Charging tax on United States coin sales

[hajnick]

Does eBay still charge tax on the sale of U.S. coins? I have not sold coins on eBay recently because eBay has been charging tax on the sale of U.S . Coins. They have lost my business because charging tax unnecessarily by eBay is a big ripoff and I do not want to be ripped off by anybody. I will resume selling coins on eBay only if eBay does not charge a tax on the sales of U.S. coins. Can eBay shed light on this sickening issue? U.S. Mint sells yearly proof sets to the public and resale value of these sets nowadays is roughly one tenth, yes 1/10th, of the U.S. Mint issue price.  What a wasteful investment! Buy a set from U.S. Mint for $22 plus shipping and resell the same set for $2.00. What a shame! Now we have to pay tax on the $2 recoup and net 9 cents on the dollar; with shipping, it will become a return of 8 cents on each dollar.  I don’t mind the big loss because I enjoy the hobby. But I mind adding fuel to fire. 

[ajs_coins_and_alchemy]

@farmalljr 

Follow-Up. From your recently sold items, I believe you are in Indiana? I see Indiana doesnt tax coins or bullion. I recently (last wk) sold to a guy in Indiana. I sold 4 peace dollars. He didnt pay any sales tax. This was not listed as bullion, it was listed as peace dollars.

So, your experience, maybe its still simply improperly listed? Maybe it's the commemorative category I explained in an earlier post here. There are hiccups. Whatever it is, it's not malicious, it's stupidity and hiccups

Also, please confirm you are being charged sales tax on the price of the item and not just shipping. Indiana apparently charges sales tax on shipping. Small sellers often charge shipping (u get charged tax) and many large sellers offer free shipping (u pay no tax). So ... you are being paid tax on purchase not just shipping, yes?

I mean...I'll go through this all and find an answer/solution for you if i can.

[ajs_coins_and_alchemy]

EBay isn't at fault other than commemorative category hiccup i talked about and maybe other oddities. Honestly, (small) seller, or you the buyer are doing something wrong. I listed my issue with taxes and I understand the hiccup. You don't buy on here anymore, thats your solution. Honestly, eBay (the company) won't miss you and the FVF fees you no longer bring. But they aren't scheming against you or anyone for that matter.

If it's the "bullion category only" and you actually search by category and not by miscellaneous searches, then idk how to help you. I can list a title as "Bullion" and list it under the coins category. Heck, my Peace dollars had "bullion" in the title and were under "coins" category. 

There is something more to all of this, but since you've apparently shut the door on eBay and this avenue of thought, then there goes that. Nothing ventured, nothing gained.

[farmalljr]

I appreciate the help offer, but again, I no longer buy bullion here.

Yes, I was charged tax on the TOTAL, not just shipping. Yes I bought ALL of it in the bullion category, not the coin or other categories. 

I stopped buying here 6 months ago. I finally had enough of the silliness. 

[ajs_coins_and_alchemy]

Ok, this clearly won't help you, but I may have just nailed it down. So please feel free to ignore this @farmalljr but I'm proceeding as this may help someone else, maybe you'll find it interesting. Whatever, it's meant to serve the community as a whole.

Indiana law (as I read it) exempts 1) legal tender or 2) bullion of a minimum purity.

This is directly related to the problem i have that in a previous post discussed above. RECAP I'm in IL, legal tender and bullion of minimum purity are exempt, commemorative coins are "legal tender" per the US mint but many aren't .999 fine to meet bullion grade. EBay doesnt recognize the commems are legal tender, realizes they aren't .999 fine and thus i pay sales tax "illegally". It's a pitfall in the EBay system that you (apparently) can't state whether or not the item is "legal tender". 

How this relates. Ok, so, again. 1) legal tender ... 2) minimum purity bullion. If someone lists an item within the bullion category, and does not state a purity that meets the minimum requirements for tax exemption under the bullion clause, it is subject to sales tax.

Case in point ... I just went in, found a WASHINGTON QUARTER in the BULLION CATEGORY. This is legal tender, and listed under bullion. Soooooo not taxable under IL law. However, the person listed the quarter as .750 purity. BAM. It's listed as bullion and not a washington quarter (not recognized as legal tender) and it's listed as below the minimum requirement for purity for tax exemption (not high purity bullion).

I went to buy it and it wanted to charge me sales tax on the item!

