Depends on the state. Many states charge sales tax on coin purchases, and some (like California) charge tax on purchases under $1,000. They're retail businesses like any other in the eyes of the state...
I cant speak for other states, but Tx dealers are required to take sales tax on all in-state invoices under $1000... If they send the coin to a Texas address, they are required to collect the tax.
In MN, the sales tax is 6.5%. As a result, most of my sales in MN, other than to other dealers, are for relatively low value coins (i.e., under $500). It is easier to work the sales tax into lower priced coins.
I remember selling one coin this year in MN where the sales tax was about $35; my profit, about $8- it sucked
I love setting up in states like IL, FL*, etc., where there is no sales tax.
Where sales over $1000 are exempt, I wonder how many people buy $300 in coins they really don't want along with a $700 coin they *did* want in order to not pay tax on it. I'd have to think it's not trivial.
Does your state have a law that requires you to pay tax on out of state purchases as in mail order in all of its forms? Mine does tho I wonder how many really follow it. Edited to add: Not really sure how coin sales are treated. I think it depends on how you pay. If you buy from a dealer at a show using a form of payment that can be traced such as a check or CC then its taxed. I wonder how many coins are reported as "stolen at a show' to cover up a cash transaction?
<< <i>The sales tax is why I buy most of my coins from out of state dealers! >>
And when I do buy from in-state dealers, I consider what I'm willing to pay for a coin and knock 10% off of it (actually about 8% but the math is easier for 10%) -- unless the amount is over $1,000.
Which, of course, makes it less likely for me to find the coins I want from in-state dealers.
<< <i> Does your state have a law that requires you to pay tax on out of state purchases as in mail order in all of its forms? Mine does tho I wonder how many really follow it. >>
I think many (if not all) states with a sales tax have this on the books -- but there is really no enforcement mechanism right now. An enforcement mechanism would require a law regulating interstate commerce (and an act of Congress), and as much as some tax-hungry states have lobbied Congress to get that, as of yet there is none. Of course, states can enter their own reciprocal agreements, but to do this nationwide would either require an act of Congress or all states with sales taxes to enter reciprocal agreements with ALL other states collecting a sales tax. And since some states benefit more from out-of-state purchases from taxpaying sellers in their state than they'd collect in additional sales taxes, many states want no part of that as their out-of-state sales could dry up.
What if your state Revenoors decided to look at your eBay purchases? Could they require you to pay the tax then? Tracks like that are very hard or impossible to hide.
<< <i>What if your state Revenoors decided to look at your eBay purchases? Could they require you to pay the tax then? Tracks like that are very hard or impossible to hide. >>
As I understand it, that could only happen under current law if eBay voluntarily gave specific user information (name, address, etc.) out to the states voluntarily or by a court order. The state tax collection and enforcement authorities can only look at handles as far as public record (unless they participated in auctions by sellers, in which case they could get information from eBay).
Courts are loathe to enter the picture where interstate commerce is concerned, rightly citing that as a Congressional function and not a judicial one. As for the former (eBay giving user out to the states), the firestorm that would develop from privacy advocates and anti-tax forces would badly damage them, so there's no way they would do this voluntarily.
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David
I remember selling one coin this year in MN where the sales tax was about $35; my profit, about $8- it sucked
I love setting up in states like IL, FL*, etc., where there is no sales tax.
*, except as noted above.
Edited to add: Not really sure how coin sales are treated. I think it depends on how you pay. If you buy from a dealer at a show using a form of payment that can be traced such as a check or CC then its taxed. I wonder how many coins are reported as "stolen at a show' to cover up a cash transaction?
Ray
<< <i>The sales tax is why I buy most of my coins from out of state dealers! >>
And when I do buy from in-state dealers, I consider what I'm willing to pay for a coin and knock 10% off of it (actually about 8% but the math is easier for 10%) -- unless the amount is over $1,000.
Which, of course, makes it less likely for me to find the coins I want from in-state dealers.
<< <i> Does your state have a law that requires you to pay tax on out of state purchases as in mail order in all of its forms? Mine does tho I wonder how many really follow it. >>
I think many (if not all) states with a sales tax have this on the books -- but there is really no enforcement mechanism right now. An enforcement mechanism would require a law regulating interstate commerce (and an act of Congress), and as much as some tax-hungry states have lobbied Congress to get that, as of yet there is none. Of course, states can enter their own reciprocal agreements, but to do this nationwide would either require an act of Congress or all states with sales taxes to enter reciprocal agreements with ALL other states collecting a sales tax. And since some states benefit more from out-of-state purchases from taxpaying sellers in their state than they'd collect in additional sales taxes, many states want no part of that as their out-of-state sales could dry up.
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<< <i>What if your state Revenoors decided to look at your eBay purchases? Could they require you to pay the tax then? Tracks like that are very hard or impossible to hide. >>
As I understand it, that could only happen under current law if eBay voluntarily gave specific user information (name, address, etc.) out to the states voluntarily or by a court order. The state tax collection and enforcement authorities can only look at handles as far as public record (unless they participated in auctions by sellers, in which case they could get information from eBay).
Courts are loathe to enter the picture where interstate commerce is concerned, rightly citing that as a Congressional function and not a judicial one. As for the former (eBay giving user out to the states), the firestorm that would develop from privacy advocates and anti-tax forces would badly damage them, so there's no way they would do this voluntarily.