posted on March 19, 2001 03:11:35 PM new
I was recently contacted by a seller who I've bought several hundred dollars worth of items from over the last 6 months. This person lives in the same state as me, but, as is often the case, did not mention or charge any sales tax.
Now, out of the blue, they've e-mailed me that they are preparing their tax return and were under the impression I was a dealer and now they need my resell number or certificate...or something like that!
What?!
I occasionally resell duplicates of the item I collect, but I am a collector---not a dealer. Why does this person suddenly think I'm a dealer? I'm not even sure they know I sometimes resell items. I have never resold anything I bought from them.
Could it be, that they (who are new to Ebay) didn't realize they were to collect sales tax and are e-mailing me this BS about "I thoought you were a dealer" as an opening line to finally say "Hey, we want to collect the sales tax we should've collected months ago!"
posted on March 19, 2001 03:16:14 PM new
It was the responsibility of the seller to collect the sales tax on your purchases. However, the buyer also has a responsibility to see to it that sales tax is paid on all items purchased in state.
The correct way to handle this situation is to forward that tax owed to the seller and call it a day. Your responsibility as a buyer will then be satisified and you can go about your life knowing your a good citizen.
posted on March 19, 2001 03:17:57 PM new
I'd tell them they should have thought about that when they sent the original end of auction email with the total cost of the goods. Ya snooze, ya loose.
posted on March 19, 2001 03:20:19 PM newHowever, the buyer also has a responsibility to see to it that sales tax is paid on all items purchased in state
Um, sorry, I strongly disagree.
There are many sellers who simply eat the taxes at their end, in order to encourage local bidders. I have never charged Federal Tax on my Canadian sales. I pay it to the Govt, but it's taken out of my pocket, not the high bidders.
posted on March 19, 2001 03:23:48 PM new
In certain states, Buyers are ultimately responsible for paying sales tax. However, unless you are business, highly unlikely you will be subject to a sales tax audit. Only problem may be if the seller gets audited and reports to the authorities that you have a resale number. Then you may have a problem.
posted on March 19, 2001 03:23:55 PM new
The time for them to have asked for your resale number is before they sold you the items.
In my opinion, you don't owe them anything. If they're asking you at this time to supply your resale number or pay the sales tax, they are indeed unprofessional.
Even if you had considered the sales tax aspect when buying items from this in-state seller, it would be reasonable for you to assume either 1) that they are also not professional dealers, but are collectors thinning out their collection of duplicates (like someone having a garage sale, who does not pay sales tax); or 2) that even though it was not itemized on your EOA statements from them, that they planned to pay the sales tax themselves from the profits they made on selling you the items.
[ edited by triplesnack on Mar 19, 2001 03:25 PM ]
posted on March 19, 2001 03:55:42 PM new
Look up the sales tax laws of your state (they're very likely found online - do a search for your state revenue department), see what it says about a purchaser's responsibility for remitting sales tax on purchases made via catalogue or the internet.
If the seller is in the same state as you HE is responsible for paying the sales tax. He can either collect it from you AT THE TIME OF THE SALE or pay it himself. Unless you told him each item was for resale.
posted on March 19, 2001 07:48:32 PM new
Bottom line -- do you want to continue a business relationship with this seller?
Perhaps they were under the impression (as a LOT of people are) that no sales tax is due on ANY internet transaction -- and they're just now learning they were wrong.
Maybe they're new to the sales biz altogether and are not quite sure how to handle this.
Have you looked over your past e-mails with this seller? Is it possible you said something that led him/her to mistakenly believe you're a dealer?
IF this is a source of goods you'd like to continue to work with, pull their contact info and give them a call. See what's up & what you two can work out.
IF you don't care if you ever do business with them again, blow them off.
Ultimately, they will have to pay it. But you've gotta live with it. Do what feels right to you.
posted on March 19, 2001 07:52:22 PM newHowever, the buyer also has a responsibility to see to it that sales tax is paid on all items purchased in state
Not in any state I've ever checked into.
Seller is legally responsible to pay the sales tax, whether or not it was collected from buyer.
The presumption is, when seller does not ask for the tax, that seller is not paying the tax. Like at a garage sale. Illegal on behalf of seller, but very common.
In the case at hand, buyer may have some moral responsibility, but almost certainly has no legal responsibility to pay the tax (presuming that the assumption of resale was groundless).
posted on March 19, 2001 09:02:42 PM newAt no point did I make ANY reference to resale. As a matter of fact, the items I bought from this seller WERE NOT resold. I only sell duplicates of what I have already. The items I bought from this seller are the only ones of a kind that I have, therefore are not going to be resold.
Also, this seller told me before the last set of auctions I won, that these items were the last of the lot---so it is very unlikely I will ever be dealing with them again.
This is what's going through my head:
Our exchanges have always been pleasant, but they were always extremely tight with a buck and not very forgiving when it came to recompense for unmentioned flaws in some items I bought---this in spite of getting many times more for certain of these items than they ever expected (5-10 times more). I don't hold their good luck against them, but don't penny-pinch with me after you've had a cash bonanza due to some hot items you happened upon.