This is a PRIME EXAMPLE of how a proper listing and proper description/details matters. EBay can't police what we list. They rely on sellers to list properly.

So that being said. If you go to buy silver eagles...and the seller listed it improperly (wrong category, wrong purity, whatever...) you may be subject to sales tax because the seller did not list it correctly and eBay isn't policing it. 

Finally, why this happens with small sellers and not A-List sellers? A-List sellers KNOW WHAT THEY ARE DOING and small sellers, sorry, they are idiots... they mess things up 24/7.

Finally, I could argue, a buyer needs to vet a listing. But sadly you would have no idea this is a problem because it is so convaluted and requires so much digging. I sell coins/bullion, so I make knowing this stuff my business...but there is 99.999% sure your most likely culprit in the end.

Thanks for your time and again since this apparently wont help you I'm hoping this helps someone else

[ajs_coins_and_alchemy]

Before anyone argues it's a clad quarter and .75 fine because thats still legal tender but sure we are talking bullion so let me find a 90% silver coin (legal tender but not bullion grade).

I found a 90% foreign silver coin. Totally not subject to tax under law, listed under the bullion category it doesnt meet purity standards for bullion as its only .900 fine (and listed as such), eBay doesnt realize it's a foreign coin and not subject to sales tax under IL law... they wanted to charge sales tax on that item too. Again. EBay isn't at fault. They don't know what it is you are selling. They require the seller to list it PROPERLY. Because of this, the buyer is stuck paying unnecessary sales tax because the seller didn't fulfill their duties. EBay is not liable for this mistake, they work with the information they have. And again, big dealers don't make these sorts of mistakes... small sellers do. Not bashing small sellers, as I am a smaller seller, but I'm aware enough to avoid this pitfall.

[hajnick]

Stupidity is sometimes more dangerous than dishonesty. 

[downunder-61]

I believe you may be over thinking things - most regular coin buyer's/collectors will be fully aware of the laws of the state they reside in regarding sales tax.

[hajnick]

Thank you for your inquiry. The proof sets I am referring to are 2000, 2004, 2005, 2006. Believe it or not, these clad proof sets sell, dealer to dealer, for less than face value! I go to coin stores in my area and they make me offers below face value. I just sold a dealer almost all my clad proof sets for face value. The dealer did me a favor because I sold him my ASE. Actually, some went for more like $3 per set. I bought these for $21.95 a piece. I sold most of my clad proof sets for approximately face value or a little more or a little less. Bottom line, whether you get $2 or $3 a piece, it is a shame when U.S. mint sells them to the public for  approximately $22 a piece. I may still have a few that I will sell for face value. But eBay and PayPal charge fees and tax and I have to pay shipping. You will be better off not buying clad proof sets. Don’t even buy silver proof sets. Proof ASE is the best for collecting; all based on my recent experience selling my coins to dealers. Sincerely, Nick

[beyejeffr]

If a coin is sold as a collectible, meaning more than the stated value, then it is not considered legal tender and is subject to tax. The only organisation that can sell coins online without taxes is the US Mint. All others are required to pay some sort of tax when shipping to other states, sometimes even the same state. When you earn any profit on the sale, or sell it as a collectible, it is being sold as an item and not legal tender, and is subject to tax. 

Edit: just confirmed this with a I.R.S. agent. They sent me this information: 

If you make a profit from selling your coins or precious metals, it is considered a capital gain. This requires IRS Form 8949 (Sales and Other Dispositions of Capital Gains). It is irrelevant whether or not you received a 1099 (B). You are required to report the sales or exchange of a capital asset not reported on another schedule when you have a gain from the conversion of capital assets not held for business purposes. Schedule D is used to figure out the overall gain or loss from transactions reported on Form 8949.

Precious metals include gold, silver, coins, and stamps. If you own previous metals for more than one year it is considered a long-term capital gain and the gain is subject to the 28% tax rate. If you owned your previous metal for less than a year, the gain is subject to the ordinary income rate, the same as your wages would be subject to.

If you paid a transaction fee to purchase the coin, then this would be subtracted from the gain amount. Other expenses that may be deductible include grading fees, travel to coin shows, storage costs such as a safe to protect your coins to list a few. Deductions are listed in your Schedule D.

