Ebay taxes on circulated type coin collections

[JerrySpringer]

Just realized after placing a highest bid on a Canadian coin collection ( nickels, cents, a few quarters) that Ebay will hit me up for taxes if I win the auction. I live in Maine, which means a 5.5% tax. I am posting this because this is the kiss of death for Ebay auctions to me. Hoping to win auctions for common circulated coins for face value or a bit less is not worth it. Forget about it if you live in a state that has higher sales tax. I just don't get how states can tax actual currency.

[ScrapMetal]

Don't forget the perpetual income producer of selling vehicles. I buy a new car and pay the state a sales tax. I sell it a few years later, and that buyer pays the state a sales tax. That buyer decides he doesn't like it and sells it to another person who then once again pays the state a sales tax.

I could go on about how taxes are endlessly collected on so many things and we all just take it in stride.

[Recyclersteve]

This hits people in the stock market as well. If you buy a stock in a non-retirement account and sell for a profit, you pay tax on the capital gain, which is fine. Yet if you lose money on the same stock more than once in a month the 30-day wash sale rule disallows anything more than just one loss. It gets worse. Let's say you buy 100 shares of XYZ stock and reinvest dividends. You could actually have a tiny dividend of a fraction of a share paid so that you now have 100.25 shares. You later sell the entire position at a small loss and buy again a couple weeks later. Your tax situation has just become a mess.

Because you sold 100 shares of stock and then 0.25 shares received separately on a different day at a loss, this is multiple losses on the same stock within 30 days which is against the rules. For anyone who trades actively, study up on the wash sale rule. It is a mess. I wish it was outlawed altogether. If I have 10 profits on XYZ stock in 30 days, I have to pay taxes on all the gains. Yet multiple losses on the same stock in the same timeframe are disallowed- totally unfair IMHO. I remember about 5 years or so ago (when I was still working as a broker) seeing a lady's account who was a very active trader but didn't understand the rules. She had well over 1,000 losses that were disallowed- resulting in her paying a LOT more in taxes than she should have paid. I felt really sorry for her.

I have so much in losses to carry forward from the past, but you can only take $3,000 a year. So I will likely go to my grave with losses that never get used up. Oh well... I must admit that when you look at the whole picture I actually did quite well overall and for a very long time.

[ScrapMetal]

Recyclersteve

I do not participate in the stock market but have wondered about how profits generated by a publicly held company are treated.

Every stock holder owns part of the company and receives dividends as distributions of that profit. To my understanding those dividends are taxable.

But more disturbing, isn't the company itself taxed on the profit also? If so, isn't that double taxation on the same money?

[NDFarmer]

In the state of North Dakota there is NO sales tax on coins. But when someone wins one of my auctions FeeBay is charging them sales tax. I wonder if the tax collected ever gets to North Dakota or if it just goes in FeeBay's pocket.

Since they started collecting sales tax now I not only have to back the shipping charges out of my bid but I have to deduct another 10 % for sales tax. So now the chances of winning any auctions is even less than it was.

[ScrapMetal]

In Minnesota we have sales tax but food and clothing is exempt. I wonder what "filters" ebay uses for situations like that.

[JerrySpringer]

In the state of North Dakota there is NO sales tax on coins. But when someone wins one of my auctions FeeBay is charging them sales tax. I wonder if the tax collected ever gets to North Dakota or if it just goes in FeeBay's pocket.

I believe Ebay forwards the tax to whatever state the buyer's address is in. When I worked at a retail store here in Maine, we would get NH customers buying stuff in person and they would try to get out of paying the sales tax. It was a point of a dealbreaker in some instances where they would just order online and have the item shipped to their home ( NH has no sales tax). I kind of relate. After nearly 20 years of not having sales tax added, it is now another price-point variable. I did win that auction I posted about. Next time I bid, I will have to factor in the tax for total price I am willing to bid up to.

