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Help with illegal sales tax being charged.
I just sold a coin to a buyer in Texas. He then messaged me this.
"This purchase charged me tax. Coins like this are not taxable in TX. I should get a refund . TL"
What do I do? eBay should not have collected sales tax on this item. I don't want to give him a refund because I did not charge him the tax, eBay did. Thanks for the help.
35 comments
kh-stanley1
·11 months agoHi everyone,
Due to the age of this thread, it has been closed to further replies. Please feel free to start a new thread HERE if you wish to continue to discuss this topic.
Thank you for understanding.
jsr40
·11 months agoYou should ask the buyer to ask for a refund from eBay AND you should then ask eBay to refund the eBay selling fee that was based on the sales tax collected. In my opinion, based on my wife's non-business eBay account history with buying coins, she is charged sales tax on roughly half of her coin purchases, all of which were correctly categorized by the sellers...my wife called to get refunds and she kept being asked, by eBay, to set up her account as a business account...that is the WRONG answer. I believe eBay is collecting sales tax in a way that is illegal or at a minimum in a random way, and they appear to be hoping that buyers do not call for refunds, and even if they do, I wonder if eBay is keeping the selling fees that are based on the incorrectly-collected sales tax. Sellers should NOT refund the tax!!!
continentalcollectibles
·2 years agoEven though the tax was charged to your account ,You did not receive the funds. eBay took it out of your funds before they transferred Your money to you. The buyer is the aggrieved party here and should take it up with eBay .Personally I prefer eBay being in charge of the tax, Being in business for over 55 years I can't tell you how much a headache collecting and remitting the taxes to the State Revenue Department can Be. If you have ever gone through a Revenue audit you know what I'm talking about. this was taxable this was not this buyer is tax exempt this buyer is not, this buyers resale certificate is invalid on and on the problems go. Its one less headache we have to concern ourselves with and its easy to tell they buyer that its eBay they need to contact and if you can assist them you will
lacemaker3
·2 years ago@copper.eagle,
Your buyer appears to be mistaken. The items you sold on Aug 18 (USA coins and bills) would be considered currency (or legal tender) under the Texas state law. The Texas sales tax exemption applies to precious metal ingots, bars or plates; gold, silver or platinum bullion; and "numismatic coins" which means coins that are NOT currency or legal tender. The definitions are shown below.
Sales of currency are not taxable in Texas ONLY IF the exchange is made at an exchange rate (i.e. at face value) AND IF the exchange rate is shown on the invoice, which is not the case for eBay sales.
ajs_coins_and_alchemy
·2 years ago@lacemaker3
Sorry but you 100% completely blatantly misinterpreted what you read. The "currency exchange" and "exchange rate" is literally those of physical BRICK & MORTAR CURRENCY EXCHANGE locations where you walk across the border from Mexico and cash in your Pesos for US Dollars... that involves an EXCHANGE rate between two currencies (foreign & domestic).
The pennies the OP sold are indeed classified as numismatic coins... the sale of pennies is not a "currency exchange" ... You could argue the very most basic comprehending that I am exchanging this dollar bill to buy your penny, both being legal tender & currency, the penny is still a numismatic coin, and covered under the law.
Did OP ever confirm the tax was applied to the pennies they sold? There was a "Lincoln Coin" which was actually a medal, falls under exonumia, and its taxable. You sure this isn't all just an issue over that and that is what the buyer is mistaken about?
kalyoth
·2 years agoAs others have said, but perhaps not as clearly, you likely will face refunding the sales tax because, through your action in creating the listing & choosing the category to list it under, you defined ebays response to & liabilities from - the transaction in compliance with relevant tax law. Do not be surprised if ebay assesses any refunds directly from your funds as the seller is 100% solely responsible for this occurring.
The fact that you did not collect or receive the sales tax is irrelevant because the seller created & completed the entire defined event known in the law as "the transaction" & that is the contract your locked into.
mam98031
·2 years ago@kalyoth
Ebay can't do that. The seller NEVER had the sales tax money. It has always been with Ebay so they can process it to the appropriate state. Sellers are NOT responsible for sales tax, EBAY is.
