# Gov't is Making it Hard For The Little Guy Just Trying To Make Chump Change



## Susan_in_SF (Oct 1, 2019)

I just wanted to vent over news that I just found out about today, via my email:



I appreciate how they let me know with lots of advance notice.  I get the email on the day that the law takes effect.

Then, I researched the California laws on this site:


			https://www.cdtfa.ca.gov/lawguides/vol1/sutr/1595.html
		


There, I read,
"Generally the minimum number of sales to require the holding of a seller's permit by a person not otherwise engaged in a selling activity is three within any 12 month period."
As shown here:



So, if you make more than 3 sales a year for anything and are not a charitable organization,  religious entity, etc., EBay will automatically charge your customers sales tax, and (I think I also read) report your income to the gov't!  It apparently doesn't matter how little the sale is.

OMG!! It's bad enough they made crappy Chinese stuff more expensive (Federal), now many states want to make money off of your sale, even if It's for a used pair of cheap pants.

I will do some more research to confirm my accusations, but between the cost of shipping within our own country, and this newly put in sales tax law, I won't be able to afford to buy used stuff (maybe a good thing since i bought too much used machinist stuff ;-)   ), and now have to worry about eBay AND PayPal reporting my sales (which is like 6 a year - but not any more in case the gov't reads this) to the gov't?

It's crap like this that made me go cold turkey on Facebook.  I don't want them coming after me for having a few garage toys, ya never know!

And, since PayPal is working with eBay, I don't feel safe even selling on this site if paid via PayPal, grrrr!

Thank you for putting up with my rant.

Susan


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## cathead (Oct 1, 2019)

Susan,

Sometimes ya just gotta vent.  What the sales tax does for me is that I find more ways to not buy stuff by making my own things
or buying from a private party.  A dollar not spent saves the dollar and also the tax so I have good incentive that way.


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## NCjeeper (Oct 1, 2019)

I just moved from NC to VA. I buy a lot of stuff off of E-bay. NC didn't charge internet tax. VA does so I pay more on my purchases now.


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## Bob Korves (Oct 1, 2019)

I haven't bought anything from eBay in several years now.  It just keeps getting sillier and sillier...  (And I don't NEED more stuff...)


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## cjtoombs (Oct 1, 2019)

Not like one couldn't see this coming.  Back in the day when the amounts were small, nobody cared.  With larger and larger portions of retail going to online sales, states are not going to let that revenue go.  Look at it this way, if they didn't collect that tax, they would just raise them somewhere else.


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## Ulma Doctor (Oct 1, 2019)

the problem with Government, is they misappropriate funds, then want only more funds.


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## Holescreek (Oct 1, 2019)

Am I missing something?  Ebay/Paypal is collecting sales tax from the buyer and sending it to the buyers state for you.  It doesn't sound like they are taking money from you (or even notifying your state that you are making unreported money).

Do you think that people won't buy your stuff because sales tax is added on?  Amazon collects sales tax on everything they sell for others and they're making lots of money still.

99% of my sales are made through Paypal transfers but I haven't heard a word from them about automatically collecting sales tax yet.  It must be coming though based on the Ebay notice.


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## Susan_in_SF (Oct 1, 2019)

I feel like that old movie, Network, where everyone was yelling out their windows, "I'm mad as hell, and I'm not gonna to take it anymore!," even though I have bought practically everything that is awesome in my garage through craigslist, lol
But lots of people, ahem ,  are getting by on Social Security where eBay helped them make ends meet with a little unreported income.  These are the folks who really lose, if they lose any sales, in my meager opinion


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## Susan_in_SF (Oct 1, 2019)

Holescreek said:


> Am I missing something?  Ebay/Paypal is collecting sales tax from the buyer and sending it to the buyers state for you.  It doesn't sound like they are taking money from you (or even notifying your state that you are making unreported money).
> 
> Do you think that people won't buy your stuff because sales tax is added on?  Amazon collects sales tax on everything they sell for others and they're making lots of money still.
> 
> 99% of my sales are made through Paypal transfers but I haven't heard a word from them about automatically collecting sales tax yet.  It must be coming though based on the Ebay notice.


See my previous posts.
All that nickel and diming is bs.  I have chatted quite a few times with senior citizens who I bought from via eBay who are barely getting by.  
Let me find that article that mentions they admit they are working with the gov't in letting them know who isn't excluded and I will post it, after I am done scooping kitty litter now..


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## matthewsx (Oct 1, 2019)

So....

Try starting up a business where you are required to collect state sales tax, or local sales tax, or payroll tax for that matter. Pay monthly and get penalized if you don't get the right forms filed on time (or when they just don't open the envelope and record it). And then deal with them for years after you closed the business and moved out of state.

We all have to pay taxes on what we earn and what we spend in the US, some folks have it better than others sure but that's starting to get into politics which ain't allowed here. 

Sounds like eBay is looking out for you with this one.


Just sayin'

John


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## Susan_in_SF (Oct 1, 2019)

matthewsx said:


> So....
> 
> Try starting up a business where you are required to collect state sales tax, or local sales tax, or payroll tax for that matter. Pay monthly and get penalized if you don't get the right forms filed on time (or when they just don't open the envelope and record it). And then deal with them for years after you closed the business and moved out of state.
> 
> ...


