Sales Tax on Ebay?

mudflap02 · Jan 11, 2012

I'm trying to pay for an ~80 item I won, and there is TX sales tax on the invoice. I am a buyer in TX, the seller is in IL, and has under 200 feedback. At first I thought it was a new ebay policy, but I looked at a $120 item I bought 2 days ago and I didn't pay sales tax on that.

I can't recall ever paying sales tax on ebay. Is this just a seller trying to get an extra $8 out of me?

triplehattrick21 · Jan 11, 2012

mudflap02 said:
I'm trying to pay for an ~80 item I won, and there is TX sales tax on the invoice. I am a buyer in TX, the seller is in IL, and has under 200 feedback. At first I thought it was a new ebay policy, but I looked at a $120 item I bought 2 days ago and I didn't pay sales tax on that.

I can't recall ever paying sales tax on ebay. Is this just a seller trying to get an extra $8 out of me?

Technically all sellers should charge sales tax, and technically all sellers should claim taxes to the IRS even if they only sell one card for the entire year for say 1000.00. But as most people know, the only way sellers are held accountable for this is if they have 200 transactions and 20,000.00 in sales. So if A) the seller isnt hitting 20k in sales and/or B) Not Claiming anything under 20k in sales, then from what Ive read into this whole Online sales law, he is taking 8.00 from you and not claiming it on his taxes.

Keyser Soze · Jan 11, 2012

triplehattrick21 said:
mudflap02 said:

I'm trying to pay for an ~80 item I won, and there is TX sales tax on the invoice. I am a buyer in TX, the seller is in IL, and has under 200 feedback. At first I thought it was a new ebay policy, but I looked at a $120 item I bought 2 days ago and I didn't pay sales tax on that.

I can't recall ever paying sales tax on ebay. Is this just a seller trying to get an extra $8 out of me?

Click to expand...

Technically all sellers should charge sales tax, and technically all sellers should claim taxes to the IRS even if they only sell one card for the entire year for say 1000.00. But as most people know, the only way sellers are held accountable for this is if they have 200 transactions and 20,000.00 in sales. So if A) the seller isnt hitting 20k in sales and/or B) Not Claiming anything under 20k in sales, then from what Ive read into this whole Online sales law, he is taking 8.00 from you and not claiming it on his taxes.

Agreed. Ask him for his (Texas) state tax ID number, all businesses that pay taxes in Texas should have one. If he doesn't have it, than he's stealing that money from you and he knows it. I would refuse to pay based on principal

mudflap02 · Jan 11, 2012

Keyser Soze said:
triplehattrick21 said:

mudflap02 said:

I'm trying to pay for an ~80 item I won, and there is TX sales tax on the invoice. I am a buyer in TX, the seller is in IL, and has under 200 feedback. At first I thought it was a new ebay policy, but I looked at a $120 item I bought 2 days ago and I didn't pay sales tax on that.

I can't recall ever paying sales tax on ebay. Is this just a seller trying to get an extra $8 out of me?

Click to expand...

Technically all sellers should charge sales tax, and technically all sellers should claim taxes to the IRS even if they only sell one card for the entire year for say 1000.00. But as most people know, the only way sellers are held accountable for this is if they have 200 transactions and 20,000.00 in sales. So if A) the seller isnt hitting 20k in sales and/or B) Not Claiming anything under 20k in sales, then from what Ive read into this whole Online sales law, he is taking 8.00 from you and not claiming it on his taxes.

Click to expand...

Agreed. Ask him for his (Texas) state tax ID number, all businesses that pay taxes in Texas should have one. If he doesn't have it, than he's stealing that money from you and he knows it. I would refuse to pay based on principal

Great idea. I can't imagine why a seller in Illinois would have a TX state tax ID.

Him -
I have a business account so the tax goes in on all transactions. so that is why its on there.. thanks for getting back so quickly

Me -

Nothing about sales tax in the auction, and I'm not ok with paying it for the first time in 12 years on ebay to a seller with under 200 feedback.

I'm fine with paying for the auction now for the purchase price and shipping costs because I would love to have the card in my collection.

Sorry to make a big deal out of it, but to be honest I feel like you're trying to get an extra $8 out of me which I did not agree to pay.

If you can provide me your Texas State Tax ID number, I will gladly pay the sales tax.

Thanks-
Jeff D

ChasHawk · Jan 11, 2012

Yup. Only time I've paid sales tax in 3 years was on a card from an Illinois seller who also happened to be a card shop.

If the card was coming from Texas, I could see the tax, but not from out of state.

matfanofold · Jan 11, 2012

mudflap02 said:
Keyser Soze said:

triplehattrick21 said:

mudflap02 said:

I'm trying to pay for an ~80 item I won, and there is TX sales tax on the invoice. I am a buyer in TX, the seller is in IL, and has under 200 feedback. At first I thought it was a new ebay policy, but I looked at a $120 item I bought 2 days ago and I didn't pay sales tax on that.

