Sales Tax... can be refundable for purchaser buying used goods previously taxed

[niteprowler]

There is a lot of misinformation about sales/use tax paid on items purchased on eBay.

In most states the casual (non-business) seller is not required to collect sales tax from the buyer.  eBay, having no way to know this, is acting as an agent and collecting tax for every state as if every sale is taxable.  eBay may be able to handle these sales differently, but they are not going to go to the trouble of acting in the favor of the seller/buyer.

Many states allow a credit for sales tax paid by a buyer of a used item on which tax was previously paid.  This credit can be refundable and usually requires the buyer file a return to claim the refund.  This prevents double/multiple taxation for sales taxes already paid on an item by a prior purchaser.  These rules vary by state as do the technicalities of filing for the credit or refund.

A good synopsis here (https://www.wolterskluwer.com/en/expert-insights/sales-and-use-tax-foundations-refunds-and-credits) provides a brief outline of each states regulations and requirements.

[gone.c-33]

You never mentioned wholesalers/resellers in your OP. In fact you didn’t bring them up until post 18.

Of course those buying on eBay for resale can submit a tax exemption form.

But none of what you’ve posted applies to buyers paying tax on items purchased for personal use. Almost seems like you moved the goalposts once your initial premise was debunked.

[stainlessenginecovers]

'Sales' tax is a 'transaction' tax- so EVEN if used, it STILL gets taxed by the 'new buyer' almost 90% of the time.

Just look at 

Used Car Lots

Antique Stores

Thrift Stores

to name a few. 

For those that have Resale Licenses- there is a program to submit that to ebay. 

[niteprowler]

No... I just felt that it would be appropriate to point out another area where people are paying taxes that they are not legally liable for.  

My first comment was simply because it potentially affects every buyer buying used consumer goods online... eBay or otherwise where the original purchaser has already paid sales / use tax.  

The litany of further comments made it clear to me that many are not even aware of resale exemptions when purchasers pay tax on inventory they buy to resell.  Vendors (or eBay as an agent) collects sales tax from the end purchaser and the reseller is due a credit or refund for the tax they paid on their original purchase.

[niteprowler]

   Most retail sellers and/or businesses already have a state tax ID which many have provided to eBay and they do not pay sales taxes on their purchases. Others simply roll it into the COGS and take it off at tax time. 

This is exactly right... but not everyone knows every aspect of tax law.

" You really need to read the Supreme Court Decision as well as the specific text of your own link. Following is the link to the courts decision. For all practical purposes eBay or any other ecommerce provide is considered to be the merchant of record. "

Practical...  go read eBays own info page about their collection of sales taxes FOR vendors (and unless you let them know of any specific exemption which applies) FROM every buyer.

[niteprowler]

Wrong again.

[niteprowler]

You only lose by not educating yourself.  Fine by me.  I don't have a dog in this fight.

What I have posted is fact.  Read and learn.

[gone.c-33]

Please give one source that states that used items are not subject to sales tax unless they’re in an exempt category such as clothing in certain states or are sold by a charity or another tax exempt organization.

[dbfolks166mt]

No... I just felt that it would be appropriate to point out another area where people are paying taxes that they are not legally liable for.  

My first comment was simply because it potentially affects every buyer buying used consumer goods online... eBay or otherwise where the original purchaser has already paid sales / use tax.  

The litany of further comments made it clear to me that many are not even aware of resale exemptions when purchasers pay tax on inventory they buy to resell.  Vendors (or eBay as an agent) collects sales tax from the end purchaser and the reseller is due a credit or refund for the tax they paid on their original purchase.

     You are diverging WAY off of the topic of your original post. Resale exemptions are totally different from the exemptions discussed in your original link. Your responses are an attempt to justify your original post with unrelated scenario's. As my father used to say when you find yourself in a hole, stop digging.

    How may of the items you have purchased on eBay have you filed a claim with your state to recover the sales tax you paid on a used item? Did you buy those for resale or personal use? 