Understood.  I was wrong.  I apologize.  I will try to delete that post.  Sorry


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## Susan_in_SF (Oct 1, 2019)

Susan_in_SF said:


> Understood.  I was wrong.  I apologize.  I will try to delete that post.  Sorry


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## Susan_in_SF (Oct 1, 2019)

Anyways, I think I will leave this posting as it is now, and move onto more positive stuff, like the game I plan on having here called, Name that Tool!
I have lots of mystery tools to share that I really Don't know what they are, and were bought from small "lots" from estate sales and such.


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## RJSakowski (Oct 1, 2019)

In Wisconsin, we are required to pay WI sales tax on any out of state purchase which have not been taxed at the point of sale.  The state does not aggressively enforce that law but every Spring when we do our taxes, I total up the out of state purchases and we pay the the sale tax on that total along with our state income tax. Having eBay do the calculation and add the taxes at the time of sale will make my spring chore a little easier.

States have realized that out of state purchasing via mail telephone, or online was was depriving them of a vast amount of revenue.  Their first proposition was that every seller would be required to collect sales tax on out of state sales and submit those collected taxes to the respective states.  This would have created a nightmare for small entities in that they would have to track the sales tax laws of every state in which they had customers and submit the collected taxes to those states.    It sounds like what is being put into practice is far less onerous.

On principle, I do object to the collection of sales tax on sales of items previously taxed.  This reeks of double taxation to me.  For items like vehicles, boats, and RV's that are registered it can't be avoided as you have to submit sales tax along with the registration application.  So far, we haven't seen tax collectors at flea markets and ham fests but there is talk.


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## eeler1 (Oct 1, 2019)

have your purchases sent to a friend in Oregon?  Maybe Nevada?

I once got my house liened for payroll taxes.  I had no employees one period, so didn’t fill out or turn in any paperwork.  Turns out you have to submit a payroll report even if you don’t have any payroll.  Who knew?

I sell stuff on ebay occasionally, haven’t run into sales tax yet, though.  Or haven’t noticed.  Maybe another lien coming?


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## Susan_in_SF (Oct 1, 2019)

Thanks guys.  Considering I was being an emotional woman, y'all handled my venting as mature, respectful machinists .  You guys are why I like visiting this site more than any other social media.


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## darkzero (Oct 1, 2019)

Just a matter of time before it happens. Got word that it would happen eventually a few yrs ago. Amazon already had to make the change & went into effect for ebay for a number of states earlier this year.

I was ready for the internet sales tax to kick in today for my state on ebay. I made all my purchases for the things I had saved on ebay these past 2 weeks & made my final purchases yesterday. Saved quite bit of money so I'm happy about that at the least.


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## Superburban (Oct 1, 2019)

I don't like it, but I can live with Ebay collecting, and dispersing taxes. But how do I know other online places are actually forwarding the collected taxes to the correct state? When I lived in Pa, a sporting goods store was caught collecting tax on non taxed items, and not forwarding it to the state. States can audit stores, and hopefully catch such scams, But they have no way to audit online stores. I know I am a skeptic, but I see more fraud will happen, then taxes actually forwarded. 

I also wonder how Ebay categorizes and collects the right tax. Its a mess for retail stores dealing with one tax. Unless they changed it, Pennsylvania taxed clothing used for sporting (hunting cloths, team stuff, golf shoes, ect), but not clothing for everyday use. So we were supposed to ask the costumer what they were going to use the camouflage shirt they are purchasing for, and ring it up accordingly. The store accountant raised a red flag, when the receipts were showing no cloths sold for sporting use. Similar thing for food. Then you have the farmers, and businesses that have tax ID numbers. And do not pay tax for certain items. I know it is because of the Supreme court ruling, but I think it will not be as simple as the court thinks. Every online store will have to update their sales programs to track whats taxable, and whats not for each state, and also which costumers fall under the tax exempt categories.


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## darkzero (Oct 1, 2019)

eeler1 said:


> I sell stuff on ebay occasionally, haven’t run into sales tax yet, though. Or haven’t noticed. Maybe another lien coming?



You won't see it in your sales. Ebay & Paypal will automatically collect the sales tax for those required & automatically submit them to the state. You'll still receive the amount that you are selling for.

If you use the Seller's Hub it's said that you can see the sales tax that have been collected for your sales when applicable. I don't use it so not sure where to look.


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## Susan_in_SF (Oct 1, 2019)

darkzero said:


> You won't see it in your sales. Ebay & Paypal will automatically collect the sales tax for those required & automatically submit them to the state. You'll still receive the amount that you are selling for.
> 
> If you use the Seller's Hub it's said that you can see the sales tax that have been collected for your sales when applicable. I don't use it so not sure where to look.


My 21 yr old daughter got in trouble with the City of San Francisco Treasurer and Tax Collector.  Why? Because she opened up a herbal tea store on Etsy.  She basically sold to a couple of customers per month homemade herbal tea flavors.  She probably made less than $100 in a 6 month period.  Anyways, because she opened up that store, ETSY REPORTED HER TO THE CITY OF SAN FRANCISCO.   Then, we started getting lots of warning letters from the SF tax collector stating that she must file for a resellers permit.  Ultimately, long story short, she decided to move to Atlanta GA since the cost of living was so low there, and she liked it there.
Then, the guy I've been dating is in trouble with the IRS because they claim he doesn't need to travel to his clients (all over the U.S.), which he actually must do, but they don't agree, so they claimed he under-reported earnings by including his travel expenses.
Ok, I said I was not posting anymore, but had to share that tidbit of my gov't experience.