[mam98031]

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@farmalljr wrote:

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@mam98031 wrote:

It is possible that those places pay the sales tax for the buyer as part of their service.  It is unlikely that the state allows them simply not to pay the sales tax as that would be against the best interest of whatever state is involved.

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It is not LEGAL to charge sales tax on bullion in MY state. Your assumption that dealers are paying it, is WAY off base. No dealer is paying your sales tax, EVER. 

Some states tax it, others do not. My state does not. So ANY purchases I make in bullion is not taxable. Doesn't matter if I buy it on eBay or I go to a local dealer. It's NOT taxable. 

eBay is ignoring that and taxing every sale, unless it's from one of these large dealers. I have no idea why this is, but my assumption would be because these dealers are diamond level sellers, and they have a contract with eBay. Small sellers do not, and it is a way to encourage buyers to avoid small sellers and instead buy from these LARGE dealers. 

Joke is on eBay though, I buy direct from dealers now. Because eBay refuses to properly charge tax or not charge it in my case, they get nothing from the sale now. I have ZERO problems buying direct. They all seem to get the sales tax thing right, where eBay can't seem to. 

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Slow down and re-read what I said.  You are making assumptions that I did NOT.

If your state doesn't allow for sales tax on these items, then if the seller is listing their items in the correct category, you won't be charged sales tax.

If you are the seller and you ship these items into a state that DOES have sales tax on these item, then Ebay is going to charge the appropriate sales tax.

It isn't anymore complicated than that.

And my post you responded to was not addressing shipping into states that have NO sales tax on these items.  So you need not have any concerns about what I stated.

[bobbyg]

As a former collectible coin buyer on ebay I completely understand where you're coming from. I live in FL and for a while ebay was correctly not charging me sales tax on my coin purchases after our state had joined the ranks of most other states in collecting taxes from marketplace facilitators.  Then out of the blue sales tax started appearing on my ebay invoices for the same coin category that I had been previously buying from tax-free. I guess enough of us FL buyers complained to ebay that after about a month or so the sales tax glitch/bug was fixed and my purchases in that category reverted back to excluding sales tax.  Fast forward about a year later and once again I made a coin purchase (same category) where ebay wrongly included sales tax.  That was my last coin purchase on ebay.

I have bought numerous coins from other venues such as Heritage Auctions and Great Collections and have never been charged sales tax for these coins so I know some companies can be trusted to consistently handle it correctly - ebay is not one of them.

A simple search on "coin sales taxes" on the community boards might enlighten a number of the posters on this thread. 

[farmalljr]

Yup, you get it. Most responders here haven't. Like every other subject, many don't understand the situation and just start rambling word salads that are very UNinformed opinions. 

I quite buying bullion here for the same reason. I should not have to hassle and wait for a refund of illegally collected sales tax. Because this has been an issue for so long, I believe it's on purpose. Like you stated, they fixed it once, then reverted back to charging it wrongly again. Pretty sure that is the root of the OP's problem. Buyers know their state laws and get upset when charged tax when none is due. 

[farmalljr]

You apparently have not read my responses. You are making assumptions of the situations I explained. 

What state the sellers resides in means nothing on the sales tax issue. At least as far as eBay is concerned. It's all on the buyers state. I live in a state where bullion isn't taxable. I only used to buy in the bullion category. I was charged sales tax several times. It's not a seller issue with listing. It's an eBay issue with non compliance. eBay was and likely still is, illegally charging sales tax when none were due.

End of story. I have personally experienced it. Many others have too. You explanation does not make those situations disappear or explain them away.  Not being a jerk about it, simply saying many posters here don't understand the situation and have little to no experience with it. Everyone finds it easy to blame the seller for doing something wrong, and sometimes they do. But in all of my own situations, that was not the case. It was ALL on ebay. 

[soh.maryl]

Yes, one would have thought so, but we have evidence, via this thread, that this isn't necessarily the case.  

[lonebuck-books]

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@hajnick wrote:

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 I just want eBay to stop charging tax on eBay coin sales because it is not necessary if the seller lives in Illinois. I am not sure how to stop eBay from doing that.

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Sales tax is based on where the buyer lives, not the seller.  If you live in a state that collects sales tax on coins, you pay for that tax.  Don't like it, start lobbying your political creatures to change the sales tax laws in your state.  As for stopping eBay from "doing that", you won't.  They are required by law to collect it.