How is that fair in a country like the USA?
You sell your personal stuff online, buyer pays taxes, you sell your personal stuff in events like this sponsored by the town, and buyer doesn't have to pay taxes? and seller doesn't have to report it, on top of that marketplaces charge you a commission on the tax.
Is it ok to enforce the taxes for online shoppers but no other shoppers of the same item?
The law should be applied in the same manner to everyone.
Once the taxation authority figures out how to handle personal items taxation for all, then they should apply for all and not target segments. It is unfair the way it is now.
14 comments
joels-retrocade
·3 years agoPretty hot take there lol. You want people to pay taxes buying like a 5$ toaster at a yard sale? That's gonna be a hard no from every single yard saler on the planet bro. If you think that's bad it will probably disturb you to know that 55 of America's largest corporations payed Zero dollars in income tax in 2020. Maybe they should focus on that problem rather than taking out the old granny buying an old mug at a yard sale lol.
luckythewinner
·3 years agoyou sell your personal stuff in events like this sponsored by the town, and buyer doesn't have to pay taxes?
In many states a buyer does not have to pay sales tax when the sale is considered the equivalent of a garage sale. But in many states, the buyer is still required to file a return and pay a use tax (although no one ever does).
and seller doesn't have to report it
The seller is usually supposed to report income, but like income tax compliance is up to the seller (unless another law like the 1099-K law requires another entity to report it on the seller's behalf).
How is that fair in a country like the USA?
Because the USA is not fair and no sensible person would claim it is. If you have an issue with the fairness of taxation and income reporting, you need to bring it up with your elected officials.
blurryrobot
·3 years agoPennsylvania is in fact double-dipping at present, since they still have the "use tax" item on the PA-40, which must be calculated as a percentage of income, or by laboriously adding up all your untaxed purchases from Ebay and lesser online marketplaces...which, let's be honest, practically no one ever does, so most people go with the income-percentage.
I thought this would go away when PA got their "internet sales tax" but lo and behold, it didna. Which probably should not have surprised me all that much!
az93
·3 years agoMake enough noise and you will be paying even more taxes. Just to be fair. The ebay fees are for processing an distribution to the buyers state. No one is stopping you from asking what state your buyer is from. Ask, keep records and fill out all the forms. Just to be fair in a country like the USA.
m60driver
·3 years agoThe only shoppers who don't pay sales tax are those who buy direct person-to-person at a garage sale. Some estate sales are run by the family and they do not have to collect sales tax. Yet, if an estate sale company runs the estate sale then they do have to collect sales tax. And of course every brick and mortar stores will collect sales tax. So the taxes are enforced on the vast, vast majority of shoppers.
pburn
·3 years agoAccording To the Pennsylvania Department of Revenue, sellers at flea markets must obtain a sales tax license and must collect sales tax from buyers on any taxable purchases.
Do I need a sales tax license when I host a yard sale?
However, if you take taxable items to a flea market or someplace where you are competing with other vendors, then you will need to collect Sales Tax and you therefore need to apply for a Sales Tax license.
Taxable Income Rules
The IRS may consider income from a garage sale as taxable income depending on the sale price of your goods. According to the IRS, if you sell your personal possessions at a yard sale or flea market for less than the original purchase price, the the federal government requires no tax payment. Your participation in a yard sale or flea market should be sparse and not a regular component of your income earning over the year. Regular participation in a flea market may require you to claim profits as business income on your federal taxes.
Selling at a Profit
Selling your possessions at a flea market or yard sale for more than you paid for them usually requires you to claim the profits as business income. This usually occurs with possessions known to appreciate in value, including collectibles, sports memorabilia or artwork. According to the IRS, you must claim profits of $400 or more from the sale of appreciated assets as taxable income on your federal return using IRS Form 1040 Schedule C. Failure to disclose this income could cost you additional tax penalties in addition to an IRS audit.
