@wastingtime101 wrote:
@ajs_coins_and_alchemy has the most thorough response for this situation. Tagging them to see if they'll copy/paste that info for you.
Sorry for the delay! Thank you for the tag, @wastingtime101, I'm honored 😀 As mentioned, my response is usually thorough (long), so I have resorted to highlighting the key points amidst the lengthy explanation. This is by no means a "simple" issue and thus doesn't have a "simple" explanation.
Okay @famousnate717. I'm a coin dealer on here, I source almost exclusively on eBay (almost every coin I sell here as been purchased here), I've spent ~$75k on coins on eBay in 18 months and live in Illinois with amazing sales tax exemptions for coins/bullion ... I think I'm qualified to answer this.
First you are absolutely right, your 1987 Constitution Commem Dollar is legal tender and should not be taxed, however, eBay did not recognize this as a piece of legal tender and that is why you were assessed tax.
Let's start with this is not a category issue necessarily ... It is the right category, but it is a problematic category. Others suggested wrong category, that is often a problem, but that would be an example like when I bought some Olympic commem $s listed under the Sports/Olympics Memorabilia category once... that's wrong category.
The problem here is how eBay assesses tax liability. If you buy enough coins on here (or buy enough of anything for that matter), you know there are lots of sellers who do not know what they are selling or don't care to describe it properly. We as buyers are sometimes faced with having to look at the pics and figure out for ourselves what the item is, as the seller's listing is extremely unhelpful. Unfortunately, eBay is not like us. eBay is not going to sit there and stare at the pics and research the item and decide what the item ACTUALLY is and then decide tax liability, and neither will your local taxing authority. eBay (and your taxing authority) will go based off what the Seller lists/advertises, as it is 100% the seller's responsibility. Something listed "incorrectly" may trigger the "incorrect" sales tax outcome.
So, the category is not the "be all, end all" of it. I've bought commemoratives in the commem category where I was charged tax and others where I wasn't and in my experience it comes down to some combo of the item details/item specifics the seller lists. I haven't quite cracked the specific formula of what factors need to be met for eBay to assign tax liability correctly, but my experience says it is likely the Denomination, Composition, Fineness (possibly more). If there was a fillable field for the seller to answer "Is this legal tender, yes or no?" that would probably solve all the issues.
Many sellers do not fill in these fields or fill them in correctly. I believe stating the item's denomination (50c, $1, etc) helps. Composition and Fineness help because even if they don't meet "legal tender" threshold, the modern commems like the 2019 Apollo Silver Dollar is .999 Fine Silver, that meets the bullion threshold and is tax exempt for that reason.
If you asked them, eBay and the seller would point the fingers at each other. eBay is CORRECTLY charging you (illegal) sales tax, and it is the seller's fault, although they have no direct control over the tax, only indirect and are likely totally unaware. (Try to untangle that mess.)
The problem would be solved if eBay just explained to coin sellers what details they need to fill in and how to fill them in to make sure the sales tax is properly assessed/exempted.
Sadly, the end result is the buyer is caught in the middle and screwed with zero recourse other than not buying the item in the first place. This effects my bottom line in my business, and my solution was to simply figure sales tax into my costs so i pay less for commems to absorb the inevitable sales tax into my margin.
Happy to explain any part of this further if needed, or to answer any questions. Just tag me.