Now moving on ;-)

Susan


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## Bi11Hudson (Oct 1, 2019)

I agree almost 100% with your rant. While I don't object, although I don't like it, I do pay sales tax on new items. Same as if I could find something locally. Which is why I buy on eBay and the like. There isn't a source locally, at any price, for most of the things I purchase online.

Where my beef gets its' teeth is with used / previously taxed items. My purchasing has gone down by at least half, maybe more. I do did resell a lot of the items I find on eBay. And pass along the sales tax as part of the cost. But otherwise don't make any profit to speak of. It's about the hobby, not money.

The tax paperwork is too much of a problem. The way I figure it, I don't file any because anyone doing tax work should be up and about doing work, not sitting behind a desk growing zits on their gluteus maximus. I have a (legal) corporation that allows retail reselling. But I don't use it, mostly because I'm retired and don't like the paper shuffling until the ink is worn off the pages. The tax man is paid to do that, let him earn his own keep. Don't lean (tread) on me.

.


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## savarin (Oct 1, 2019)

In Oz we pay  "Goods and Services" tax on all our ebay purchases but ebay takes that out.
Purchasing from the states is now out the window, the shipping costs are usually  way more than the product.


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## RJSakowski (Oct 1, 2019)

That reminds me of a scrap dealer in a town not far from me.  He also had a welding shop and was an ornery old cuss.  It came to pass that the state decided to audit him.  When he didn't show up, they came to his shop and demanded that he go through all his records.  He brought down several grocery bags stuffed with receipts, invoices, and the like  and put them on the table.  Then he threw down a set of keys and said "Here are the papers.  Lock up when you leave.  I'm going fishing."  The tax men tried to go through the papers and finally gave up and left.


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## matthewsx (Oct 1, 2019)

My dad taught me that Schedule - C losses go well with W2 income and it worked pretty well for most years. Then there was the year we made a profit in the business; my wife asked where the tax refund was and I had to explain that you don't get deductions for profits  

Dad was a very, very smart engineer; like sending men to the moon with a slide rule smart. He would read the tax code (not the IRS rules, the actual law) every year before doing his taxes. Figured out he could estimate everything so didn't keep receipts at all. He got audited three times, one time he had to pay the other two they paid him....

"Declare the pennies on your eyes"

John


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## Susan_in_SF (Oct 1, 2019)

darkzero said:


> Just a matter of time before it happens. Got word that it would happen eventually a few yrs ago. Amazon already had to make the change & went into effect for ebay for a number of states earlier this year.
> 
> I was ready for the internet sales tax to kick in today for my state on ebay. I made all my purchases for the things I had saved on ebay these past 2 weeks & made my final purchases yesterday. Saved quite bit of money so I'm happy about that at the least.


Smart man


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## Holescreek (Oct 1, 2019)

Can you imagine how large the government (county, city, state) tax departments would have to grow to handle all of the previously unlicensed sellers that dabble in online sales if they were outed by the sites they use for commerce?

When I looked into it last year, Paypal doesn't report anything to the IRS until you cross the $15k per year threshold.  Etsy reporting a small seller to a city tax entity must have to do with the location of their business offices or something equally silly.


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## Susan_in_SF (Oct 1, 2019)

matthewsx said:


> My dad taught me that Schedule - C losses go well with W2 income and it worked pretty well for most years. Then there was the year we made a profit in the business; my wife asked where the tax refund was and I had to explain that you don't get deductions for profits
> 
> Dad was a very, very smart engineer; like sending men to the moon with a slide rule smart. He would read the tax code (not the IRS rules, the actual law) every year before doing his taxes. Figured out he could estimate everything so didn't keep receipts at all. He got audited three times, one time he had to pay the other two they paid him....
> 
> ...


One of my vintage toolboxes had a lot of Lockheed Martin stuff in it.


Actually, a lot of my stuff came from engineers.  I usually imagine the old school engineers as guys who could figure stuff out with pencil and paper what most of us now need computers for.  So, yeah, I bet your dad was super smart.


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## Susan_in_SF (Oct 1, 2019)

Holescreek said:


> Can you imagine how large the government (county, city, state) tax departments would have to grow to handle all of the previously unlicensed sellers that dabble in online sales if they were outed by the sites they use for commerce?
> 
> When I looked into it last year, Paypal doesn't report anything to the IRS until you cross the $15k per year threshold.  Etsy reporting a small seller to a city tax entity must have to do with the location of their business offices or something equally silly.


Probably, but my daughter said that her opening a store triggered everything.  I was hoping to sell some hard to find expensive stuff.  Sales tax in SF county is 8.5%, but they probably would charge based on customer's shipping address county rate.


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## Susan_in_SF (Oct 1, 2019)

savarin said:


> In Oz we pay  "Goods and Services" tax on all our ebay purchases but ebay takes that out.
> Purchasing from the states is now out the window, the shipping costs are usually  way more than the product.