Also, after mistakenly sending me an incorrect item, they had me send the item back and barely gave me enough money to pay for the postage, no less packaging. This, again, in the face of hundreds of dollars spent with them by me. I was a good customer (up until now, I guess).
Not true in the State of Florida. Buyers have to prove sales tax was collected by the vendor.
Auditors went around to business auditing purchase invoices. In situations where there was NOT a seperate line breaking out the sales tax, the business has to prove that sales tax was collected and submitted by the vendor. Otherwise, the business have to pay an imputed sales tax.
Also, on any mail order purchases, the business are require to submit the sales tax if the mail order company did not collect it.
Mail order companies are only require to collect on behalf of the state when they have physical presence in the state.
In Florida, it is the responsibility of buyers to remit the sales tax in cases where the vendor does not request it. Such as in the above situation if the buyer happens to reside in a state with similar laws.
posted on March 19, 2001 11:06:30 PM newAuditors went around to business auditing purchase invoices.
Businesses with a resale certificate are a whole different story, and indeed are responsible for paying sales tax if it was not collected by seller.
I don't doubt that some state somewhere has a law which makes it illegal to "evade" sales tax as a local buyer. Mine does not, and none of the few I've looked into do. In my state, it's permitted for stores to have "no sales tax" days, where the store does not collect the tax, but does pay it.
Out-of-state mail order is again different, and most if not all states do require buyer to pay a sales tax equivalent on such purchases.
posted on March 19, 2001 11:08:01 PM new
I would tell the seller to take the sales tax out of what you paid him. He should have thought of sales tax when you paid the first time.
-Trey
***********************************
"If your mind can concieve it, and you believe it, then you probably can achieve it."
posted on March 19, 2001 11:28:34 PM new
In Wyoming (the least populated state in the world)It is against the law for a buyer to pick up the sales tax by either promotion, incentive or any other means to make a sale.
If a person buys an item in the state they live in, then they are responsible for paying sales tax.
If the person selling the item does not include the sales tax in the final price of the item then THEY are in violation and are responsible for the sales tax.
posted on March 20, 2001 12:49:31 AM new
You can take advice from this board, but if you are dealing with taxes, I strongly advise to get professional tax help or contact the Board of Equalization in your state regarding sales and use tax.
It sounds like the seller has been caught by the BOE for not collecting sales tax, and that they are trying to avoid paying it, or worse, they knowingly didn't collect it and marked on forms that they sold it to people with sellers permits. In most states, this If they lied to the BOE, this constitues fraud, and the BOE can choose to leavy heavy fines and/or bring criminal charges against the seller.
I agree with you that it sounds like the seller just found out that they should have been collecting sales tax and are trying to get around it by putting the blame on you.
I will give you an example of what the Board of Equalization says in the state of California:
People running online auctions through ebay must have a seller's permit and must collect sales tax. It doesn't matter if you sell as a hobby or full time. I will tell you that many many sellers in California on ebay don't collect sales tax for whatever reason.
Use tax is when a person buys a product from another state and didn't pay sales tax. That person is supposed to report the item and pay a use tax.
The Board of Equalization states, "The buyer of the item is responsible for paying the use tax."
There are only two states in the US that I know of that do not charge a sales and use tax. One is Oregon and the other is Nevada.
I am not sure where the responsibility lies in sales tax, but if the same reasoning applies, a person has a responsibility to pay sales tax.
California raised the taxes for ciggeretts (sorry about the spelling) Smokers went online and bought them out of state, thinking they were saving money. Most of them didn't realize that sellers of cigs are required to report all outside sales to the government, so that use tax can be collected in the states.
It was big news when the State of Ca. notified buyers of owed taxes. In some cases a couple of people owed something like a thousand or two.
If this person is in trouble with the BOE, I don't know if they are required to turn over sales documents to the BOE.
Personally, if this happened to me, I would be inclined to tell the seller to blow it out his ear since he didn't collect at time of sale.
Before I did that, I would call or write to the BOE to find out my resonsibility. The last thing I need is a tax audit.
Remember that you are dealing with tax laws, and the courts that deal with tax laws are not the same courts as our judicial system. It is tax court. If the IRS comes knocking at your door, they can garnish your wages, take away your money in your bank accounts, even take away your possessions (again spelling) without due process.
People can posts messages saying they disagree with this until they are blue in the face, but it doesn't change the facts at all.
Let us know what happens.
Kelly
[ edited by kellyb1 on Mar 20, 2001 12:50 AM ]
posted on March 20, 2001 01:22:50 AM new
"For you to tell people the IRS is coming after them is ludicrous and an insult to common sense."
I didn't say that the IRS was coming after the buyer, my point was that tax laws are not decided in judicial courts but tax courts.
As for the IRS not giving a spit about use tax, this may be true for Income tax. The Board of Equalization does care, and as smokers found out in California, they did come knocking at their doors.
