tax collected. As computers become more common and sophisticated this will soon be a reality.

Elcontador

A couple of things.

Darin, I hope you are a renter in New Hampshire. With no income or sales taxes, they probably take a
big bite out of a bunda re real estate and / or school taxes.

Yes, states are looking for more revenue. The best way for them to do this is to look for evidence
that a company or individual is either domiciled or doing business there on a regular basis.

If you are regularly selling product to entities in a particular state, there is a nexus and you should be filing a partial / non-resident in that state (assuming there is an income tax in that jurisdiction). Likewise, if you have a P.O. box in a state, some of them -- like New York -- will take the position that you are a resident unless you can prove otherwise.

Accordingly, expect to see various state revenue departments lobby re taxing the internet in a big way.
Technically, Amazon.com should be filing income tax returns in every taxing jurisdiction in the U.S. based on their sales. I used to do the corporate federal and multi-state filings of a listed company on one of
stock exchanges; I know how this sort of thing works. This, and excise taxes, are where the big $ is for the states.

BigD5

No, I am paying the HUGE real estate taxes here

supercoin

1970Quarter, in most states as the buyer you are ultimately responsible for paying the sales tax (or "use tax" or "in lieue of" tax) regardless of where you purchased the coin. Just because the seller doesn't collect it doesn't mean you get out of it. Legally, anyway. Obviously it's pretty hard to collect which is why businesses are generally forced to collect it on behalf of the gov't except for (currently) out-of-state sales.

jtryka, I moved from Washington state a while back. There is no sales tax on coins, you've got no worries.

There is sales tax in Minnesota where I live now. I don't sell within the state for that reason to avoid the additional licensing, tax collection, and reporting requirements. Too much of a PITA for what is (was) about 1% of my sales.