Where is Oz?  Just curious since you mentioned not buying from the state's.

Susan


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## savarin (Oct 1, 2019)

Sorry Susan we all assume the whole world knows thats short for Orstraylia (A broard accent for Australia)


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## chips&more (Oct 2, 2019)

Time for a tea party!


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## Tim9 (Oct 2, 2019)

RJSakowski said:


> That reminds me of a scrap dealer in a town not far from me.  He also had a welding shop and was an ornery old cuss.  It came to pass that the state decided to audit him.  When he didn't show up, they came to his shop and demanded that he go through all his records.  He brought down several grocery bags stuffed with receipts, invoices, and the like  and put them on the table.  Then he threw down a set of keys and said "Here are the papers.  Lock up when you leave.  I'm going fishing."  The tax men tried to go through the papers and finally gave up and left.


Yep, 30 years ago I did sort of the same thing at my shop. The city decided to audit me because I wasn’t paying a lot on sales taxes...so some city CPA came over and wanted my records. I cleared my desk and gave him boxes of receipts. He spent a week in my office going through boxes and pressing buttons on an adding machine. Also...fortunately for me it was raining for a few days so the leaky roof added to the whole thing. That  office was a disaster. 
    Anyway, after a week he comes back and tells me.... “I don’t see how you’re still open.  You’re loosing money.” I told him no **** and he left. 
    I hated paperwork so my records were a mess. The only thing I miss about having my own business is the cash and the big building. Other than that you can have it.


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## Superburban (Oct 2, 2019)

Now days, they will add an extra fine for not keeping proper records.


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## Tim9 (Oct 2, 2019)

Superburban said:


> Now days, they will add an extra fine for not keeping proper records.


Unfortunately... the government has been using the war on drug laws to clamp down on money laundering. It’s almost impossible to even cash a 5,000 dollar check drawn on ones own account. You must jump through multiple hoops. And God help you if you live in one of those rural areas and get pulled over on the way home while carrying 5k in cash on you. Some overzealous cop can seize that cash under these Drug War laws. You’re going to spend the next ear trying to get your cash back.. 
    It’s whacked. Everything is broken in America. There’s really no freedom anymore. One spends their life defending themselves from crap IMO. 
Anyway.... we really are approaching a cashless society. And that’s not a good thing.


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## MrWhoopee (Oct 2, 2019)

Back when I was Fred's foreman, before the Internet, we went through a state sales tax audit. It cost him $6k, almost entirely due to unreported out-of-state taxable purchases. When I opened my own shop, we were very careful to track out-of-state tooling purchases (taxable, mostly MSC and Rutland) and job materials (resale). We always paid the sales tax on the taxable purchases. We were audited after 4 or 5 years in business. The auditor spent a week going over our records. I noticed on Friday afternoon that he was just sitting at the desk staring into space (before smart phones). I asked how he was doing and he said that he'd found a few small things, but not nearly enough to pay his salary for the week. We were never audited again.


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## matthewsx (Oct 2, 2019)

Good record keeping is essential to operating a business. I found it was worthwhile to have my bookkeeper come in once a month to make sure everything was up to date. Didn't keep me from loosing money but at least I knew where it was going

Definitely second the "cash and big building" thing, went from 4800 sqft to about 250

John


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## Be_Zero_Be (Oct 2, 2019)

Sales tax on eBay purchases is bad enough but in Washington State we get to pay sales tax on the shipping as well.


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## RJSakowski (Oct 2, 2019)

Be_Zero_Be said:


> Sales tax on eBay purchases is bad enough but in Washington State we get to pay sales tax on the shipping as well.


Our tax accountant advised us to pay sales tax on shipping (Wisconsin).  It's a sales and use tax; 5.5% at the moment but due to go up.
I pay sales tax on stuff shipped from China too.


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## Superburban (Oct 2, 2019)

RJSakowski said:


> I pay sales tax on stuff shipped from China too.


That is something that had me wondering, does the other sites like allibaba, or what ever, have to collect the sales tax? I think they are based in china. This could give foreign companies and even more advantage over US businesses.


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## HBilly1022 (Oct 2, 2019)

If money is changing hands, the government always demands a cut. Remind you of any other organizations? 

Where I live there are taxes on virtually everything, including most groceries. There are federal taxes of 5% and Provincial taxes of 7%. But that's not all. On some things there are Carbon taxes too and then there are the Eco fees. This one really pi$$es me off because they tax the ECO fee. On some things I buy the total taxes and fees add up to over 25% and this is on money that was already taxed when I earned it. It wouldn't hurt AS much if the money was used wisely!!!!


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## Susan_in_SF (Oct 3, 2019)

savarin said:


> Sorry Susan we all assume the whole world knows thats short for Orstraylia (A broard accent for Australia)


I'm glad I asked, seriously, since I never would have guessed, lol


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## Susan_in_SF (Oct 3, 2019)

Superburban said:


> That is something that had me wondering, does the other sites like allibaba, or what ever, have to collect the sales tax? I think they are based in china. This could give foreign companies and even more advantage over US businesses.