[Dr. Cadmium]

I've mentioned it elsewhere in these forums, but if you are buying for resale through a legal business, you are not required to pay sales tax. eBay has a feature where you can submit a resale certificate to them so you are not charged taxes on your purchases. It took them several months to implement it but enough big buyers complained that they took action.

eBay is well aware that sales taxes are killing sales on their platform. If you or your customers are being charged sales tax on coins or other items that should be sales tax exempt by your state laws, let customer support know.

[natsb88]

In the state of North Dakota there is NO sales tax on coins. But when someone wins one of my auctions FeeBay is charging them sales tax. I wonder if the tax collected ever gets to North Dakota or if it just goes in FeeBay's pocket.

With Marketplace Facilitator sales tax laws, it's all based on the location of the buyer. If the buyer lives in a state that has passed a Marketplace Facilitator law, and the item is in a taxable category, eBay is required to collect sales tax from the buyer and remit it to the buyer's state. The seller's location doesn't matter.

[Cu Penny Hoarder]

This hits people in the stock market as well. If you buy a stock in a non-retirement account and sell for a profit, you pay tax on the capital gain, which is fine. Yet if you lose money on the same stock more than once in a month the 30-day wash sale rule disallows anything more than just one loss. It gets worse. Let's say you buy 100 shares of XYZ stock and reinvest dividends. You could actually have a tiny dividend of a fraction of a share paid so that you now have 100.25 shares. You later sell the entire position at a small loss and buy again a couple weeks later. Your tax situation has just become a mess.

Because you sold 100 shares of stock and then 0.25 shares received separately on a different day at a loss, this is multiple losses on the same stock within 30 days which is against the rules. For anyone who trades actively, study up on the wash sale rule. It is a mess. I wish it was outlawed altogether. If I have 10 profits on XYZ stock in 30 days, I have to pay taxes on all the gains. Yet multiple losses on the same stock in the same timeframe are disallowed- totally unfair IMHO. I remember about 5 years or so ago (when I was still working as a broker) seeing a lady's account who was a very active trader but didn't understand the rules. She had well over 1,000 losses that were disallowed- resulting in her paying a LOT more in taxes than she should have paid. I felt really sorry for her.

I have so much in losses to carry forward from the past, but you can only take $3,000 a year. So I will likely go to my grave with losses that never get used up. Oh well... I must admit that when you look at the whole picture I actually did quite well overall and for a very long time.

If someone is an active trader, forget about trading individual stocks, just trade derivatives instead (futures, options). 60/40 tax treatment compared to standard capital gains. MUCH better!

[Cu Penny Hoarder]

Also, screw Ebay! I predict that company will go the way of the Dodo bird in a few years because of the taxes.

Since state and federal government is doing their best to F you every which way you turn, you gotta make/play by your own set of rules.

Get to know your local coins store owners and develop a friendly relationship with them. Most will not charge you tax. Oh, and don't forget to flash that wad of $20-100 bills to get the best deals... E-V-E-R-Y-T-H-I-N-G is negotiable.

[NDFarmer]

In the state of North Dakota there is NO sales tax on coins. But when someone wins one of my auctions FeeBay is charging them sales tax. I wonder if the tax collected ever gets to North Dakota or if it just goes in FeeBay's pocket.

With Marketplace Facilitator sales tax laws, it's all based on the location of the buyer. If the buyer lives in a state that has passed a Marketplace Facilitator law, and the item is in a taxable category, eBay is required to collect sales tax from the buyer and remit it to the buyer's state. The seller's location doesn't matter.

O.K. then if that is the case that the sales tax is based on where the BUYER lives then why am I being charged sales tax on the coins I buy? Because in North Dakota there is NO sales tax on coins.

[Thogey]

There is no sales tax on "us currency" in AZ. I'm sure the state can define this pretty narrowly.

[natsb88]

In the state of North Dakota there is NO sales tax on coins. But when someone wins one of my auctions FeeBay is charging them sales tax. I wonder if the tax collected ever gets to North Dakota or if it just goes in FeeBay's pocket.