I can't recall ever paying sales tax on ebay. Is this just a seller trying to get an extra $8 out of me?

Click to expand...

Technically all sellers should charge sales tax, and technically all sellers should claim taxes to the IRS even if they only sell one card for the entire year for say 1000.00. But as most people know, the only way sellers are held accountable for this is if they have 200 transactions and 20,000.00 in sales. So if A) the seller isnt hitting 20k in sales and/or B) Not Claiming anything under 20k in sales, then from what Ive read into this whole Online sales law, he is taking 8.00 from you and not claiming it on his taxes.

Click to expand...

Agreed. Ask him for his (Texas) state tax ID number, all businesses that pay taxes in Texas should have one. If he doesn't have it, than he's stealing that money from you and he knows it. I would refuse to pay based on principal

Click to expand...

Great idea. I can't imagine why a seller in Illinois would have a TX state tax ID.

Him -
I have a business account so the tax goes in on all transactions. so that is why its on there.. thanks for getting back so quickly

Me -

Nothing about sales tax in the auction, and I'm not ok with paying it for the first time in 12 years on ebay to a seller with under 200 feedback.

I'm fine with paying for the auction now for the purchase price and shipping costs because I would love to have the card in my collection.

Sorry to make a big deal out of it, but to be honest I feel like you're trying to get an extra $8 out of me which I did not agree to pay.

If you can provide me your Texas State Tax ID number, I will gladly pay the sales tax.

Thanks-
Jeff D

My next reply would be....

"Thats fine, and I am willing to pay the sales tax if you could provide me with your TX Tax ID number or your W-9 which is required by all resale business/vendors. I would need these for my records in order to complete the sale. And for the future, if you are selling as a business/vendor, please include the additional tax fee (or percentage) in your listing as it is illegal in most states, including TX, to not advertise the total sale price (including the additional tax weither it be by total or percentage) with any publicly listed item, when and if you are indeed charging tax (IE: 'plus tax').

Have a great day"

cmnkb8 · Jan 11, 2012

And if he doesn't provide that info, be sure to slam him with a negative for trying to cheat you out of money that he wasn't entitled to collect.

Keyser Soze · Jan 11, 2012

cmnkb8 said:
And if he doesn't provide that info, be sure to slam him with a negative for trying to cheat you out of money that he wasn't entitled to collect.

If he quickly and quietly backs down on trying to collect the tax, and he sends you the card promtly and as described, I would give him a Neutral and mention in the feedback that the card was rec'd promptly and as described, but seller tried to illegally charge sales tax. I wouldn't Neg him for it, but he is lying with the intention of stealing from you, so I do think that warrants a neutral

chadwright · Jan 11, 2012

I don't think he has to charge sales tax because you are out of state.

ChasHawk · Jan 11, 2012

chadwright said:
I do think he has to charge sales tax because you are out of state.

He is only supposed to charge if he is IN state, unless for some odd reason he is required to pay sales tax to Texas.

And even if that IS the case, the tax is supposed to be in his ebay listing.

chadwright · Jan 11, 2012

ChasHawk said:
chadwright said:

I do think he has to charge sales tax because you are out of state.

Click to expand...

He is only supposed to charge if he is IN state, unless for some odd reason he is required to pay sales tax to Texas.

And even if that IS the case, the tax is supposed to be in his ebay listing.

Fixed it. I meant to type don't. Stupid iPhone.

MisterT · Jan 11, 2012

He only needs to pay the TX tax if he has a business in TX. For example, I used to not have to pay tax on LL Bean stuff I bought on line here in VA. Since they opened a physical store in Northern VA, now I do. Further, sales tax is very different from income tax on a sale - he may be saying that he will pay INCOME tax on the sale -- that is NOT the same as paying sales tax to the state of TX.

Unless he has a physical presence in TX, it is extremely unlikely that he is paying the taxes. You can always say you want to "verify" his story and call your State Treasurer to make sure he is paying TX state taxes (using he state tax ID), not IL state taxes.

ChasHawk · Jan 11, 2012

chadwright said:
ChasHawk said:

chadwright said:

I do think he has to charge sales tax because you are out of state.

Click to expand...

He is only supposed to charge if he is IN state, unless for some odd reason he is required to pay sales tax to Texas.

And even if that IS the case, the tax is supposed to be in his ebay listing.

Click to expand...

Fixed it. I meant to type don't. Stupid iPhone.

:lol:

Pinbreaker · Jan 11, 2012

The EBAY tax issue might change for 2012.. I have heard that EBAY is going to send out tax info for your sales to the IRS..

