Tax exempt purchases assess sales tax on shipping charge

[let_me_shop_and_no_one_gets_hurt]

Yesterday and today I bought US coins, which are exempt from sales tax in IL and most other states.  Both of these items had separate shipping costs.  Ebay wants me to pay 7.5% IL sales tax on the shipping cost. 

I've never seen this.  Is it a bug, or something new and correct?

My purchases on US coins with "free"  shipping presumably won't have sales tax so this is probably going to be a nuisance that I may not bother chasing down.

Thank you

[kensgiftshop]

@let_me_shop_and_no_one_gets_hurt 

The item might not be taxable, but some states apply sales tax to the shipping charge also.

[let_me_shop_and_no_one_gets_hurt]

It's brand new to me this month.  I buy coins all the time and until very recently my purchases, with explicit shipping charges, had no sales tax at all.  Half the items I buy have "free" shipping so I'd escape this phantom tax.  

[donsdetour · Accepted solution]

"

In a sale at retail, shipping and handling charges are taxable when:

the transportation and delivery charges are not separately identified to the purchaser on the contract or invoice; or
the transportation and delivery charges are separately identified to the purchaser on the contract or invoice, but the seller does not offer the purchaser the option to receive the property in any manner except by delivery from the seller (i.e., no pick up option is given).

See 86 Ill. Admin. Code Section 130.415 for more information."

Yep your state is getting the tax that is on the books for the shipping. Maybe they got eBay straight on it.

If shipping is involved in the cost you are going to pay the tax on that.

[let_me_shop_and_no_one_gets_hurt]

Thanks donsdetour!   you're probably right about IL finally getting that little bit of extra revenue!

[monroe67]

eBay "wants" you to pay the 7.5% sales tax because, apparently, you live in Illinois and that's the current sales tax rate.  eBay is required to collect these sales taxes, based on the laws of all 50 states.   eBay sends the money collected as sales tax to the proper states. 

Here's a summary of the pertinent law that requires eBay to ask you to pay sales taxes:

"In a sale at retail, shipping and handling charges are taxable when:

• the transportation and delivery charges are not separately identified to the purchaser on the contract or invoice; or
• the transportation and delivery charges are separately identified to the purchaser on the contract or invoice, but the seller does not offer the purchaser the option to receive the property in any manner except by delivery from the seller (i.e., no pick up option is given).

See 86 Ill. Admin. Code Section 130.415 for more information."

I found this on www2.illinois.gov/rev/questionsandanswers.  

[let_me_shop_and_no_one_gets_hurt]

thank you monroe67.  don above pointed me to the shipping specifications.   I've been paying 7.5% on the purchase price and shipping cost of all items except US coins for the last few years.  Coin/currency never had any sales tax, and just this week for the first time I'm seeing sales tax on the shipping charge.  I'm resigned to being nickel and dimed to my grave; it's all good...