With Marketplace Facilitator sales tax laws, it's all based on the location of the buyer. If the buyer lives in a state that has passed a Marketplace Facilitator law, and the item is in a taxable category, eBay is required to collect sales tax from the buyer and remit it to the buyer's state. The seller's location doesn't matter.

O.K. then if that is the case that the sales tax is based on where the BUYER lives then why am I being charged sales tax on the coins I buy? Because in North Dakota there is NO sales tax on coins.

In ND there is no sales tax on legal tender coins or .999 fine gold, silver, platinum, or palladium bullion items.

Bullion below .999 purity, non-legal tender coins, copper, processed items (colorized coins, precious metal statues, etc.), copper, numismatic coins, and accessory items ARE subject to ND sales tax.

So given that many of these different items are listed within the same categories and subcategories, eBay does not have a great way to distinguish taxable coins from non-taxable coins at this time, and is probably erring on the side of covering their butts and not exempting any coins categories for ND.

They have been working to implement category specific exemptions by state, but complicated rules like ND's coin rules require better categorization/sorting of listings, and maybe something like requiring item-specific details (metal, purity, face value) to be filled in to potentially qualify for exemption.

eBay is well aware that sales are down because of these marketplace facilitator tax laws and it's in their best interest to implement as many exemptions as they can while remaining compliant, but it's going to take time. I think we are at or over 40 states now that have passed some form of remote sales tax legislation in the last couple years and they all have different exempt items. If I had to guess, I'd say eBay may prioritize implementing exemption categories according to the sales volume to each state.

eBay did implement a system for tax exempt buyers to upload documents to get tax exempt status for buying on eBay. If you have a tax license or retail certificate or something like that for your state, that might be an option.

[natsb88]

All coins and bullion are exempt from sales tax in PA. But paper money is more complicated. Any paper money that is not US legal tender is taxed on the full amount. Any amount above the face value of US legal tender is taxable. So a $20 US bill sold for $30 gets taxed on $10.

I purchased some ASEs on eBay a few weeks ago and eBay correctly exempted the coins from PA sales tax. PA was one of the earlier states to implement a Marketplace Facilitator law.

[Recyclersteve]

I imagine there might be a few aggressive investors and hedge funds out there who would short eBay stock, that is, bet on it going down. Just like people who go to gun shows to buy weapons in a less visible way, I imagine that some coin collectors might go to coin shows where tax might not be charged.

Of course, this is still a problem for those who live in remote areas.

[NDFarmer]

Bullion below .999 purity, non-legal tender coins, copper, processed items (colorized coins, precious metal statues, etc.), copper, numismatic coins, and accessory items ARE subject to ND sales tax.

I have a hard time believing this. Because anytime I have ever purchased any Morgan dollars, Walker 50 cent pieces, wheat pennies or anything else from my local coin dealer he has never charged me any sales tax. I can't believe he is paying the sales tax out of the goodness of his heart.

[justoneguy]

non-legal tender coins ARE subject to ND sales tax.

I have a hard time believing this. Because anytime I have ever purchased any Morgan dollars, Walker 50 cent pieces, wheat pennies or anything else from my local coin dealer he has never charged me any sales tax. I can't believe he is paying the sales tax out of the goodness of his heart.

You're buying"legal tender coins"

[natsb88]

Bullion below .999 purity, non-legal tender coins, copper, processed items (colorized coins, precious metal statues, etc.), copper, numismatic coins, and accessory items ARE subject to ND sales tax.

I have a hard time believing this. Because anytime I have ever purchased any Morgan dollars, Walker 50 cent pieces, wheat pennies or anything else from my local coin dealer he has never charged me any sales tax. I can't believe he is paying the sales tax out of the goodness of his heart.

Morgan dollars, Walker 50 cent pieces, and wheat pennies are all legal tender coins.