What you describe is completely WRONG. And it would be illegal for Ebay to keep the money and force a seller to refund sales tax. Ebay isn't going to risk that to save a few pennies.
You are welcome to believe as you will, but this is not how it works.
kalyoth
·2 years agoHaving been on the other side of this, ebay CAN and will do it. You can seek a refund from ebay afterwards of course & generally are granted it. You usually receive the standard - "this situation resulted from your selection of an improper category. In the future, please investigate & utilize the proper category & sub category to avoid this."
ebay does not seem to function like a modern institution. It is a very dated one, broken into many smaller parts & managed all over world with certain focuses. They work to make customers resolved based upon information provided to them, to the goal of a profit. For the dollar amount in question, ebay rolls the dice & waits to see if someone comes looking for it more times than you want it to happen.
If ebay was an actual bank, vs. a payment processor, we also would be entitled to interest upon all that money.
mam98031
·2 years agoWe should just agree to disagree.
ajs_coins_and_alchemy
·2 years agoAs mam pointed out, this is blatantly false.
Best way to handle this, if it truly was an issue of seller's listing, would be to re-list the item properly and have buyer repurchase. It's not hard to do to cancel a sale and have it repurchased under a correct listing that won't apply sales tax.
ebeths_eclectic_collectibles
·2 years agoAll the comments here are interesting regarding tax law, coins and Texas but now matter how you slice it and dice it the issue at hand is still between the buyer and eBay.
ajs_coins_and_alchemy
·2 years agoEhh, not really, how bout I slice and dice the issue this way?
Buyer CAN go to EBAY since EBay collected sales tax... but EBay will point finger at seller and say "the way they listed it, its taxable".
So... is buyer correct and the item should not be taxed per their state law? Or is buyer mistaken?
Can't fix or argue with a mistaken buyer... but sellers do mess up their listings and sales tax is applied incorrectly at times. I found a silver coin collection that was placed under the "novelty coins" category incorrectly, and asked the seller to fix the listing so I didn't have to pay $40+ sales tax for no reason. In that case its between me and seller.
If the item is truly not taxable... it's LIKELY on the seller and the seller's mistake. However, sellers often don't realize this, know how to fix it, and won't be able to. If the item IS taxable and buyer is wrong, what can the seller do? Nothing.
So, yeah, push the buyer off on EBay, probably easiest for seller and buyer can blame EBay but an astute buyer can likely get to the bottom of the issue and get it resolved with the seller. Unless of course the buyer is wrong and the item is taxable
dogchow747
·2 years agoI live in Texas and pay sales tax for "collectable" coins all of the time.
Is it only certain instances with silver bullion or bulk coins? (like mint bags of nickels etc)
I would have to look it up again.
ajs_coins_and_alchemy
·2 years agoAccording to Texas State law, there is no sales tax on gold, silver or numismatic coins ... and no tax on gold, silver or platinum bullion.
Could you please provide a couple examples of collectible coins you've recently purchased where you were assessed sales tax?
dogchow747
·2 years agoI will look in my history tomorrow and reply here.
There is a ebay dealer I buy from in Houston occasionally.
I am pretty sure I pay sales tax. I am not sure how ebay can sort out if I buy a US silver half dollar (Maybe no tax) or a Canadian Large cent (Seems like tax). I read it one time and there were minimums to avoid scammy behavior. Smaller dollar transactions are hard to monitor.
I thought anything that was bought for anything higher than face value was considered a collectable value.
If I buy a roll of pennies at the store for .50c - no tax. 1957 pennies at coin store for $5 roll-tax.
I will look tomorrow when I am a little more bright.
ajs_coins_and_alchemy
·2 years agoCan't say what is done at coin stores, but EBay uses categories for classification and tax assessment, and for some cases uses listing details within category like i said about commem's category.
ajs_coins_and_alchemy
·2 years ago@dogchow747
This month alone I have 10 orders placed by buyers in the state of Texas... Not a single one paid sales tax.