Organized flea markets generally charge fees for each vendor for the opportunity to set up a booth at the venue. It is often assessed based on the size (in square feet) of the space allotted for the booth.
caldreamer
·3 years agoYou do pay "sales tax" at flea markets (vendors just include that in pricing). Many states also require that you get a "business license" to sell goods at the flea market. Vendors are required to report income to the State and IRS (of course, it is harder to enforce...because IRS has no idea how much you sold with cash transactions).
inhawaii
·3 years agoSomeone correct me if I'm wrong, but even if you sell something at a flea market or swap meet, you are still required to report those sales.
downunder-61
·3 years agoAFAIK yes, but how to police those pop up sort of places, especially when dealing in cash only
pburn
·3 years agoHere--and I speak very generally of the USA--organizers of flea markets like the one the OP has illustrated are pretty careful about following any state and local regulations. If it's an organization like a township (in this case) or a bona fide charity or whatever, these kinds of events usually involve a lot of advertising and community support, so they're very careful about following state and local guidelines. Vendors often have to have a sales tax license and comply with all applicable laws. These kinds of high-profile local events call a lot of attention to themselves, as well as wanting to perhaps have annual events, so it's in their best interest to comply with all regulations. They probably require every vendor to provide a sales tax certificate for their event records.
pburn
·3 years agoIn regard to flea markets and similar events in Pennsylvania, promoters of "show" venues, as well as vendors, appear to be pretty highly regulated:
What is a Promoter?
What are the Promoter’s responsibilities under Pennsylvania Law?
Maintain records of the date and place of each show, including name, address and Sales Tax license number for all vendors, for three years, unless shortened or extended by the Department.
Not allow anyone to display for sale or sell taxable tangible personal property or services unless the vendor has a valid Sales Tax License.
What is the penalty for a promoter who allows an unlicensed vendor to operate at a show?
Is a Sales Tax license necessary to sell taxable items at craft shows?
Yes, all businesses selling products and services subject to sales tax are required to obtain a Pennsylvania Sales, Use and Hotel Occupancy Tax License.
rosachs
·3 years agoTaxes are the fee that keeps on giving! 🙂
To address the OP's main quandry -- paying taxes in the US is 'voluntary'. The IRS is not just a collection firm for reported income & tax, but also the enforcement arm to ensure everyone is volunteering their sales data and income tax properly.
However, the IRS knows how to do math. They know how much it costs, per hour, to investigate a claim of unreported income, and how much it that claim could possibly generate is back taxes, penalties, and interest. If what they can collect is greater than what they would expend, it's on the list. If it's massively greater, then the investigation begins.
The IRS doesn't worry about folks having a garage sale once or twice a year -- as stated, they are generally selling for pennies things they spent dollars to buy. The money generated by enforcement would be a very small fraction of the cost of investigating and processing that unreported income. So they give it a pass.
If you are buying thrift to sell at your monthly yard sale, then the IRS is more likely to be interested. Here you are buying low and selling high, generating income. And you are doing it on a regular basis - you are not clearing out a closet, you are purposely buying things to resell them for a profit. That's what they call "commerce" and income generated by a business, by commerce, is more interesting to the IRS than someone selling lemonade on a street corner.
So, yes, you are supposed to report any and all income annually, and pay the proper income tax on the net amount. But getting to that net amount requires you to keep track of the expenses that were required to generate that net income. And it can get detailed - especially if equipment is shared between personal use and income/commerce/business use.
Like I said... taxes just keep on giving..... opportunities to do right or do wrong. 🙂
-Bob.
susanb1872
·3 years agoYou only have to pay taxes if you make a profit-meaning if you sell above your cost. If people are truly selling items that have been sitting around their house and garage, they are probably selling these things below their original cost and the taxing authorities are not concerned. If they are resellers or purposely selling new items and making profits then taxes are in order. But as you said, hard to get caught at a flea market situation.
stephenmorgan
·3 years agoThe big difference is that sales on-line are very easily traceable making it easy to assess taxes on the sales. If there was a way to trace all yard sales and such, they would be taxed also.