Teletrade and California State Sales Tax

19Lyds

I just realized on my latest Teletrade invoice that I am being charged California State Sales Tax on the shipping charges.



Is this cool or uncool?

Is it even legal?

WTCG

It's legal and all the auction companies calculate sales tax the same way.

johnny9434

i might want to check a little more closely on the sales tax on the shipping. it seems that theres something way wrong with that. you have nothing to lose on that in this case best wishes john

BAJJERFAN

<< <i>i might want to check a little more closely on the sales tax on the shipping. it seems that theres something way wrong with that. you have nothing to lose on that in this case best wishes john >>



When TT takes a CC or PP they pay the fee on the shipping and the sales tax.

Then again the local post office DOES NOT charge sales tax for their services.

TwoSides2aCoin

I pay what I have to pay to get the coins I have to get.

JCMhouston

Califorinia needs the money, just pay it.

PerryHall

I never realized California's sales tax was so high---8.25%.

TwoSides2aCoin

<< <i>I never realized California's sales tax was so high---8.25%. >>


I think Lee's bigger issue is the extra $1.03 sales tax on the $12.50 shipping and handling charge.

It adds up and doesn't seem particularly fair.

MadMarty

<< <i>I never realized California's sales tax was so high---8.25%. >>



Try Chicago, 10.25%!!!

I thought they couldn't charge tax unless they have a presence in the state you live in, then they have to charge you your tax rate? BTW, Heritage has never charged me tax on coins.

1tommy

Subtotal 80.00 1
Buyer's Fee 12.00
Postage and handling 5.00
________

Total 97.00 ok since im new to teletrade i don't understand you win a coin by bidding 80 bucks, than they tack on 15 percent buyers fee 12.00 does the seller get 92.00? and what fees is teletrade charging. glad i don't live in calif anymore to me thats crazy they tax everything and not just the original price that you bid, even the buyers fee you get taxed that can make a good deal change to a break even deal........................

messydesk

If the 15% fee was a surprise, then you need to familiarize yourself with TT's (and any other auction company's) fee structure before bidding. The buyer typically pays a fee as well, and in this case will receive $80 minus that fee.

lkeigwin

Generally, CA sales tax does not apply to delivery charges if the charges are clearly stated as a separate entry on the invoice or other bill of sale. If the delivery charges are not stated separately, they are taxable.

For those with insomnia, here are the rule for shipping and tax in CA. Can't wait til these guys run health care.
Lance.

Delivery-related charge is not taxable when:
All of these conditions must apply:
- You ship directly to the purchaser by common carrier, contract carrier, or US Mail;
- Your invoice clearly lists delivery, shipping, freight, or postage as a separate charge;
- The charge is not higher than your actual cost for delivery to customer.
Exception: Charge is taxable if you do not maintain records that show the actual cost of the delivery.

Delivery-related charge is taxable when:
- You do not keep records that show the actual cost of the delivery.
- You deliver merchandise with your own vehicles.
- You make a separately stated charge for fuel sur­charge or “handling,” etc.
- You include a delivery charge in the unit price of the item sold.
- Your charge to your customer represents the cost of shipping the merchandise to your place of business (“freight-in”).
- You make a sale for a delivered price (sales agreement specifies that delivery is included in price, whether delivery charge is listed separately, included in per-item cost, or listed as “freight prepaid”).

19Lyds

<< <i>Generally, CA sales tax does not apply to delivery charges if the charges are clearly stated as a separate entry on the invoice or other bill of sale. If the delivery charges are not stated separately, they are taxable.

For those with insomnia, here are the rule for shipping and tax in CA. Can't wait til these guys run health care.
Lance.

Delivery-related charge is not taxable when:
All of these conditions must apply:
- You ship directly to the purchaser by common carrier, contract carrier, or US Mail;
- Your invoice clearly lists delivery, shipping, freight, or postage as a separate charge;
- The charge is not higher than your actual cost for delivery to customer.
Exception: Charge is taxable if you do not maintain records that show the actual cost of the delivery.