Here's the law:

57-39.2-04. Exemptions

31. Gross receipts from the sale of money, including all legal tender coins and currency,
and from the sale of precious metal bullion that has been refined to a purity of not less
than nine hundred ninety-nine parts per one thousand and is in such form or condition
that its value depends upon its precious metal content and not its form.

Link: https://www.legis.nd.gov/cencode/t57c39-2.pdf

You can Google the topic to see that the major online dealers specify <.999 bullion, non-legal tender coins, copper, colorized coins, statues, numismatic coins, etc. as being taxable in ND. I find it interesting that legal tender coins are exempt but numismatic coins are taxable, since most numismatic coins are legal tender coins. The state is probably not too concerned about wheat cents at 3x face, but wants a piece of that $5000 slabbed dollar that would melt for $13.

[InfleXion]

I don't buy off ebay anyway, too many fakes these days, and I'm not going to do tests on every coin I buy. I'd rather pay a little extra for peace of mind. I'm grateful I got my stack before Alibaba existed.

I know someone who is a state employee, and ask how exactly is it that I get taxed to pay your wages, and then your wages get taxed again? "Write your congressman"

[pennypicker]

Beginning October 1st the greedy Democrats in Sacramento decided to charge an 7.75% tax on ALL online purchases that were delivered to California. On September 28 I purchased some sterling silver forks on ebay from a seller I regularly buy from and there was no sales tax as usual; then on October 3rd I won another auction of sterling from the same seller and when I went to pay ebay charged me $26 in sales tax. I was so upset I immediately called ebay to find out what was going on and it was then that they informed me of California's new October 1st "Bend Over" law. Needless to say I no longer buy anything on ebay or any other online seller. The "buy it now" listings here are Realcent now look much more attractive to me

[JerrySpringer]

Just for the heck of it, I checked in on a few online silver dealers. Set up a purchase order and I see many of them are adding the state sales tax. Only a matter of time before the whip comes down on every single online seller outfit, small or big. Reviewing Ebay reporting rules, I see states like MA actually have sellers reported on if they have over I think $600 in Ebay sales annually. The states really want that money. I think my state of Maine is all excited that they got some windfall of online sales tax receipts for the past year. If I was serious about online business venturing, I'd move to NH where there are no wage income or sales taxes.

[Recyclersteve]

One thing that really bothers me about this taxation is when collectors sell things that they bought, say, 20 years ago for double what they paid for them. Well, when you factor inflation into the equation, they are LOSING money and still have to pay tax. That is an insult!

One solution is to keep the coins until you die so that loved ones can inherit the coins and sell right away tax free, subject to certain legal upper limits of course.

[chris6084]

Don't forget the perpetual income producer of selling vehicles. I buy a new car and pay the state a sales tax. I sell it a few years later, and that buyer pays the state a sales tax. That buyer decides he doesn't like it and sells it to another person who then once again pays the state a sales tax.

I could go on about how taxes are endlessly collected on so many things and we all just take it in stride.

If you happen to buy that car and pay sales tax in another state, then move to California within a year, they will charge you sales tax AGAIN when you register your vehicle.

[Cu Penny Hoarder]

Beginning October 1st the greedy Democrats in Sacramento decided to charge an 7.75% tax on ALL online purchases that were delivered to California. On September 28 I purchased some sterling silver forks on ebay from a seller I regularly buy from and there was no sales tax as usual; then on October 3rd I won another auction of sterling from the same seller and when I went to pay ebay charged me $26 in sales tax. I was so upset I immediately called ebay to find out what was going on and it was then that they informed me of California's new October 1st "Bend Over" law. Needless to say I no longer buy anything on ebay or any other online seller. The "buy it now" listings here are Realcent now look much more attractive to me

Everyone here needs to STOP using Ebay. Send them a message and vote with your wallet.

Glad I moved out of Commiefornia 10 years ago. I lived there 10 years. The weather was nice, but that's it. They are the most restrictive on my 2 fav things; Guns and now PMs. I don't know how conservatives who live there can tolerate that socialist sheet hole. Things in Cali will get much worse as time passes.