Hi, I need some help with selling coins. I have been selling on ebay and see an area where you can charge a tax. I have never done this, should I be charging a tax? Do you?
Depends on the amount usually. Check with the IRS to see whether or not you need to pay actual taxes on what your selling. Most of the time, I'd think if you're not an actual business selling coins, it's almost considered like a "garage sale" where the IRS is not going to consider the money made as taxable income, etc.
Actually sir I think they are referring to sales taxes. Taxability of income, (which would be an IRS thing), is different. For sales tax, you never need to charge it if the buyer does not live in your state. If they do live in yoru state, it will depend on yoru state law, as states have treated this issue differently. I offhand do not know the rules of MI regarding casual sales on the internet and what rules apply. Sorry. Contact your state department of revenue, and they should have a rulebook for you. Or you can just say I will not sell to MI residents, or risk it hoping no MI buyers bid.
Yeah, sorry, meant check with IRS on income and state as well for sales tax. Like I said, people don't charge sales tax when they run a garage sale and it's usually allowed. I think it really depends on what you are selling, how much, if you're a business or selling an item that already had sales tax applied when you bought, etc. Contacting the proper people will clarify what taxes are obligated by you as a seller of such things.
I agree sir, well said. Regarding garage sales, many states over the years specifically excluded these, but those laws do not apply to internet sales. It changes, and is different for each state, so like you said you must check your local state for the rules there.
Unless your a business you should not be charging sales tax on ebay. But with all the info. about selling on ebay been posted already you should read through ebay's rules. A little while back I believe that ebay and paypal were stating that they were going to send out tax forms for sellers who have sold a certain dollar amount in a given year.
The best advice you will get here is: if your state has a sales/use tax, contact your state taxing authority! The laws can be complicated and will vary by state. Generally, if you only occasionally sell on eBay, you might not have to collect a sales tax. If you are conducting many sales (eBay Store) you would need a retail sales license and would have to collect sales/use tax on goods shipped to addresses in your state. You would not have to collect sales/use taxes on goods shipped out of state. Individual states cannot regulate interstate commerce.
From what I recall, most states aren't going to charge or make Joe Schmo who occasionally sales items he once paid a sales tax on and is used charge sales tax. It's gonna depend on how often, how much you are selling and how much you are making. That's why garage sales are ignored, they know most people who do have one usually do it once a year, etc. Now if they found out you're having a daily garage sale, they might chime in and require you to pay sales tax because at that point, it's clearly a business.
Have you ever bought a used car? Sales tax was paid when it was new and they collect more sales tax on the resale.
Correct. Sales tax is a tax on the transaction, not the asset itself. Garage sales have been, due to public pushback, excluded in many states, but it specifically has to be in the law as an exclusion since technically it would be required to be sales taxable. Its easy to get confused, but sales tax is on the transaction, it has nothing to do with gain/loss of what you are selling. Its simply the government taxing your "right" to sell something to someone else, and they make the buyer pay it, but may require the seller to collect it.
From what I understand MI does NOT collect sales tax on coins in which case you would not have to collect taxes. This will give you a list by state and whether or not they have sales tax on coins, bullion and paper money http://thecoinologist.com/sales-tax-state-by-state-breakdown/
You better check your states tax laws for small business. I'm not sure about Michigan, but N.Y. requires small business' to have a Sales and Use Tax permit which authorizes the business to collect sales tax on all taxable goods and services including online sales but I'm not sure how that works with online sales to out of N.Y. state customers. Any Secretary of State office could answer your question about this.
One warning. The State will always give you advice that is beneficial to them. If you ask whether you need to collect out of state sales taxes, or register for sales and use taxes for out of state sales, they very well could say yes. It is a very bright line, decided in 1991 in a case decided by the US Supreme Court, that if you sell out of state and do not have nexus in that state, you DO NOT have to collect sales taxes. I am simply saying do not trust your state to give you the correct answer on this one, since many people have been told the wrong answer by states hungry for revenue. If its out of state, you do NOT collect taxes, nor have to register to collect taxes. Lots of cash starved States out there hosing their own people nowadays.
