Ebay taxing coin sales in Illinois

Discussion in 'Coin Chat' started by Hiddendragon, May 24, 2022.

  1. Hiddendragon

    Hiddendragon World coin collector

    I live in Illinois and sell some coins on eBay. I noticed recently that eBay is charging sales tax to buyers in Illinois. Illinois does not tax coin sales and this used to be correct in eBay. I don't know when this changed but I think it was recent. I was just at my LCS last week and I was not charged sales tax there. Does anyone know if there was a change to state law or what is happening here? It's also not the usual rate. A sale of $2 plus $1 shipping had a total of $3.10. Just trying to figure out what's happening.
    ominus1, MIGuy and AdamL like this.
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  3. MIGuy

    MIGuy Well-Known Member

    Ebay does the same thing in a number of states, including mine, where they aren't supposed to. It is completely worthwhile to call them and seek a refund of those charges. You will need to make a list of the item numbers and give those to the customer service agent you get. Let them know the state you are in and the state law that exempts coin sales or rare coins (or however IL puts it) from state sales tax. I had so many item numbers for a couple of years the first time I addressed this that they just referred it up the line and eventually I got a nice refund of all those years transactions. What bothers me is it doesn't stop, I still have to call in to get the refund. But hey, at least we can get the money back.
    ominus1, Hiddendragon and kazuma78 like this.
  4. Hommer

    Hommer Curator of Semi Precious Coinage Supporter

    They do the same when I buy a coin from them which is exempt from sales tax in my state. I have to ask for a refund. I bought a bill at auction earlier this week and they charged an extra 90 cents that I have yet to figure out the reason. When I try and get details of the transaction, it kicks me out and I have to log back in, but when I do, it takes me to another page.
    Hiddendragon likes this.
  5. atcarroll

    atcarroll Well-Known Member

    I have noticed they are applying sales tax to the shipping, not sure when that started but it caught my attention recently. The tax is 6% of the shipping cost, that's Michigan's rate.
    Last edited: May 24, 2022
    Hiddendragon likes this.
  6. justafarmer

    justafarmer Senior Member

    Perhaps delivery of goods is a service specifically taxed in Michigan and IL. In my state delivery charges are considered part of the sales transaction proceeds. Therefore would be taxed at the same rate as the item being shipped/delivered. In this case the shipping charges would also be exempt because the item being shipped is exempt.
  7. atcarroll

    atcarroll Well-Known Member

    I don't know for sure if it's supposed to be taxed, i just know they're doing it. Maybe it's just a money grab, maybe it's an honest mistake, idk.
  8. justafarmer

    justafarmer Senior Member

    I am fairly certain it is not a money grab. Any money collected from a customer described as a sales tax must be remitted to the State whether the money collected was a proper tax or not.
  9. medoraman

    medoraman Supporter! Supporter

    They are more afraid of erring on the side of not taxing something and having the states go after them than upsetting a few individual buyers. That is the main reason. I doubt Ebay keeps any of the money, they simply do not want the risk they might have to pay if they don't collect, which they view as a higher risk than you being upset, so they program it conservatively.
    BadThad, ominus1 and Hiddendragon like this.
  10. justafarmer

    justafarmer Senior Member

    If memory serves me correct, there were several states that amended their sales tax code during the pandemic to expand their taxable service to include delivery services. Mostly an effort to capture Doordash, Grubhub, Uber Eats and etc.
  11. medoraman

    medoraman Supporter! Supporter

    Sure, but I am just commenting on how companies perceive this issue. If I do not collect the sales tax from the consumer I owe it, whereas if I collect it and remit to the state most consumers do not notice and I have zero risk of paying the tax in the future. So, most companies frankly overcharge sales tax, since they only really have the risk of the state auditing them and assessing tax on one side, and almost zero risk they will have anything negative from overcharging taxes. I have seen the state audits, the state might acknowledge you did not need to charge sales tax for X, but they never make any attempt to refund it back to consumers, and do not assess fees on the company for doing so. They are fat and happy. It is always up to the consumer to fight to minimize sales taxes unfortunately, the state and companies have every incentive to not minimize them for you.
  12. justafarmer

    justafarmer Senior Member

    The two examples presented in previous posts, one from Michigan and the other from Illinois, exempted the coin from tax and only charged tax on the shipping.
  13. Hiddendragon

    Hiddendragon World coin collector

    This is an interesting observation. It does seem like the tax might be on shipping. eBay has historically treated shipping charges the same as the item price when it comes to fees to try to encourage free shipping.
  14. Hiddendragon

    Hiddendragon World coin collector

    This sounds like eBay. It's the same reason that they ban selling coins from Cuba even if they are made in the U.S. Easier just to ban them all and not have to worry about it.
  15. dltsrq

    dltsrq Grumpy Old Man

    Whether shipping is taxable will vary state to state. I think eBay is doing the best they can with the sales tax mandate and are working to do better.

    In a cup-half-full sense, I no longer have to collect and remit sales tax for my own state, Florida, where each of 67 counties has its own sales tax rate (and yes, shipping is taxable).

    In addition, some types of coins are taxed in Florida, others not. Even that isn't all. Invoices above a certain dollar amount for certain classes are not taxed.

    Multiply this madness times 50 for eBay, just for the USA, and you begin to get a sense of the problem.
    Last edited: May 24, 2022
  16. medoraman

    medoraman Supporter! Supporter

    Oh, no doubt. I commiserate with Ebay. Its a freaking mess, sales tax in the US both in terms of every single state having myriad different rules and interpretations of said rules, but sales tax districts being so myriad. I have no problem with sales and use taxes, but the states should be required to establish more formal, uniform rules if you are going to make nationwide sellers enforce them. That is the problem with overturning Quill.
    -jeffB and dltsrq like this.
  17. ddddd

    ddddd Member

    I ran into this too. There was no notice anywhere on eBay but they are taxing the shipping. The last time I read the law in Illinois, shipping is taxable (seemingly even if the item is tax exempt).
    Hiddendragon likes this.
  18. justafarmer

    justafarmer Senior Member

    And the SSUTA only plays lip service in solving the problem.
  19. Vertigo

    Vertigo Did someone say bust?

    I live in NH and I don't pay sales tax on anything ever unless I am in a neighboring state for a reason. Nothing on ebay. Nothing in the stores except food cooked in restaurants etc. It's pretty nice. I want to move to Maine but I'm not paying sales tax on ebay lol.
  20. Conder101

    Conder101 Numismatist

    Actually they probably do keep a small amount. Here in Indiana the merchant collecting a remitting the tax is allowed to keep a percentage to compensate them. I would not be surprised if other states have a similar set up. In which case ebay gets to keep a percentage of all the sales tax they collect.
  21. onecenter

    onecenter Member

    I have noticed the same in Georgia, sales tax is now being charged on shipping and postage costs where coin purchases are sales tax exempt.
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