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Ebay Sucks...For Yet Another Reason!


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I just found this out this morning...I went shopping for a guitar part on Ebay, found what I needed, then started to do checkout.  Imagine my surprise when I found that Ebay had tacked on State Tax on my purchase!  According to the little blurb at the end of the check out page (located just before the total), it stated that Ebay was 'required' to collect State Tax on any purchases by residents of a state; in my case, Kentucky.  I don't know how or if this will vary for other US states, and because it was a small purchase it didn't amount to much (it's not nearly as bad as it is or can be in other countries, especially those who have to pay VAT [Value Added Tax] or something similar); but it's the principle of the thing, y'know?  Apparently, this started going on just this week, as I had made a similar small order last week on Ebay, and there was no tax deducted then.

I also don't know if Reverb is having to do the same thing, as I haven't ordered from them recently.  And again, the amount of tax is going to vary depending on what state the buyer is a resident of.  Apparently, sellers of items on Ebay don't have to do a thing (at least, not that I know of...yet), Ebay 'helpfully' charges the State Tax to the buyer of the item when they do check out.

Happy Fourth Of July, indeed.

Edited to add:  Does this mean that this is going to happen to online purchases everywhere, from other selling websites?  We will just have to wait and see, I guess.

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Been going on for awhile now in. New Jersey with eBay collecting taxes. Reverb so far as if two days ago did not on my last Reverb transaction or a few others that happen during the eBay tax collector system was installed.

Money, Money, Money, 💰 💰 💰, WTF!

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16 minutes ago, geowolves said:

Reverb so far as if two days ago did not on my last Reverb transaction or a few others that happen during the eBay tax collector system was installed.

Same here with Reverb. Made a purchase yesterday - no tax.

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Reverb does have a mechanism for collecting sales tax where required. The rules vary by each state and ebay's requirements may be different than Reverb's based on each company's structure and location and possible what state the item is coming from. I know the rules are complicated.

FWIW, I'm also in KY just purchased an item through Reverb coming from Alabama. No sales tax was charged.

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25 minutes ago, currypowder said:

Reverb does have a mechanism for collecting sales tax where required. The rules vary by each state and ebay's requirements may be different than Reverb's based on each company's structure and location and possible what state the item is coming from. I know the rules are complicated.

Reverb released the following this last spring to explain things.

https://reverb.com/news/what-reverb-sellers-need-to-know-about-new-sales-tax-rules

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Yes, it's a state by state thing, and a leveling of the playing field is LONG, LONG, LONG overdue.

If I'm playing the "can you match this price?" game with cheapskate tirekickers who have no appreciation for small business or buying locally, I stand to eat their tax in my sell price (more specifically, my profit margin) because I still have to remit sales tax on their behalf. At least my shop does that, because that's called running a legal, level, honorable business. We charge for the services we provide, we pay for the services we receive (like paved, policed roads to our business for our clientele) and we levy and remit taxes to pay our fair share of those services.

That means the TINY amount of profit I would have seen trying to play match the big boxes and conglomerates and MAPs and using my profit to cover their tax obligation just turned into me losing money after I pay shipping. Because the same cheapskate tirekicker is gonna want a "can you free shipping" match. Meaning I paid shipping 1x to get the item from my supplier and then 2x to get it where it needs to go. We have a thread about shipping right now that better displays how this sucks into what little profit you might realize. Imagine if I'm trying to play price match, free shipping, on a $2K item, and/or a 40-pound something. And people wonder why Mom and Pops in all retail sectors have been dying on the vine.

I've gotten into the habit in recent years of just telling people who show the first sign of tirekick fuckery to shop their best price online and bring me what you want replaced, installed, upgraded, whatever. You won't hurt my feelings, you'll actually save me headaches and potential financial losses. My time is worth more than the WEE bit of profit I MAY see. The system as it has sat and still mostly sits dictates I only make money on the repair bench anyway.

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From a message to sellers received May 21.....At Reverb - State taxes will be collected on purchases from sellers based in...

- Washington & Minnesota (Current) 

- Pennsylvania, New Jersey, Arizona, South Carolina, Connecticut, Alabama, Oklahoma, Iowa, DC, South Dakota, Wyoming (effective July 15)

 

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So, I'm just a jackass selling gear, not a storefront.  Is this sales tax going to go to my account and then I'm expected to pay it out next April?
I can see a lot of buyers having a problem with that, knowing that the money is just going to end up getting pocketed.

I'm not looking to cheat the government, but I'm also not likely to keep track of this shit all year long.

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15 minutes ago, kizanski said:

So, I'm just a jackass selling gear, not a storefront.  Is this sales tax going to go to my account and then I'm expected to pay it out next April?
I can see a lot of buyers having a problem with that, knowing that the money is just going to end up getting pocketed.