I heard in the past that the U.S. gov't did some deal with China that allowed retail items to be shipped to U.S. customers for super cheap and fast.  That explains how a $5 item bought off eBay and shipped from China can sometimes arrive as fast as just a couple of days.  I could be wrong with what I ju st said, but I do think I remember someone telling me this a long time ago.  The shipping is especially hard on sellers who don't qualify for monthly bulk shipping discounts


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## Superburban (Oct 3, 2019)

Susan_in_SF said:


> I heard in the past that the U.S. gov't did some deal with China that allowed retail items to be shipped to U.S. customers for super cheap and fast.  That explains how a $5 item bought off eBay and shipped from China can sometimes arrive as fast as just a couple of days.  I could be wrong with what I ju st said, but I do think I remember someone telling me this a long time ago.  The shipping is especially hard on sellers who don't qualify for monthly bulk shipping discounts


It was an agreement between many companies many years back. For international postage, it was agreed that each country only had to get the item to the other country, and the receiving country would deliver it without further cost (free). The original idea was that it would work out in the end. Remember, this was back when snail mail was the norm. China took advantage of the deal, and subsidizes the shipping, resulting in the cost for the Chinese companies to be pennies. Then the real cost is born by the USPS to get it to you.  I have heard that these Foreign Trade Zones across the US, falls under the same deal, so something shipped from the City of industry CA,s Foreign Trade Zone, just costs them the gas to run the item across town to the US post office.


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## vtcnc (Oct 5, 2019)

Morning everybody, I don't think I can add anything useful to the depressing talk of double taxation and mind-numbing bureaucracy. However, I would just like to commend this group for keeping this thread on topic and up on the road and out of the ditch. Usually these turn political and this one has not because of the friendly back and forth and anecdotal stories people are sharing here to help shed light on an otherwise very complicated topic. 

Thank you for making our jobs as mods and admins easy and enjoyable! Have a great weekend!


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## Chips O'Toole (Nov 13, 2019)

I'm actually glad to see taxes being collected on the web. Legally, I owe the taxes regardless of what sellers may choose to do, and I do not want my state coming after me 10 years from now with a big bill. The fact that you got away with not paying for a machine last year doesn't mean your state forgives you. If they find out about it in 2030, they will still expect you to pay the tax plus penalties.

In my state, paying Internet taxes on your own is incredibly tedious and difficult, so having a seller do it for me is a big help.


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## Bi11Hudson (Nov 13, 2019)

Chips O'Toole said:


> I'm actually glad to see taxes being collected on the web. Legally, I owe the taxes regardless of what sellers may choose to do, and I do not want my state coming after me 10 years from now with a big bill.



I do agree to an extent. My beef is paying taxes on *used* purchases. My own state (Ala) doesn't ask for sales taxes on used products, products that have already been taxed, in a store front establishment. Only on internet sales. Baahhh~~~

.


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## brino (Nov 13, 2019)

Susan_in_SF said:


> Where is Oz?



Follow the yellow brick road. 
-brino


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## RobertB (Nov 13, 2019)

Bi11Hudson said:


> I do agree to an extent. My beef is paying taxes on *used* purchases. .


Yep, stuff has already been taxed once, that should be enough.


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## darkzero (Nov 13, 2019)

Bi11Hudson said:


> My beef is paying taxes on *used* purchases.





RobertB said:


> Yep, stuff has already been taxed once, that should be enough.



Yep, thing is for ebay, as a company they are now required to charge tax cause they are selling, although what they are making money on is the sales of other people's sales. Of course I don't agree with it but I do understand why they are required to charge tax now, it's not the private parties on ebay who are charging the sales tax, ebay does it automatically.

I don't agree with what was mentioned about how some states charge tax on shipping costs. I donxt think you should be required to charge tax on services or labor. In a way I guess that's what ebay is, offering a service but along with their service comes with goods exchanged.

Now if they start trying to collect tax on CL, Offerup, Letgo, etc then I'm done. I'm moving!


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## eeler1 (Nov 14, 2019)

Dang.  Then where is the Emerald City and the wizard?


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## C-Bag (Nov 14, 2019)

I've been waiting for all this to happen for as long as we've had commerce on the net. But I guess as an acoustic musician I'm used to being bullied. As bad as da guv is unless you've been squeezed by the mafia there are no meaner scarier thugs than ASCAP and BMI. They are the organizations who are supposed to enforce copyrights on music and they basically offer bounties to go around and shake down venues that have live music. We had a little pizza place we played in once a month were lucky to pull min wage for 4hrs ea. One day went by and it was closed. The thugs showed up and said he owed $30,000 back royalties and he just folded and left. We used to have a monthly bluegrass jam in the local Grange Hall where we asked for donations to rent the hall and it got slapped with a royalty and went away. Even though there were no paid performances and they couldn't exactly calculate the percentage of current copyrighted material played. Do you know you are supposed to pay a royalty to sing "Happy Birthday"?

It was bad enough that as a musician your "work" is described as play, but for some reason an acoustic musician is seen as somebody who has no overhead. When I pointed out to a promoter when he wanted to pay us 1/4 what a same size quartet electric band wanted he said they have more invested. He didn't believe me when I said my mandolin cost more than the lead guitar players whole rig, guitar, amp and pedals combined. Justice is an elusive concept.


