ebay and taxes

I often read threads about the rule violations of buyers and sellers on ebay. I usually agree that poeple shouldn't cheat ebay by using their service to buy or sell items and subsequently wiggling out of paying their fair share of fees. On the other hand, I think that somone in government should close a significant loophole that gives ebay a big advantage over local businesses. If you buy things on ebay, you don't have to pay tax on the item if you live in another state. I have bought other items on-line and they often add tax to the item. It seems to me that this loop hole should be closed. It is cheating the state out of valuably needed tax revenue and making it difficult for local businesses to compete. In New York, sales tax is over 8% and you are suppose to report these purchases on your state income tax but I would guess that many people don't. I'm probably opening up a large can of worms and the only one that would want to close this loophole, but fair is fair with me. What do you guys think?

 

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The reason SOME on-line businesses charge sales tax is because those businesses have a physical presents in the that state. That is the only way they can charge sales tax.

I understand your concerns, but you need to think about how you could implement it. If the states do it, then they are regulating interstate commerce. They have been specifically banned from doing that. That leaves the federal government. Do you really think they need to stick their fingers into something else and collect more taxes from you?

BTW, this is nothing new. I used to live in Pennsylvania right near Ohio. My mother would sometimes shop in Ohio and have them deliver to our house. That way she would avoid sales tax in both states and the stores offered free delivery to drum up the out of state business. That was in the 1950's.

 

I know that it is not new. I always stop in New Hampshire to buy alcohol because it is far cheaper without the sales tax. I'm only bringing this one up because the internet has become a huge player in commerce. The fed is always looking for ways to raise revenue and this one is huge. They need to close this loophole to make things fair for businesses. If internet businesses can avoid state taxes, they have an unfair advantage. With a shrinking tax base from local businesses, states will need to raise taxes in other areas to make up the difference. Although I like the old adage "don't tax you; don't tax me; tax the man behind the tree", I'm thinking it doesn't work very well like that for long. Ok, I'm stopping, I've moved this cointalk thread to the politcal. Sorry.

 

No state taxes for almost all internet purchases outside your state

Same's true not just for eBay but pretty much all internet purchases of used goods especially form nonmerchant individuals etc.

Also true for most intenet purchases of new goods from merchants from outside your state because of an exemption granted by congress (ex. Amazon.com). This will probably change soon since Federal govt. and states are hurting for tax revenues.

Several states have declared they have the right to collect taxes on internet purchases by their residents but have found it difficult to enforce.

A few internet vendors will charge you for "state taxes" even though they don't do business in that state, but I wonder if they just pocket the payment.

 

I am glad to see the Ebay cops are still on duty here.

I prefer to deal directly with the seller and don't pay no darn tax.

 

Are you reading the same thread I am reading?

 

lol, delusional.

 

Truthfuuly, I would guess the government is more concerned about people selling tons of stuff on sites like ebay and not reporting any income. The federal and state lose out on that one. I guess time will tell as to which is enforced first!

 

Phil - in the interest of full disclosure are you a small businessman?

 

I think if it were feasible for the government to enforce taxes on sales on Ebay and like sites, it would have been done long ago. I never underestimate the IRS's ability to enforce tax collection. The fact that they don't isn't an oversight or a loophole, or it would have been closed and zeroed in on long ago. Why not enjoy the fact that there's at least one place they're not squeezing every last dime from our pockets?
Guy~

 

Phil,

I would think that living in a state like NY you would have had your fill of tax's. CA people seem to finally have.

How are you going to make doing business fair with that. You yourself stated that you go to another state to by your alcohol. Do you think that all states should have the same tax rate to make business "fair".

 

What about people like me who don't have to pay a sales tax because of the state I live in. In Oregon, we have a stare income tax similar to federal income tax...there is no sales tax. So, if I had to pay sales tax on items I bought online I would essentially be taxed twice on the money I used to make the purchase.

 

You mean like most of the rest of the country? I live in Oklahoma. I used to live in Pennsylvania and New York. All 3 have both a sales tax and an income tax. BTW, if you live in the right city, you can get all 5 taxes - federal income, state income and sales, and city income and sales.

 

I know many states have both a sales tax and an income tax...and I don't know the numbers for sure...but I imagine that the Oregon income tax is greater than the income taxes in states that have both.

 

I agree

Most governments derive their operating funds from (hopefully small'ish) taxes. When those are circumvented, gov't provided services are cut back. We may disagree about the way the money is used (!) but that is the usual source, so yes, these taxes do need to somehow be collected and distributed.
And it DOES hurt the local,honest, tax paying business when the 7-10% sends the sale elsewhere. Let's level the playing field.

 

Well, CA has this loophole closed. It's called the Use Tax.

So basically, if an online retailer sells you an item and doesn't collect a CA Sales Tax on the item (likely because they are of a different state and don't have to collect the tax) you as the CA resident purchaser still has to pay the state the money yourself in the form of CA Use Taxes. There's a line item near the end of the CA Income Tax form where you can report what Use Tax you owe for the year.

Of course, awareness and payment of the Use Tax by everyday CA citizens is extremely low but the CA taxing authorities have picked up their enforcement a little in the past few years, but still, its so hard for them to track and enforce.

 

Cheat e-bay!!! They have been cheating people for years!! It,s time
To turn the tables!!

 

Nope, I'm just a concerned American who worries that we spend more than we make. It seems that many of us want less taxes but more services. Although I don't like taxes and find all legitimate ways allowed by Congress to reduce them, I don't like huge deficits. On the good side, our inability to take action will push up the value of silver and gold coins when inflation hits full stride in the middle of this decade.

 

I don't like taxes but obviously we're not paying enough of them. How else do you explain record state and federal deficits? It is also obvious to me that we won't take the necessary action to reduce expenses. Have you ever heard of us trying to reduce anything like education, social security, or military spending? Ok, this thread has turned way too political.

 

NY has a similar thing on your tax return but enforcement isn't too good yet.