This includes:
-90% Silver Commemorative Dollars [Modern/Clad Commemorative Category]
-.999 Fine Silver Commemorative Dollar [Modern/Clad Commemorative Category]
-Clad Proof Sets (2000s) [Proof Sets]
-40% Silver Proof Sets (1968-1970) [Proof Sets]
-90% Silver Proof Sets (1960s) [Proof Sets]
-90% Silver Uncirculated Mint Sets (1960s) [Proof Sets]
-Silver graded Franklin Half [Franklins Category]
I've only ever seen taxes on non taxable items in the commems category which I find if it's not listed correctly with certain specs on the listing (not sure which specs trigger tax/no tax... may be composition, denomination, fineness, or other). I've become very careful to list in such a way to try to ensure no tax on non taxable items but I face it with buying often when it shouldnt be (not listed carefully)
dogchow747
·2 years agoHey, I believe you!
I am not a expert on this in any way.
If I buy coins from different areas of the country, I may or may not pay sales tax there.
Same on books or light bulbs.
One thing I can say I like about being a Texan, no state income tax ( I paid when I lived in Colorado! )
We pay sales tax on most things. We get breaks, but it is limited.
It seems what we are discussing is cross state tax, not Texas resident tax on items bought in Texas?
Cheers
mam98031
·2 years agoSales tax is ALWAYS determined by where you are having the item shipped to. If it is directly to you, then the laws of YOUR state determine how much the sales tax is no matter where it shipped from.
ajs_coins_and_alchemy
·2 years agoI give up trying to explain it. Clearly it ain't working.
r_lresale
·2 years agoSorry I guess I confused this terminology to mean that the coin has to be bought from a seller in texas (even on the internet) or stored in texas to get it tax free.
Texas is one of many states that does not tax the sale of numismatic coins or gold, silver or platinum bullion. That means buyers do not have to pay the tax if the precious metals are purchased from a Texas precious metals dealer — either through the internet or over the phone — and not shipped to a state that has a sales tax. In this situation, sales tax is not applicable as the precious metals did not leave the State of Texas.
ajs_coins_and_alchemy
·2 years agoThat may be verbiage that pre-dates the WayFair V Dakota (I have that right??) Decision as states only goverened sales made within their own state and not interstate?
Or that's an analysis that is not all encompassing.
Those are the things that make sense to me for it to be written in that manner. Doesnt seem to be law but an analysis of law and may predate current law.
mam98031
·2 years agoYou first need to understand that sales tax is paid by the buyer and the sales tax rate is determined by WHERE the buyer takes possession of the item. It has NOTHING EVER to do with where the seller is located when talking about an internet sale. Whether or not sales tax is owed has NOTHING to do with where they seller is.
For example if a buyer purchased a Book from a seller in Ohio and had it shipped to them in Texas, the buyer would pay the appropriate sales tax for Texas where they received the item.
The same with any other products.
If something is non taxable in the state you plan on having it shipped to, then the Seller of that time MUST have it listed in the correct Category on Ebay. Ebay sets up and maintains various state taxes by Category, they can't possibly do it by listing as there are well over 2 Billion of those.
ajs_coins_and_alchemy
·2 years agoIt does go a bit beyond category in some cases where certain listing specs/details (the fillable fields) determines tax liability beyond simply umbrella category, it gets a bit nitty gritty, but your statement stands for 99+% of situations.
r_lresale
·2 years agoIf the coin is sold in texas or online by a texas seller then no sales tax. If the seller is not in texas and/or the coin is not stored in texas then sales tax rules for the state of the seller or marketplace rules govern.
soh.maryl
·2 years agoNot exactly sure where you got your information, and not at all familiar with Texas law or the sale of coins. However, would like to point out that the state sales tax in every case is based on the state where the item is delivered, not on the seller's address or where the coin is "stored".
If you have information contrary to the above, please return and post it.
Thank you.
mam98031
·2 years agoThat is not how sales tax works. It does NOT go by where the item is being shipped FROM, in this case a seller, it MATTERS where it is being shipped TO, the Buyer. The sales tax is due by the rules of the state that the item is RECEIVED. Sales tax is a tax paid by buyers in EVERY state that has sales tax.