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## projectnut (Nov 14, 2019)

Alabama may not ask for sales tax on "some" used goods, but they do ask for it on most  The difference as to whether or not a sales tax is due is the number of sales.  Like most sates Alabama doesn't tax the "occasional sale".  I'm not sure the definition Alabama uses for 'occasional sale, but in Wisconsin it's defined as selling more than 3 items in a taxable category per year.

This definition allows a private party to sell a limited amount of personal goods, i.e. furniture, machinery, appliances, motor vehicles, etc. without being subject to taxes.  On the other hand if no taxes were required on any used items it opens the door for abuse.  Every sleazy business person would claim whatever they are selling was "used" and therefore not subject to taxes.  Millions of dollars worth of high dollar items like motor vehicles, household goods, and machinery could be sold by commercial dealers without paying a cent of taxes.

When internet sales first came along there was a 10 year sales tax moratorium for at least 2 valid reasons.  First to grow the business, and secondly because there was no good mechanism to collect the taxes.  Online sales now account for nearly 15% of ALL sales across the country.  In a time when every level of government is strained for funds it's only natural for them to be looking for new sources, and eliminating as many loop holes as possible.  Even if the dollar amount of sales remained static since the inception of the internet that means local and state governments are collecting 15% fewer dollars than before the arrival of the internet.  We all know the total amount of sales has not been static, but rather has nearly quadrupled since 2010.

In the next 5 years internet sales are expected to grow by double digit amounts.  A recent survey found that 60% of ALL shopping done by Millennials is done online.  If this trend continues (and it is expected to) within the next 10 years retail sales from brick and motor stores will no longer the single viable source of income for programs currently being funded by sales taxes.


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## JPigg55 (Nov 14, 2019)

projectnut said:


> In the next 5 years internet sales are expected to grow by double digit amounts.  A recent survey found that 60% of ALL shopping done by Millennials is done online.  If this trend continues (and it is expected to) within the next 10 years retail sales from brick and motor stores will no longer the single viable source of income for programs currently being funded by sales taxes.



And there's the rub.
In a lot of ways, internet sales are a great thing. Easy to price compare, read reviews, and have whatever delivered right to your home.
The problem is that many times "Brick & Mortar" stores can't compete with the large volume sellers on the net. The end result being those businesses closing their doors and going out of business.
From a purely business point of view, this makes sense, but at the local level, people now have to either order online or drive large distances to get what they want. From a tax point of view, the City, County, and State lose the taxes from that business as well. They aren't about to take less money so they raise other taxes to get it back.
They can't tax the big volume sellers, they just leave resulting in even fewer tax dollars. They pass the taxes on to the people with higher and more taxes on everything they use or do.
A large part of the problem is the tax structure. The more you make, the more you pay.
When you really think about how you are taxed and the amount, it makes you sick. They tax what you earn, what you spend, what you save, what you have, what you use, ....etc. What's the percentage now ??? 60%-70% of every dollar you earn goes to paying taxes ???

How much longer before the government takes all you have and more ??? Remember the song lyrics "I owe my sole to the company store" ???


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## matthewsx (Nov 14, 2019)

It's very much more complicated for several reasons.

1. There are twice as many people on the planet as there were when I was a kid, so therefore at least twice the demand for everything as there was 50 years ago.

2. The BUSINESS tax structure in the US (worlds largest economy) enables large businesses to use revenue to get continually larger, thus feeding a self-perpetuating loop.

3. All forms of government regulation lag behind the advances of business development because governments have fewer resources and more internal controls than business.

4. Consumers are, always have been, and always will be primarily motivated by perceived value (their opinion of the value of a product to them), rather than the overall impact to society, environment or local economy.

I could go on but I won't because I'm not an economist and don't want to get into a political discussion. I would just encourage everyone to pay attention to their choices and how they effect the world around us.

Cheers,

1ohn


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## Superburban (Nov 14, 2019)

My biggest issue, is there is no oversite to the online tax collection. When I owned a brick and mortar store, I had to have a license from the city, county, and the state to collect taxes. I was subject to an audit at any time, by any one of them. You could bet that if anyone found any issues, then I would get a visit from one of the others very soon. Even though I never had any issues, it was strongly suggested that I use an accounting firm, and they would not audit me. What is there to stop these online sellers from collecting the tax, and pocketing it? With no oversite, this only puts the online store in a better advantage, as he can sell it even cheaper, and make more by pocketing the extra tax collected. Even a big place like Ebay, can easily be collecting the tax, and then reproorting and forwarding 1% less to each state, and make a ton, and never have to worry about getting caught.

As of yet, I think the online stores do not have to collect the city, and county taxes, so they still have that advantage.


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## vtcnc (Nov 14, 2019)

Hi everyone, thanks for keeping this on topic, i.e. on the government and taxes - and keeping politics out of it. This has been an informative thread and I've appreciated the different takes on taxation that have been offered up here.

On the topic of how much we pay in total taxes...I read a study once that said in the U.S. that the average taxpayer is taxed at a TOTAL rate of approx. 50% and this includes government fees, (e.g. DMV registration fees that aren't called a tax but sure does smell like one.)

That was probably ten years ago when I read that. I would say for myself, I don't keep track of sales tax, gas tax, city tax, hotel taxes, etc., - so 50% feels a smidge on the high side for me. And I would also say that because I've earned more over time, I'm paying more overall tax but I'm not sure my overall tax rate is much higher than it was say 10-20 years ago.