And about the insult to common sense Puddy, didn't you tell the bidder not to pay, that they had no responsibility? Could I see what BOE document that came from? What I stated came directly from the BOE of California. You may think you are correct, but in a tax court, your common sense will get you nothing but laughs.
posted on March 20, 2001 06:39:37 AM new
I can give you a few examples that might help you reach a conclusion.
A very large electronics store in NY had a mail order business. One day they were audited by the sales tax department. Customers in New Jersey were all contacted and requested to pay sales tax plus penalties. The customers tried to sue the store claiming that it was the store's responsibility to pay it or the store's responsibility to inform them that they owed it. The ruling was that it was the customer's responsibility to pay it and ignorance of the law was no excuse.
Many New Yorkers shopped in New Jersey when NJ first had tax free clothing and NY did not. NY send tax investigators to NJ to record the license plates of NY shoppers. They then sent bills to the NY shoppers asking for sales tax. Since the bills were not for a specific amount because the investigators had no idea what was purchased, no one had to pay anything. However, customers were told that the investigators would be checking the stores and if they found records of specific purchases, the customers would have to pay sales tax plus penalties. I don't think it ever went that far.
What I understood from these is that it is the store's obligation to collect the sales tax for sales made in their area. However, it is the customer's obligation to pay their local sales tax on outside sales. So if this seller gets audited, he may be fined for failure to collect but it is also possible that the customer may be fined for failure to pay.
posted on March 20, 2001 07:30:51 AM new
"What I understood from these is that it is the store's obligation to collect the sales tax for sales made in their area. However, it is the customer's obligation to pay their local sales tax on outside sales. So if this seller gets audited, he may be fined for failure to collect but it is also possible that the customer may be fined for failure to pay."
I live in Vancouver Washington which is just across the river from Portland Oregon. Oregon has no sales tax. It is not unusual for many Washingtonians to cross the river to shop. Unless they have the items delivered to their homes in Washington they are not charged sales tax. The buyers are supposed to come home and then pay WA sales tax on items they buy in Oregon but I have NEVER heard of anyone doing that. Here in Vancouver we have MANY businesses that do not ask buyers to pay sales tax. They say that they will pay it themselves. This is their way of keeping some of the business on this side of the border.
If the seller on Ebay does not ask me to pay sales tax I do not volunteer to pay extra. If a store here in Vancouver came to me 6 months after I bought a stereo from them and said they "forgot" to collect sales tax I would not pay it. I would pretty much say bummer, they were on their own on that one. However, now that you brought up this discussion I am going to contact the WA state tax people and find out what buyers (not dealers) responsibilities are in this state in a case like this. I suggest you do the same in your case. While I still won't pay the sales tax from months ago it will help me know what and how to bid in the future.
posted on March 20, 2001 10:07:01 AM newIf a person buys an item in the state they live in, then they are responsible for paying sales tax.
If the person selling the item does not include the sales tax in the final price of the item then THEY are in violation and are responsible for the sales tax.
Now wasn't that easy.
The two statements are not only contradictory
with respect to each other (at least one is logically false), but in my state, they are both false.
posted on March 20, 2001 10:31:23 AM newI am not sure where the responsibility lies in sales tax, but if the same reasoning applies, a person has a responsibility to pay sales tax.
California is one of the states which I understand. Their laws are posted online, along with many interpretations.
posted on March 20, 2001 10:51:36 AM new
I believe may of you did not understand my message. The term "responsibility" was used and is obviously being interpreted in a number of ways. Perhaps we should all stop thinking like lawyers (there are already too many of them) and start thinking about basic morality. This buyer does have a responsibility to cover the tax. A moral responsibility....
I was brought up to always do the right thing. The proper way to handle this situation is to understand how this problem occured (seller was misinformed) and to properly correct.
People need to start taking responsibility for their actions and to stop hiding behind technicalities so they donot have to do what is right and fair. Let's leave this behavior to the lawyers....
Do unto others as you would like done to yourself.
posted on March 20, 2001 11:11:13 AM newDo unto others as you would like done to yourself.
Oh really?
Well, I wouldn't have the balls to go back to a buyer many months later and say "Ooops, you have to pay me $XX in sales tax. Sorry!"
I would eat it.
My fault, MY problem.
If the seller needs to be such a tight a%s and report every last sale, noting even WHAT STATE the buyer lived in----then I'd say: "Chalk it up to a lesson learned."
posted on March 20, 2001 11:37:36 AM new
lotzamags I too would eat it if I was the seller.
Rancher, thanks for the link! It states clearly that sales tax is the responsibility of the seller, and that a seller may pass the cost along to the customer as long as it was agreed upon at the time of sale.
posted on March 20, 2001 02:59:55 PM new
Either the seller must disclose the sales tax in the auction listing or they cannot collect. Also most states now make the buyer responsible for paying taxes if none were collected. It is on a few state's income tax returns. But the seller cannot come back to you and request the sales tax because they have not right to do so. For example, if you went to the hardware store and they forgot to charge you sales tax (assume they don't use computers which would do it automatically), they can't call you 3 months later and ask for a few dollars in tax. My guess is that they were being audited by their state and they lacked cash so they were making a last ditch effort to raise funds.