@r_lresale
ajs_coins_and_alchemy
·2 years agoAs someone who sells coins, lives, stores, and sells from a state that does NOT tax coin purchases, and sells/ships to states that DO and DO NOT tax coin purchases (I've sold/shipped to TX more than enough times), will reaffirm soh.maryl & mam are correct ... I've got buyers who pay tax and those who don't. The buyer's state law governs.
________________________________________________________
Long portion below is because I feel very strongly about this very "murky" area within the application of sales tax laws applied by EBay as I believe they are applied incorrectly at times and make it difficult for sellers to "conform" to meet the standards set forth to have tax liability applied correctly.
However, I will add the caveat that the "marketplace rules" do have some effect.... although it's legally governed by state law, the marketplace (EBay or other) does have to apply that state law, and in order to do so they have certain settings/criteria (filled in/completed/provided by the seller in the listing) to determine the tax liabilities or lack thereof. Of course an aggregious mistake such as listing in the wrong category is truly the fault of the seller... However, as I mentioned here and many times before, the purchase of Modern Commemorative coins are not taxable in the state of IL as they are legal tender, but EBay determines taxability by the info supplied by the seller, and certain details included (or left out) in the listing will determine the tax liability or lack thereof. So technically it's the seller's fault if they don't list it "correctly" but it's difficult when it's a guessing game since EBay is not transparent about precisely what settings/details are the trigger points. Is it the "Denomination" field? "Composition"? "Fineness"? I wish they had a field for "Legal Tender (Yes/No)"... i feel "Legal Tender" (Yes/No) would be a simple and sufficient "test" for tax liability to meet the requirements set forth by law, but I am not a lawyer... so what do I know? LOL.
ajs_coins_and_alchemy
·2 years agoLincoln "coin" medal? Listes under Medals/exonumia ... taxable.
Wheat pennies -- currency -- should be non-taxable.
Questioning the Mexico reales coin... guy is from TX so maybe he is into Mexico coins... shouldnt be taxable but not familiar with TX state laws.
IL here. I find SOME commems (modern silver/clad) is taxed and some isnt. I THINK it has to do with if a denomination is given in item details/specs? Havent quite figured it out yet what exactly makes some taxed and some not. None should be (all legal tender per US mint so not legally taxable) but EBay's commem category is tricky to "list correctly" and ensure 0 sales tax.
inhawaii
·2 years agoYOU didn't collect tax from him, ebay did.
Take it up with ebay.
"If you would like to cancel the sale for a full refund, just let me know."
mam98031
·2 years agoThis comes up a lot in coins. Ebay is responsible for collecting and remitting sales tax according to the laws of the state your buyer has the item delivered to.
Ebay does NOT review listing by listing to determine what is taxable, they go by category. So if you as the seller had it listed in the wrong category that can cause this problem.
Or the buyer can be mistaken.
Or the buyer had you ship the item into a state that has a different tax rule.
Your buyer needs to contact Ebay. It is Ebay that will refund them if there is an error. But the buyer needs to keep in mind that Ebay just goes by the rules for the state the item was delivered to.
rseuqinh
·2 years agoIf Texas doesn't get a sales tax refund from eBay (they won't) then proceeds to a payment dispute against you at eBay* by filing with PayPal or their card issuer, come back with an update?
*eBay will expect you to refund the sales tax @copper.eagle from funds you did not receive.
lepke1979
·2 years agoHe needs to take it up with eBay.
wastingtime101
·2 years agoWhich coin was it @copper.eagle ? If it was one of the penny listings, I think that's taxable due to the copper and palladium element of the law.
Either way, you have no part in collecting or remitting the tax so if the buyer has an issue they can either:
Take it up with eBay CS https://www.ebay.com/help/contact_us?id=4002&st=10 or take it up with the state of TX https://comptroller.texas.gov/taxes/sales/refunds/
eBay collects and remits tax per the buyers state requirements could be for purchase and shipping or tax on just shipping. If the item purchased isn’t taxable then the buyer needs to address the issue with eBay since sellers don’t collect that tax.