Delivery-related charge is taxable when:
- You do not keep records that show the actual cost of the delivery.
- You deliver merchandise with your own vehicles.
- You make a separately stated charge for fuel sur­charge or “handling,” etc.
- You include a delivery charge in the unit price of the item sold.
- Your charge to your customer represents the cost of shipping the merchandise to your place of business (“freight-in”).
- You make a sale for a delivered price (sales agreement specifies that delivery is included in price, whether delivery charge is listed separately, included in per-item cost, or listed as “freight prepaid”). >>



Well, according to what you've quoted, it appears that it is an improper charge.

messydesk

<< <i>Well, according to what you've quoted, it appears that it is an improper charge. >>


Not so sure:


<< <i>Delivery-related charge is not taxable when:
All of these conditions must apply:
...
- Your invoice clearly lists delivery, shipping, freight, or postage as a separate charge;

Delivery-related charge is taxable when:
- You make a separately stated charge for fuel sur­charge or “handling,” etc. >>


Since you're charged a single S&H charge, which doesn't list the shipping separately, one of the conditions that must apply is not met. If they were to break out the handling fee, then it sounds like it would become taxable under the second set of rules that trigger taxable delivery charges. It's probably easiest for TT just to establish their S&H fee schedule and collect tax on the full amount than go through the trouble of determining exact postage before invoicing and then risking running afoul of the gummint for not collecting enough sales tax.

RedTiger

<< <i>Subtotal 80.00 1
Buyer's Fee 12.00
Postage and handling 5.00
________

Total 97.00 ok since im new to teletrade i don't understand you win a coin by bidding 80 bucks, than they tack on 15 percent buyers fee 12.00 does the seller get 92.00? and what fees is teletrade charging. glad i don't live in calif anymore to me thats crazy they tax everything and not just the original price that you bid, even the buyers fee you get taxed that can make a good deal change to a break even deal........................ >>



No, the seller gets the hammer price less the seller's fees (8% for under $800, with $8 minimum per lot). So in this case, seller gets $72. Seller is also out shipping for getting the coins to Teletrade.

COALPORTER

What really pees me off is when buying the news paper inside the store and they charge sales tax on a 75 cent paper when it clearly says sales tax included.

PerryHall

<< <i>

<< <i>I never realized California's sales tax was so high---8.25%. >>



Try Chicago, 10.25%!!! >>



Makes sense when you consider that B.O. was from there.

AMRC

Actually I just called the State and the reply was that I should not be charging sales tax on the actual shipping cost. If I am charging a premium for shipping (envelope, label, time) then I would tax it. It was a very enlightening call.

notwilight

<< <i>It's legal and all the auction companies calculate sales tax the same way. >>



I don't think so. I don't charge sales tax on my shipping charges and I think most dealers don't.

The e-bay sales tax algorithm doesn't charge tax on shipping.

--Jerry

19Lyds

<< <i>Actually I just called the State and the reply was that I should not be charging sales tax on the actual shipping cost. If I am charging a premium for shipping (envelope, label, time) then I would tax it. It was a very enlightening call. >>



Which is the purpose of my question.

Sales tax is not beong charged on "part" of the Postage and Handling but "all" of the postage and handling.

Bear

California is set to impose a Thumb Tax. If you got a thumb or two, they

will be taxed.In addition, a new tax is pending ,based upon how much air

a person breaths. Deep breaths, higher tax.

WTCG

<< <i>I never realized California's sales tax was so high---8.25%. >>



It's actually higher than that depending on the county. In my county it's 9.25%.

IwantNonCCs

OK, what about the buyers fee. Since this is, i think, for a service (labor), should
CA sales tax be charged on that? I know the auto mechanic charges tax on parts but not labor.

LindeDad

I think they are charging under the exception.



<< <i>Exception: Charge is taxable if you do not maintain records that show the actual cost of the delivery. >>



Arn't they charging flat rate shipping?

