Ebay and sales tax?

[outatime]

Hi Guys

Sorry I am not sure if there is a thread already but I recently started selling my Lego on ebay and I am charging people sales tax on new sets.   Looking at other sellers they don't seem to be charging sales tax on sales , is there an option to turn it off?  I don't quite understand if I need to charge for it? I would have paid it when I bought it do I need to charge when I sell it?     

Thank you

Stu

 

 

 

[gmpirate]

Ebay is charging the sales tax for the states that require it.

[zads]

26 minutes ago, outatime said:

 

 

I would have paid it when I bought it do I need to charge when I sell it?     

 

 

 

 

 

 

Welcome to the world of double taxation

[TheBrickClique]

15 minutes ago, zads said:

Welcome to the world of double taxation

This.

it used to be that you could still “charge” sales tax for in-state sales and write what you would have collected off against the sales tax paid for the sets since you likely would have paid more sales tax when you bought the sets than the in-state sales tax even after the — hopeful — rise in value. This was allowed because you had “purchased items and paid sales tax with intent for resale”. 
You couldn’t get money back if you paid more than necessary, but at least your buyers didn’t have to pay sales tax again. 
By this accounting, I never had a year where I owed additional sales tax and my state received all the sales tax they were entitled to. 
eBay was put into a legal position where their hands were tied. They pretty much had to collect and remit sales tax on everything to avoid a huge legal headache from every possible tax jurisdiction that wanted a bigger piece of the pie. It didn’t help that Amazon and the other big chains were for reducing competition and making independent sellers seem like tax evaders because they didn’t “charge” sales tax. So, basically a win-win for states. 
The only way to avoid it is to apply for reseller status to stores you purchase from to avoid sales tax. But, since those same stores are cracking down on “resellers”, you are basically writing them a “please ban me” letter. 
So, ya, if you plan to resell LEGO, be ready to accept double taxation, and work it in to you numbers. 

[minicoopers11]

Bricklink is also now charging sales tax for the states that require it.

[Phil B]

This.
it used to be that you could still “charge” sales tax for in-state sales and write what you would have collected off against the sales tax paid for the sets since you likely would have paid more sales tax when you bought the sets than the in-state sales tax even after the — hopeful — rise in value. This was allowed because you had “purchased items and paid sales tax with intent for resale”. 
You couldn’t get money back if you paid more than necessary, but at least your buyers didn’t have to pay sales tax again. 
By this accounting, I never had a year where I owed additional sales tax and my state received all the sales tax they were entitled to. 
eBay was put into a legal position where their hands were tied. They pretty much had to collect and remit sales tax on everything to avoid a huge legal headache from every possible tax jurisdiction that wanted a bigger piece of the pie. It didn’t help that Amazon and the other big chains were for reducing competition and making independent sellers seem like tax evaders because they didn’t “charge” sales tax. So, basically a win-win for states. 
The only way to avoid it is to apply for reseller status to stores you purchase from to avoid sales tax. But, since those same stores are cracking down on “resellers”, you are basically writing them a “please ban me” letter. 
So, ya, if you plan to resell LEGO, be ready to accept double taxation, and work it in to you numbers. 

You get a little relief because you can claim the total amount you spent (including the sales tax you paid) as your COGS in your tax return, but that’s all you get unless you get tax exempt status and only buy from stores that still honor those certificates.

[outatime]

Thank you guys for the reply.  It's odd as whenever I look up other items new on eBay put in my cart there is no tax others are charging which puts me at a major disadvantage when selling as the sales tax is added on automatically for my sales no matter where I send to.

I have another account which is a little older and I list a set via the site it doesn't include sales tax on new sites so I am confused.

Thank you

Stu

 

[Jackson]

12 minutes ago, outatime said:

Thank you guys for the reply.  It's odd as whenever I look up other items new on eBay put in my cart there is no tax others are charging which puts me at a major disadvantage when selling as the sales tax is added on automatically for my sales no matter where I send to.

I have another account which is a little older and I list a set via the site it doesn't include sales tax on new sites so I am confused.

Thank you

Stu

 

What state are you in? eBay doesn't collect sales tax for every state yet.

[outatime]

Florida

[Jackson]

26 minutes ago, outatime said:

Florida

I'm pretty sure Florida is one state that eBay does not collect sales tax for yet, so anything you buy to have delivered to your Florida address won't have sales tax added on (unless the seller has specifically set the listing to charge sales tax to Florida addresses).

For most other states, eBay automatically collects sales tax.