Thread: Its now costing Even MORE!

The only logic I would agree on is that if you charge the official shipping rate one should not be taxed on the shipping charge as the post office is already paying taxes on it but any amount that you tack on should be taxed as that would be considered profit. Same with any shipping and handling fees. In NV we don't charge sales tax on the shipping charge. In the end I don't make the rules, i just follow them as getting audited is a headache and I like to sleep with a good conscience.

Originally Posted by Maximilian

The only logic I would agree on is that if you charge the official shipping rate one should not be taxed on the shipping charge as the post office is already paying taxes on it but any amount that you tack on should be taxed as that would be considered profit. Same with any shipping and handling fees. In NV we don't charge sales tax on the shipping charge. In the end I don't make the rules, i just follow them as getting audited is a headache and I like to sleep with a good conscience.

Amen to that. As a business owner, I fully expect to be audited sooner or later, and things like this are a good way to get hefty fines.

Btw it depends on state law of course. In Europe we have VAT as you know so it is passed on through the chain to the final customer. That is very similar to you paying sales tax on the amount you tack on to shipping charge (if applicable). The end result of sales tax and shipping tax are very similar. The way I understood it, it is a different way of doing things.

Originally Posted by Bruno

Actually, it is not only legal but mandatory. At least in Europe.
Shipping is a service that is provided by the seller, for which you pay them.
As such, it is subject to sales tax or VAT, whichever is used in your tax location.

I disagree with the line of thought that shipping is service provided by the seller. No, its a service provided by the Post Office, or UPS. I dont make any money on their shipping, THEY do.
So now we have Ebay charging fees on the shipping charge, and PayPal charging fees on the shipping charge, and the Govt, charging fees on the shipping charge... I also disagree that we should pay sales tax on ANY ITEM. sold used. When it was new, it was taxed. I am not a store, I am not a business, this is a private transaction between private parties, why should it be taxed yet again? I have always disagreed with the practice, and just because "thats how it is" does not mean I have to accept it, and will always advocate for how it "should be"

Here when you buy a used motor vehicle they tax you on the supposed value of it.

If I caught you at a weak moment and you sold me your truck for $5,000 but the estimated value of that truck was $15,000 I would get taxed at the $15,000 rate to transfer the title.......

The government would love us to go to a cashless society. If I give my neighborhood kid $20 to mow my grass they don't know. If I paid him with paypal.....

When I bought my '97 Harley it was from a guy in the next state (Idaho). He had trailered it about 200 miles for me to look at (he's a mechanic who works on semi trucks and he needed to come down anyway to get some parts).

Anyway I paid $8500 for it and he wrote a bill of sale for $8500. When I went to get the license at the court house they looked up the value and it was listed as $10,500 but since I had the bill of sale I only paid sales tax on the $8500 but it was still a bunch of money.

After we'd exchanged funds and title he started to take the licencse plate off and I asked 'Why'--it seems that in Idaho that you keep your plate and can use it for another vehicle until the plate expires or something like that.

I told him that 'IF' any kind of law enforcement saw that I didn't have a plate I'd get stopped and then have to go through the hassle of trying to explain and Hope that I didn't get a ticket.

So he left the plate on, the registration in the pouch and once I got the title in my name (the next day) I mailed him everything.

What's interesting is that he didn't want to part with the bike---his wife was insisting since they'd bought a brand new car--things like this make me thankful that I don't have a SWMBO

Originally Posted by cudarunner

When I bought my '97 Harley it was from a guy in the next state (Idaho). He had trailered it about 200 miles for me to look at (he's a mechanic who works on semi trucks and he needed to come down anyway to get some parts).

Anyway I paid $8500 for it and he wrote a bill of sale for $8500. When I went to get the license at the court house they looked up the value and it was listed as $10,500 but since I had the bill of sale I only paid sales tax on the $8500

Once, the DMV tried to stick me with the higher value too, I told them in no uncertain terms, the value in the book is based on condition, and this van has a bad transmission. (it didnt, but they have no way to prove that) Saved myself like 200 bucks

Originally Posted by Magpie

I disagree with the line of thought that shipping is service provided by the seller. No, its a service provided by the Post Office, or UPS. I dont make any money on their shipping, THEY do.
So now we have Ebay charging fees on the shipping charge, and PayPal charging fees on the shipping charge, and the Govt, charging fees on the shipping charge...

Well, that is one line of thought. In reality when a business is audited, the auditor works with what the law says, not with what the customer thinks.

In our example here, the seller is the one providing the service because HE is the one that the customer is dealing with. If the customer had a private contract with the shipping agency and arranged for pickup himself, then it would be true what you say. But if I ship something to you, then I am the one providing that service to you.

Originally Posted by Magpie

I also disagree that we should pay sales tax on ANY ITEM. sold used. When it was new, it was taxed. I am not a store, I am not a business, this is a private transaction between private parties, why should it be taxed yet again?

Because you derive income from it. Which you are supposed to declare

Originally Posted by Magpie

I have always disagreed with the practice, and just because "thats how it is" does not mean I have to accept it, and will always advocate for how it "should be"

It is fine to advocate 'what should be'. But any company or businessman you ever deal with will have to comply with 'what is' because they are the ones getting the visit from the auditors. And they don't want to incurr hefty fines just because the customer thinks that tax law is wrong and shouldn't apply to them.

Originally Posted by Bruno

Because you derive income from it. Which you are supposed to declare

Being a private party I cannot right off depreciation etc. like a business.

If I sell something for 50% of what I paid for it which was taxed originally.

I have lost money not derived an income from the sale.

It's not ebay who wanted this. You have to read up on all the articles which led us here. It's very messed up. I don't think this is anywhere near over fwiw.