BillJones

I've had resale numbers in Massachusetts, Connecticut and Florida. NONE of those states required sellers to collect sales tax on shipping charges including the cost of the shipping materials and the postage. After all I had already paid either sales or use tax on the shipping materials, so why should the state collect again?

I think you are getting hosed.

BillJones

<< <i>OK, what about the buyers fee. Since this is, i think, for a service (labor), should
CA sales tax be charged on that? I know the auto mechanic charges tax on parts but not labor. >>



The buyer's fee is part of the sales price. It's taxable.

19Lyds

<< <i>I think they are charging under the exception.



<< <i>Exception: Charge is taxable if you do not maintain records that show the actual cost of the delivery. >>



Arn't they charging flat rate shipping? >>



Not in the true sense of like Priority Mail Flat Rate but they do publish the following Postage and Handling chart:



I also emailed them about this:

"I'm a little confused on this invoice since it appears that Teletrade is charging me California Sales Tax on the shipping charges.

What's up with this?

Is it even legal?"

And received the following reply:

"Dear Mr. Lydston,

Thank you for your inquiry. Shipping charges are taxable in California as a service, yes absolutely legal. If you have further questions in this regard, please call our toll free number. We appreciate your business and thank you for choosing our services.

Regards,


Cheryl Hartigan | Assistant Controller| Teletrade
*:: 18061 Fitch | Irvine, CA | 92614
(:: 800.949.2646, x263 | 6:: 949.250.9290
8:: cherylh@Teletrade.com "

So, it appears that they truely feel they are within their rights and obligations to charge Sales Tax on "Postage and Handling" as a service.

Pressing the issue could get my account suspended since it's a free country and folks can pick and choose who they wish to do business with.

Shall I call the Franchise Tax Board?

BTW, Teletrade is located in Irvine California.

ranshdow

<i>I never realized California's sales tax was so high---8.25%<i>

Sales tax is also higher in some California municipalities- 9, 9.5% in some case. We are also hit with a ~9.5% income tax.

Call it a sunshine tax, a fruit n' nut tax, &c..

PawPaul

< Exception: Charge is taxable if you do not maintain records that show the actual cost of the delivery. >>


what the ...........

i bet T.T keeps track of their shipping costs , seems like they would have to -

to know how much sale's tax to pay the state on them

COALPORTER

Why don't you just call the Board of Equalization and see what they have to say ?

adamlaneus

<< <i>Shall I call the Franchise Tax Board? >>



I think you are picking the wrong battle.

Buying the right coin for your collection versus buying the wrong coin for your collection is a much more important decision than an argument over about a dollar worth of tax. Especially considering that you are likely to lose that argument over that dollar. Isn't your time worth more than this? Isn't there something more important to focus on?
I know most of us have a strong anti-tax sentiment and I think that's good. But pick your battles carefully to maximize your effectiveness.

BAJJERFAN

<< <i>< Exception: Charge is taxable if you do not maintain records that show the actual cost of the delivery. >>


what the ...........

i bet T.T keeps track of their shipping costs , seems like they would have to -

to know how much sale's tax to pay the state on them >>



Of course they do, but I doubt if they keep a record of the charges to ship your exact specific individual purchase. They charge the same to ship 10 $40 slabbed coins as they do one slabbed $400 coin, but due to the weight difference, I doubt that it actually costs them the same.

Bochiman

<< <i>

<< <i>< Exception: Charge is taxable if you do not maintain records that show the actual cost of the delivery. >>


what the ...........

i bet T.T keeps track of their shipping costs , seems like they would have to -

to know how much sale's tax to pay the state on them >>



Of course they do, but I doubt if they keep a record of the charges to ship your exact specific individual purchase. They charge the same to ship 10 $40 slabbed coins as they do one slabbed $400 coin, but due to the weight difference, I doubt that it actually costs them the same. >>



And, THAT, is probably what allows the taxation.
From what was earlier posted:

Delivery-related charge is not taxable when:
All of these conditions must apply:
- You ship directly to the purchaser by common carrier, contract carrier, or US Mail;
- Your invoice clearly lists delivery, shipping, freight, or postage as a separate charge;
- The charge is not higher than your actual cost for delivery to customer.

