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Sales Tax on Coin purchases
Collecting a sales tax on coin purchases is contrary to IRS Code. Why does eBay allow Sellers to
include a tax on the sale of coins?!
1 comment
shipscript
·2 years agoSales tax is based on the recipient's state, not on IRS code. eBay, not the seller, is applying and collecting sales tax based on the local laws in place. Some states only exempt coins and bullion with a specific purity. Some will tax coins that have been modified by coloring or adding a bezel or slab. My state of California will tax coins and bullion under $2000, and exempt purchases above that threashold.
Since the states seem to change there rules every so often, I would recommend checking with your own state sales tax laws to see if there are thresholds, exemptions, and gotchas.
Oh, and I should also mention that eBay applies tax based on the category. If a seller misposts a coin in a collectible category, rather than in a coin or bullion category, eBay will consider it taxable. If you find a seller who has done that, recommend they move the listing to the correct category before you purchase or repurchase. Or, you can contact eBay after the sale and request a tax refund because the coin was in the wrong category.