[niteprowler]

There are two separate issues... which I did not want to conflate.

Fact 1:  End purchasers of used goods are not always (usually) liable for sales tax on their purchase.  eBay can't make that determination and collects the taxes accordingly.  It leaves the task of claiming a refund up to the buyer and the states provide mechanisms to file a fairly simple form to claim their credit or refund.

Fact 2: Purchases for resale are generally exempt from sales/use tax (and, no, it is NOT a transaction tax) and such resellers can generally file an exemption certificate to prevent payment of sales taxes on items bought for resale. 

Fact 3.  There are other categories of purchases which may be exempt from sales/use tax.  eBay mentions this in their brief statements about collection of sale tax.  These exemptions vary by state.  It pays to know the laws.  

These are generalities as every state has their own tax laws and procedures... but the above is almost universally the way states handle sales tax.  

Someone mentioned motor vehicles...  Well, newsflash, some states consider tax on motor vehicles as a "privilege tax" and not a sales tax... thus "legally" taxing the sale of the same vehilcle multiple times.  Those taxes are usually collected by or for a states "Department of Motor Vehicles"... terminology varies by state.

Finally... for anyone who doesn't care... they can eat it as a cost of doing business if they like or just ignore it.  The states which collect those tax dollars thank you for not claiming your refund.

And...I really don't care if you want to believe what the laws actually require and what they don't.  Don't believe me.  I don't care.  The facts are facts.

[mintsfmintsf]

A regular business that is buying new inventory will generally get a tax exempt number from the state so they don't pay taxes on items that they will resell and taxes will be collected on then.  Most small sellers are not set up as a business and never get that tax exempt status for their purchases so in that case they may have paid a tax on the item when purchasing it and the state will collect tax again on the item, unless it is a non-taxable item to begin with.  The rules vary from state to state and eBay does a great job of sorting most of these rules out for sellers so they don't have to.

[niteprowler]

No... you won't "lose every time".  Are there some hoops to jump through for some of these refunds or credits?  Yes... we're dealing with state governments.   You decide... if you are paying a significant amount of taxes that you are not legally required to pay... whose pocket that money belongs in... and whether it is worth it for you.  For resellers, online merchants/marketplaces usually provide the means to claim your exemption from tax on purchases you make for resale... as well as exemptions for other categories of buyers.

Depending on your state... the purchase of items for use in specific categories of qualifying businesses (like farm use in some states) is exempt from tax.

Vendors in the brick and mortar world deal with these issues every day.  Marketplaces collect taxes by default.  It is up to the resellers and buyers to file for exemption or file for refunds where applicable.

Again... buy a $ 5000 guitar second-hand and you are likely entitled to a refund of the tax you paid... if the original owner or subsequent owner have already paid sales tax on it.

[niteprowler]

https://www.ebay.com/help/buying/paying-items/paying-tax-ebay-purchases.html?id=4771#section2

eBay, in its limited advisory capacity, informs buyers/sellers of some of the sales tax issues on the above link.

[gone.c-33]

Control+F for the word “used” shows no results in the entire page that mention “used goods”.

[niteprowler]

You apparently do not understand what you've read... or have not gone to eBay's own information page about taxes... or read any pertinent information.

eBay is acting as an agent.  Buyers and sellers may be exempt from taxes on purchases.  It's up to you to know what you are and aren't entitled to.  I'm just telling people that many purchases may not be liable for any tax on certain purchases for certain reasons that I've enumerated.  

It's up to you if you want to know when you may be exempt from the tax that eBay has collected... and if you want to pursue getting your money back... or avoiding paying it to begin with.

Again... I would point you first to eBay's own tax information pages and then to learning the actual cases which make some sales/purchases exempt from these sales and use taxes... (terminology used may vary, but sales tax is what it effectively amounts to).

[niteprowler]

I'm done.  If you know everything and find out after the fact otherwise, at least I have told you the facts.