Note, it says "ALL" and then the last bolded point is likely what makes a difference to allow the taxation where the charge may be higher than actual cost. Since they state the amount for a range, you can bet that some fall under the amount and some fall above.

I doubt this is a battle that is worth a lot. If it is, run it through with them in more than just 1 email. Why not contact the higher ups, who will punt to their accountants? Fighting the battle on a forum is silly, imho

PawPaul

yes, silly battle

but I sure loved Arnie in Terminator !

19Lyds

<< <i>

<< <i>

<< <i>< Exception: Charge is taxable if you do not maintain records that show the actual cost of the delivery. >>


what the ...........

i bet T.T keeps track of their shipping costs , seems like they would have to -

to know how much sale's tax to pay the state on them >>



Of course they do, but I doubt if they keep a record of the charges to ship your exact specific individual purchase. They charge the same to ship 10 $40 slabbed coins as they do one slabbed $400 coin, but due to the weight difference, I doubt that it actually costs them the same. >>



And, THAT, is probably what allows the taxation.
From what was earlier posted:

Delivery-related charge is not taxable when:
All of these conditions must apply:
- You ship directly to the purchaser by common carrier, contract carrier, or US Mail;
- Your invoice clearly lists delivery, shipping, freight, or postage as a separate charge;
- The charge is not higher than your actual cost for delivery to customer.

Note, it says "ALL" and then the last bolded point is likely what makes a difference to allow the taxation where the charge may be higher than actual cost. Since they state the amount for a range, you can bet that some fall under the amount and some fall above.

I doubt this is a battle that is worth a lot. If it is, run it through with them in more than just 1 email. Why not contact the higher ups, who will punt to their accountants? Fighting the battle on a forum is silly, imho >>

I'm not trying to fight a "battle" on the forums, simply discussing and getting ideas on something which I think few were aware of and something which just doesn't appear to be right.

yellowkid

<< <i>I never realized California's sales tax was so high---8.25%. >>



Almost 10% of what you spend goes to the State, pretty sad.

CarlWohlforth

I'm happy to see that it looks like I am correct in not charging tax on shipping charges. However it is 9.25% here in Santa Clara County (hi WTCG!)

I have a seller's permit so don't pay TT's sales tax. But then again I am expected to re-sell the coin and collect tax when I do.

AMRC

California Sales Tax policy on Shipping

BillJones

<< <i>Califorinia needs the money, just pay it. >>



No, the California governor and legislature need to learn to spend within their means. These guys are like alcoholics. Giving them more booze is not going to solve their drinking problem.

19Lyds

<< <i>

<< <i>Califorinia needs the money, just pay it. >>



No, the California governor and legislature need to learn to spend within their means. These guys are like alcoholics. Giving them more booze is not going to solve their drinking problem. >>



Well, if Whitman makes it into office I expect all the tax rates to change anyway.

12% on the first $25.00 spent
8% on any amounts from $25.01 upto $100
6% on any amounts from $100.01 upto $1,000
4% on any amounts over $1,000.01

That'll cause quite a stir at McDonalds!

BillJones

If she does that, things will get worse in California. Excessive government spending has ceased to be a laughing matter or even a partisan matter for those who care about what is happening in the U.S. and the rest of the world. Just look at the financial problems that the European Union is facing. We can't tax our way out of this mess.

19Lyds

While I appreciate your answer Bill, I think it's also important to understand that "excessive government spending" can be directly related to some of the whacky and selfish propositions and initiatives that have been approved by the voters of this Great State over the years when money was flowing in the streets.

Well, those streets now need repairing and everybody whines about it but nobody wants to pay for it.
The schools need repairing and everybody whines about it but nobody wants to pay for it.
The police and fire departments are short handed because nobody wants to pay for the services yet they are the first to whine and complain about it when its late to respond.

The list goes on and on.

Everybody wants something for free.