Vermont charges a progressive tax on internet sales and it is based on income. The choice on the form is something like this: "Did you pay tax on internet purchases this year?" If not, then you are on the hook for X based on your income. I think the highest sales tax they nail you for on internet sales is $200 when you file. Vermont sales tax is 6%.

Again, no hard numbers to go by here just anecdotal experience - and I am in a heavily taxed state in Vermont - so. take all of this with a grain of salt.
On the other hand, I wouldn't be surprised if my total tax is higher than 50% and I've just adjusted because that is what people do - adapt to their environment.


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## vtcnc (Nov 14, 2019)

Superburban said:


> With no oversite, this only puts the online store in a better advantage, as he can sell it even cheaper, and make more by pocketing the extra tax collected.


Sorry, but this just isn't happening with large sites like eBay or Amazon. The tax collection industry is alive and well at all state levels and large reputable businesses don't screw around with the governments money. Are mistakes made? Yup. But skimming? No way. If anything I could see individual operators or small businesses trying to get away with this for a short period of time but they won't and in fact don't.


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## JPigg55 (Nov 14, 2019)

vtcnc said:


> On the topic of how much we pay in total taxes...I read a study once that said in the U.S. that the average taxpayer is taxed at a TOTAL rate of approx. 50% and this includes government fees, (e.g. DMV registration fees that aren't called a tax but sure does smell like one.)



It is difficult/impossible to come up with a hard and fast percentage as it's different for each individual based on lifestyle, location, spending habits, etc.
Don't forget about the hidden taxes like "Inflation" which *IS *a tax. The easiest way I saw to understand this was this example:
Say you have $10,000 in savings. That $10K has a certain buying power, i.e. will buy a certain number of items and/or services.
If inflation is 3%, that means the cost of those same items/services went up 3% while your savings stayed at $10K.
So basically, your $10K just turned into $9,700. In essence, the government just reached into your mattress and pull out $300.

If you think about it, you are being punished for saving your money.
"How dare you save your money, we can't tax it if you're saving it. Of course you can invest it and avoid the Inflation tax and we get more taxes if you make more money investing."
"Of course if you lose it making bad investment or the market crashes, too bad. We still get our cut from whomever got your money and you can only write off a small percentage of what you lost.
Welcome to the BIG Casino."


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## matthewsx (Nov 14, 2019)

One of the strangest things I heard that now makes perfect sense is that you should spend your change rather than saving it up in a cookie jar. Any currency that you willingly take out of circulation (even just a penny) is like giving a loan to the government.

1ohn


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## 38super (Nov 15, 2019)

Some times you need to go outside, take a deep breath and yell an obscenity.  You feel better and you startled your neighbors.  I did that indoors at Yokota AB once, heard a tool hit the ground accompanied by much mumbling.  Made my day.


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## 38super (Nov 15, 2019)

If you were eBay, would you want to lose the customers of an entire state?


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## Superburban (Nov 15, 2019)

I was not accusing ebay over any other online sales site. Any one of them can easily skim off the top, with very little chance of getting caught. Even if they did get caught by a few states, the fine would be way less then they made by skimming.


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## mmcmdl (Nov 15, 2019)

C-Bag said:


> I've been waiting for all this to happen for as long as we've had commerce on the net. But I guess as an acoustic musician I'm used to being bullied. As bad as da guv is unless you've been squeezed by the mafia there are no meaner scarier thugs than ASCAP and BMI. They are the organizations who are supposed to enforce copyrights on music and they basically offer bounties to go around and shake down venues that have live music. We had a little pizza place we played in once a month were lucky to pull min wage for 4hrs ea. One day went by and it was closed. The thugs showed up and said he owed $30,000 back royalties and he just folded and left. We used to have a monthly bluegrass jam in the local Grange Hall where we asked for donations to rent the hall and it got slapped with a royalty and went away. Even though there were no paid performances and they couldn't exactly calculate the percentage of current copyrighted material played. Do you know you are supposed to pay a royalty to sing "Happy Birthday"?
> 
> It was bad enough that as a musician your "work" is described as play, but for some reason an acoustic musician is seen as somebody who has no overhead. When I pointed out to a promoter when he wanted to pay us 1/4 what a same size quartet electric band wanted he said they have more invested. He didn't believe me when I said my mandolin cost more than the lead guitar players whole rig, guitar, amp and pedals combined. Justice is an elusive concept.



My brother has been playing for some 55 years in the local establishments in Baltimore . I heard recently he lost a fairly regular gig at Silver Spring Inns for just this reason . No more live entertainment . 