Last year I did 150+ transactions and sold almost $10K worth of cards..

I have already sold $1400 this year alone, so I am being extremely cautious this year given the current economy and the way that states are looking at raising revenue to offset their deficits..

Contact EBAY and see if anything has changed this year..

I might have to get our business license again.. (I stopped renewing it a couple of years ago as my wife's disability kicked in and she wasn't able to do anything anymore)

Good luck and keep everyone updated..

Kevin

MisterT · Jan 11, 2012

Pinbreaker said:
The EBAY tax issue might change for 2012.. I have heard that EBAY is going to send out tax info for your sales to the IRS..

Last year I did 150+ transactions and sold almost $10K worth of cards..

I have already sold $1400 this year alone, so I am being extremely cautious this year given the current economy and the way that states are looking at raising revenue to offset their deficits..

Contact EBAY and see if anything has changed this year..

I might have to get our business license again.. (I stopped renewing it a couple of years ago as my wife's disability kicked in and she wasn't able to do anything anymore)

Good luck and keep everyone updated..

Kevin

While you are certainly right that things may be changing, and states are looking for $ anywhere they can find it, I believe that this a Federal issue. Congress passed a sales tax exemption for internet sales several years ago and this (contentiously) gets renewed each time it comes up. Local brick and mortar store argue that it is unfair competition (no tax = lower cost to the buyer), but because it crosses state lines (if the seller does not have a presence in the state of the buyer) it is under federal control. Regardless, you are also right that contacting eBay is a great idea and that updating us on here will be very useful.

pgwtamu · Jan 11, 2012

I too am in Texas and has paid sales tax once before, but it was a brick and mortar shop, and the auction said Texas residents will be subject to sales tax. I'm sure the guy thinks he is doing right, or he is trying to be clever and bleed that card for every penny

AMAZIN HOF COLLECTOR · Jan 11, 2012

This was already discussed in a thread a year ago or so....

The seller sent the tax number to the buyer. If a seller has a license (like a wholesaler) it covers others states and therefore he has to collect tax even though he doe not live or have a shop in that state. I did not believe it myself until I read the old thread. I remember looking at the item description and it cleary stated he charges sales tax to out of state buyers due to his license....

Anyone else remember the post?

OP have a link to the auction?

cmnkb8 · Jan 11, 2012

AMAZIN HOF COLLECTOR said:
This was already discussed in a thread a year ago or so....

The seller sent the tax number to the buyer. If a seller has a license (like a wholesaler) it covers others states and therefore he has to collect tax even though he doe not live or have a shop in that state. I did not believe it myself until I read the old thread. I remember looking at the item description and it cleary stated he charges sales tax to out of state buyers due to his license....

Anyone else remember the post?

OP have a link to the auction?

viewtopic.php?f=2&t=136265&hilit=sales+tax

Not sure if you're talking about that thread?

The seller in that thread apparently DID clearly state in his description he has reseller permits in MOST states, except for a few. It was not a blanket wholesaler permit to collect tax in all states.

AMAZIN HOF COLLECTOR · Jan 11, 2012

cmnkb8 said:
AMAZIN HOF COLLECTOR said:

This was already discussed in a thread a year ago or so....

The seller sent the tax number to the buyer. If a seller has a license (like a wholesaler) it covers others states and therefore he has to collect tax even though he doe not live or have a shop in that state. I did not believe it myself until I read the old thread. I remember looking at the item description and it cleary stated he charges sales tax to out of state buyers due to his license....

Anyone else remember the post?

OP have a link to the auction?

Click to expand...

http://www.freedomcardboard.com/forum/v ... =sales+tax

Not sure if you're talking about that thread?

The seller in that thread apparently DID clearly state in his description he has reseller permits in MOST states, except for a few. It was not a blanket wholesaler permit to collect tax in all states.

Great work detective! Yes, that was the thread.

ebechols · Jan 11, 2012

I became suspicious immediately upon seeing that the sales tax rate was 10%, since 10% isn't the legal state sales tax rate. The sales tax rate that you pay when shopping at brick and mortar shops consists of at least two component rates. The state sales tax rate and the local municipal tax rate. The state tax rate for Texas is 6.25%, which for out of state purchases you are responsible to report on your state income taxes or if you are in a state with no income tax you are to report it using a sales an use tax form. Texas allows municipalities to collect up to 2% for a total maximum combined rate of 8.25%, so the seller is definitely trying to hike his profit margin, and I would report him if he doesn't rescind the 10% sales tax. If you want to double check my numbers you can go to http://www.window.state.tx.us/taxinfo/sales/faq_collect.html#collect6 and read this for yourself.

The rules in Texas on buying of the internet and the form used to pay use tax can be found at http://www.window.state.tx.us/taxinfo/taxforms/01-156.pdf

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