I'm not looking to cheat the government, but I'm also not likely to keep track of this shit all year long.

No. Reverb (or eBay or other) collects the money and remits to the appropriate state/agency. As a seller you get (or should get) only the amount of the sale. It is an added cost to the buyer.

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10 minutes ago, Dave Scepter said:

Yeah it does this pertain to used "already taxed" gear as well?

You pay sales tax when you buy a used guitar in a store, so I would think so.

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11 minutes ago, kizanski said:

You pay sales tax when you buy a used guitar in a store, so I would think so.

Damn, that's a lot of additional money most potential buyers aren't accounting for... another obstacle for sellers

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Just now, Dave Scepter said:

Damn, that's a lot additional money most potential buyers aren't accounting for

It will just be another variable in the bargaining process, along with shipping fees and eBay/Reverb fees.

Oh, and the cost of the boxes! lol

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41 minutes ago, kizanski said:

Is this sales tax going to go to my account and then I'm expected to pay it out next April?

From a legal standpoint, unless you're operating as a business, when you sell your used or new gear, you are not required to collect sales tax and pay your local and state revenuers. If eBay or Reverb is collecting taxes for non-business sales, they must have language in their agreement that likens their position to that of a storefront taking on consignment merchandise. I'm not certain how that works considering they never lay their hands on the merchandise. Smells of stank. 

On the other hand, if you're a business selling on eBay or Reverb, you're required to collect sales tax on sales that ship only to your own state. Some states like California have legislation enacted into law that takes effect later this year IIRC, that puts a ceiling on how much you sell into their state, at $10K or less annual sales into California,  you don't need to report or collect taxes, however if you surpass the $10K limit on CA sales, you'll be requried to register as a business selling in California and acquire a CA reseller number, and collect, report and pay taxes.

Laws like this are going to muddy the waters for many online resellers, because you won't need to only be familiar with tax code in your own state, but now you'll need to know and follow code in fifty states! What a PIA!

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31 minutes ago, kizanski said:

You pay sales tax when you buy a used guitar in a store, so I would think so.

That is because you are buying from a legally registered business that is required to collect and pay sales tax on everything it sells, new or used.

As an individual, selling personal goods, not for business, you are not required to collect and pay. You can sell brand new guitars, never played (like on TGP), and you don't have to collect sales tax because you are an individual conducting private personal sales.

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https://www.investopedia.com/terms/u/use-tax.asp

 

https://blog.taxjar.com/use-tax-definition/

 

When the seller collects and remits the tax it is SALES TAX.

When the buyer SHOULD be paying the tax to his state of residence, it is refereed to as USE TAX. 

They are effectively the same tax, just renamed depending on who is responsible for its payment.  

 

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3 hours ago, Jeff R said:

I've gotten into the habit in recent years of just telling people who show the first sign of tirekick fuckery to shop their best price online and bring me what you want replaced, installed, upgraded, whatever. You won't hurt my feelings, you'll actually save me headaches and potential financial losses. My time is worth more than the WEE bit of profit I MAY see. The system as it has sat and still mostly sits dictates I only make money on the repair bench anyway.

And yet you have to hit a minimum buy-in to maintain a product line.  The MAP pricing does not always make things fair, either. 

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5 minutes ago, Steve Haynie said:

And yet you have to hit a minimum buy-in to maintain a product line.  The MAP pricing does not always make things fair, either. 

Well MAP policies are intended to do two things, level the playing field so all dealers can’t advertise a product or line as a loss-leader, undercutting other dealer pricing, and preventing diminished market value as a result of such behavior.

Not all dealers comply, and not all manufactures enforce, or enforce equally. However, a dealer can sell MAP protected product for anything they want, they just can’t advertise below MAP.

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2 hours ago, gtrdaddy said:

From a legal standpoint, unless you're operating as a business, when you sell your used or new gear, you are not required to collect sales tax and pay your local and state revenuers.

From a legal point of view, you're supposed to report this on your income taxes. 

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Just now, jwhitcomb3 said:

From a legal point of view, you're supposed to report this on your income taxes. 

If you’re a business. If you’re selling private property you don’t. You already paid taxes presumably on the income you used to acquire it.

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1 minute ago, jwhitcomb3 said:

From a legal point of view, you're supposed to report this on your income taxes. 

I have been told that before, but never by an accountant or tax lawyer.  The subject came up when talking about collectibles that go up in value drastically.  You paid $50 for an effect pedal that now gets $250.  You are supposed to pay tax on the $200 you made 20 years later.  You bought a 1963 Strat in high school that you rarely played and now want to part with it for a fair market price.  What do you do? 

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