On the other hand , gotta love bluegrass . Been listening in for 45 years now . 

https://www.youtube.com/watch?v=rVl1ibykWZU

If ya can't enjoy this one  …………………….well


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## Susan_in_SF (Nov 15, 2019)

projectnut said:


> Alabama may not ask for sales tax on "some" used goods, but they do ask for it on most  The difference as to whether or not a sales tax is due is the number of sales.  Like most sates Alabama doesn't tax the "occasional sale".  I'm not sure the definition Alabama uses for 'occasional sale, but in Wisconsin it's defined as selling more than 3 items in a taxable category per year.
> 
> This definition allows a private party to sell a limited amount of personal goods, i.e. furniture, machinery, appliances, motor vehicles, etc. without being subject to taxes.  On the other hand if no taxes were required on any used items it opens the door for abuse.  Every sleazy business person would claim whatever they are selling was "used" and therefore not subject to taxes.  Millions of dollars worth of high dollar items like motor vehicles, household goods, and machinery could be sold by commercial dealers without paying a cent of taxes.
> 
> ...


Yup.  That's most likely why stores like Sears and JC Penney will become things of the past...


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## RJSakowski (Nov 15, 2019)

The demise of Sears started long before online shopping hit the scene.  A hundred years ago, Sears was a a mail order giant.  A person out in the sticks could get virtually eeverything that was needed for day to day life from intimate apparel to a new home.  You could purchase the auto parts and tools to completely overhaul an automotive engine or transmission.  My replica of the 1915 Tools Machinery Blacksmiths Supplies catalog had 10 different models of machinists lathes with 75 different variations of  those.

When I started shopping at Sears in the 1960's their catalog still had a fairly complete line of tools although the line qwas starting to thin.  Craftsman tools had a reputation for quality and I purchased many of my early tools from Sears.  

In the 1970's, I went into the store looking for lathe tool bits.  They sold the lathes but you had to order the tool bits through the catalog.   In that same era, I was in their automotive section looking for a fairly commonplace part and unable to find it, told the clerk that I had more parts in my garage than they had in their store.

By the 1990's the tool section of the store had shrunk to about 10% of what it had been.  The department was staffed by a woman who must have come from the lingerie department, based on her knowledge of tools.  Sears went from one of my go to stores to one that I only went to as a last resort.  IMO, someone at the top decided to sell only what sold well rather than stock a complete line of products to meet their customer's needs.  On a search for a product, you don't have to be disappointed too many times before you write a vendor off.

Sears had the the opportunity to be the Amazon of online shopping.  They had an established network and the purchasing power to make it happen.  They dropped the ball big time.


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## C-Bag (Nov 15, 2019)

Susan_in_SF said:


> Yup.  That's most likely why stores like Sears and JC Penney will become things of the past...


???????, they are no more AFAIK. Like RJ points out they just quit the model that made them big. The only difference between early Sears and Amazon was you had to order out of a catalog, now you order online. I try my hardest to support local biz and our local Ace hardware store even though tiny knows and stocks what is useful to our tiny community. So many others were not good at stocking anything relevant and would always say "I can order it for you". Thats just plain lazy. And you'd have to be near comatose not to just order it yourself, especially when if you do let them order for you 9 X's outta 10 it never shows and all you get is excuses. Been there.


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## kb58 (Nov 15, 2019)

And Kiwi is slang for New Zealanders.


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## brino (Nov 16, 2019)

RJSakowski said:


> Sears had the the opportunity to be the Amazon of online shopping. They had an established network and the purchasing power to make it happen. They dropped the ball big time.



Exactly Bob!
Sears should have owned internet sales.

I still use the Craftsman socket set my Dad got me for christmas one year....about 35 years ago....

-brino


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## hotrats (Nov 16, 2019)

I remember Sears in the mid-late 70's , you ordered, then went to the local Sears catalog store (think that's what they were called) and picked up your item. Great. And RJ is correct, Sears could have been the new Amazon. Even better, as they had local "brick & mortar" stores in place....


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## vtcnc (Nov 18, 2019)

Ironically, I just received an Amazon Christmas Catalog in the mail. Really brought back memories as a kid just laying on the floor, watching Saturday cartoons, spilling a bowl of cereal all over the carpet and circling the stuff in the Sears catalog that I wanted on my wishlist.


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## Chips O'Toole (Nov 18, 2019)

I just got my godson a toy. I looked at Amazon, and not only were most of the toys made in China; they were named for Chinese companies. Not Mattel and Hasbro and Ideal and Milton Bradley.


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## ericc (Nov 18, 2019)

The problem with the new EBay tax is that it falls more heavily on the small fish, as pointed out earlier.  It used to be EBay "rental" service only charged postage.  Now they charge tax both ways.  If I rent something from Sunbelt Rentals, I don't have to pay tax to return it.  If I buy a chuck from Shars and it doesn't fit, I can return it without paying tax either direction.  If I buy it on EBay from Mr. Small Time Garage Sale Flipper, I pay tax on it, and Mr. Small Time Home Hobby Machinist gets to pay tax again when he takes it off my hands.  There is probably some way to get a rebate on the taxes, but it is probably too difficult or requires $$$$ for some tax accountant advice.


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## Tim9 (Nov 19, 2019)

You all are absolutely right about Sears dropping the ball. Just a text book example of deplorable management. In fact, the three investors in one of the first internet online services (Prodigy) were IBM, Sears and CBS.
    Sears has the money to embrace the internet but didn’t want to listen to the young blood with online sales. Old management didn’t want to cut into store sales.
All Amazon dd was copy the Sears business model and the modernize it with online sales and delivery. But Sears had all the infrastructure in place. They had the warehouses and distribution networks.  Business schools will be studying the failure of Sears for the next 100 years.


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