EBay Sales Tax????

[Bob Salomon]

I don't think B&H is doing anything shady. Here in Calif there are several chain stores who advertise "we pay the sales tax" for a particular promotion or sales events. All it means is that they are offsetting the tax with an equal discount, so that the bottom line total you pay at the register comes out as if there weren't a sales tax, but they still have to remit the same percentage of the total to the State. It's nothing more than a marketing trick, but perfectly legal as long as the State gets its due percentage cut per specific city or county. In the case of B&H, it means significantly cutting into their own profit margin to be able to do that, which in turn means they have to raise profits somewhere else to stay in business. It has nothing to do with credit card laws. Dealers in states which collect sales tax have an inherent disadvantage going up against other states which refuse to do so per shipments. There has been a long-running feud between CA and NY in this respect. Calif was able to enforce it for the past decade or so only if a particular company like Amazon actually had a branch office or distribution facility in this State. But the overall clamor spilled over that temporary dam of a compromise, which was mandated by the Supreme Court, and led to a firmer resolution a couple years ago, in which NY and other non-collectors lost. In the meantime, it must have been a nightmare collecting the thousands of different tax rates relative to a myriad of Zip codes, which are constantly changing anyway. That logistical hurdle was the primary reason the Court delayed for so long setting their foot down.

CA & NY were a much later feud. CT and NJ vs NY was a much longer feud as commuters and visitors to NYC would buy things from camera stores, jewelers, clothing stores, etc. and either take the goods with them and have the receipt marked shipped to an out of state address or would take the camera, watch, handbag, etc and have an empty box shipped to the out of state address thus avoiding sales tax.

Eventually a few companies, including Tiffany were sued for this practice and were heavily fined.

[BrianShaw]

All that to avoid a few dollars of tax????????

[Bob Salomon]

All that to avoid a few dollars of tax????????

In many cases it was more then a few dollars, especially for commuters who were in NYC 5 days a week and had spendable income. Those purchases would add up!

[Tin Can]

Paypoo is a credit card. With 30% interest.

They hope you take the bait.

Yes if you pay off in 25 days. it's done.

Tax here is 10%

[neil poulsen]

As for this transaction, adding the sales tax took both the buyer and I completely by surprise. As a result, we've mutually agreed to cancel the sale.

I can't help but think that we've all been hoodwinked by this. But, I need to think about it for a while.

[koh303]

The Supreme Court decided a couple of years ago that sales tax is charged based on the buyer’s location, not the seller’s. That works for big sellers like Amazon, but not well at all for small sellers. I think it should be the other way around but have been unable to get any interest from politician.

That was only one year ago (less actually).

For those who sell on Ebay, like the OP, but cannot be bothered to read the annual and casual announcements they make, things might catch you by surprise. Using google can help but i understand not everyone has access to this wonder. So let me google this for you:

In the grand scheme of things - the Supreme court passed what was called the "amazon" law, that means that in order to level the playing field, online retailers would need to collect sales tax from their buyers respective state. The immediate problem that arose is that this is doable for companies with a battery of CPA's and lawyers who know and can file the different required paperwork for each county, city or state in the US where the tax is being collected on behalf of, but for a small business, or private person the burden is unmanagable.
As a result, a threshold was set (something like 1M$USD of business, annually, between a seller and any specific state/county/city) above which, they are expected to collect and remit sales tax in every out of state transaction.
The law however has only been adopted by handful of states at the moment due to the extreme complexity, and the fact that really big companies (IE the government), have not yet figured it all out, and still need some adjusting time.
For those states that have rolled out the laws, most "large" retailers (who do not already have a physical presence in that state, which would have required them to collect sales tax anyways), have started to comply with these laws (which vary widely from state to state), if they pass the "nexus" threshold.
In Ebay's case - any transaction where the buyer is located in one of the states that already has rolled out their amazon law, will be charged sales tax, automatically, by Ebay. Ebay will then make the sales tax filing on the behalf of the transaction to the respective buyers state/locale. As the OP must have noticed, the sales tax was grayed out in the invoicing/payment pages - this is because it is not paid into the sellers account, not can he modify it. It is directly collected by Ebay, and disbursed by Ebay, neither the seller or the buyers need to do anything, nor do they need to be concerned about this.
Is anyone being hoodwinked by being compelled to pay a tax they should have always been paying, but was not enforceable in the age of cash and hand written invoice (and so no one actually paid), but which is enforceable in the age of information?

[BrianShaw]

As for this transaction, adding the sales tax took both the buyer and I completely by surprise. As a result, we've mutually agreed to cancel the sale.

I can't help but think that we've all been hoodwinked by this. But, I need to think about it for a while.

All that because of a few dollars of tax????????

[pendennis]

That was only one year ago (less actually)...

There are approximately 10,000 separate sales/use tax collecting jurisdictions in the U.S. Further complicating things are the various items which are/aren't taxable among jurisdictions. For instance, in some jurisdictions labor is taxable, as are periodical publications, and software. If you have a something repaired, parts are generally taxable, but if Moe's doesn't break out parts for your repair, how do you know if you owe taxes if you live in Monkey Bend.

Some states, as koh303 states have set a minimum for retailer collection. However, that doesn't relieve the buyer of remitting the use or sales tax to their unit of government. States still rely on voluntary remittance of those taxes. The number that was thrown around last year was around $250 million in additional sales/use tax revenue. For states with the resources to chase this boon, it's well worth the effort.

There are companies out there who are, or already have, created their own version of "Amazon" sales tax collection. The matrix isn't that difficult. However, the exceptions are an entirely different beast.

[DonJ]

That was only one year ago (less actually).

Taxation based on the buyer's location has been the rule for years. The recent SC decision overruled the "physical presence" rule, which made Internet purchases tax-exempt unless the seller had a physical presence in the buyer's state. The ruling also allows the states to require "marketplace facilitators" such as eBay to handle state taxation on any state that elects to take advantage of the ruling, shifting the burden of "policing" millions of sellers across the country to the venues where they sell.

[Drew Wiley]

Here in CA some people would drive to Oregon to buy things tax free; but unless you were vacationing there anyway, the distance between significant cities simply wouldn't justify the gas expense. Big purchases like cars and boats have to be Calif. compliant anyway, so never did factor in. I'd imagine that by now dealers can just subscribe to an internet service which does the heavy lifting for you, and has all the current tax rates at a click. Hypothetically, if I even walked more than three blocks north, east, or south from my house and hand-delivered a print to someone, I'd be in a different municipality with a different tax rate and have to look that up. I can't even keep up with the frequent changes in my own city. The State sends out an updated list, it eventually gets lost somewhere in a pile of paperwork, but I really don't care. I just Google the Zip Code or city and Sales Tax Rate and there it is. It's no big deal for an occasional seller like me. But for the large company I worked at before I retired, we simply opted out of internet sales. Wasn't worth the hassle and overhead. Keeping up with shipments to Govt agencies, far flung military contractors, and even locally exempt agencies was hell. Eventually we gave up on most of that too because it required a dedicated staff; and lots of Govt branches pay late or sloppy, not to mention all the shell-game graft at city levels where funds simply disappear from dedicated funds, then mysteriously reappear several months later, and in the meantime, some secretary has a new Lexus. Glad I'm retired from that rat race.