Tax on shipping.

[flight74722]

Under the new tax laws.Is there a tax on shipping if you include the shipping price in with the item price. In other words free shipping. Thanks.

[flight74722]

yes.

[thevintagesilvershop]

There is more to Colorado state sales taxes than just the straight 2.9% state sales taxes. For example, in my county (I live outside the city limits) I have been required to collect and remit 4.9% which is 2.9% state sales tax + 2.0% La Plata County tax. If I lived in Grand Junction, I would have to collect 7.95% state sales tax (city, county, state).  Home Rule cities, like Durango, are a whole different animal. 

When you talk to your CPA, be sure to ask about the new destination based sales tax that must be charged to Colorado residents for Colorado sellers. This is a new law, the original law was to go into effect on 12/1, but I think it’s been extended to 1/1.   Ebay rate tables do NOT accommodate this, so that’s a whole other problem. 

I know this post may cause more confusion for you, that’s why you need to go talk face to face with a CPA since you were having trouble with the most basic concept. It is much more complicated than you realize. 

[thevintagesilvershop]

Also, if you live in Ft Collins, as noted on your listing, the sales tax to be collected for state, city, county is 7.3%. 

[thevintagesilvershop · Accepted solution]

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@thevintagesilvershop wrote:

Also, if you live in Ft Collins, as noted on your listing, the sales tax to be collected for state, city, county is 7.3%. 

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I just looked it up, Ft Collins is a home rule city, so what you submit to the state will be different than what I quoted above. You will also have to have a city tax license there and submit taxes directly to the city. This is ONLY if you live in the city limits. 

Your situation is complicated. Talk to the CPA. 

[flight74722]

Thanks. Everyone here has been helpful.

[cptcha]

The tax should be charged on revenue. 

So the tax on shipping should be collected from the USPS/UPS/Fedex, not from the buyer,

because they are the entities gaining the shipping charges.

Something is going wrong.

[capt.steel]

I went to send an invoice to a Buyer today and see there is tax added onto the total for their state (WA @ 10.09% Sales Tax).

My question is: does the Buyer know what the tax will be on the total of their maximum bid + shipping before they agree to purchase the item? 

Do they know what they'll have to pay in total if they win the item at the time they place a bid?

I'm worried I'm sending a bill to the Buyer with more money requested than they agreed to when they bid (because they weren't aware that tax would be added on at the end of the auction).  I'm afraid they may refuse to pay it due to "fraudulent advertising" if the total including the sales tax for their state wasn't made clear to them when they bid on the item. The tax is almost as much as my shipping price - so it's like the Buyer is being charged an additional shipping price. 

[pburn]

There's already an announcement about sales/use tax on every listing. It's on your listing, under the "Shipping and payments" tab. It says:

Taxes
Sales tax may apply when shipping to: IA*, MN*, WA*.
* Tax applies to subtotal + S&H for these states only

[member3245783]

If you go, to the post office and send something out they don't charge you a sales tax so why on Ebay is a sales tax charged on shipping. Should be illegal. 

[member3245783]

Just another way the states are getting their greasy ham fists into your pocket. Tax on shipping from the buyer should be illegal.

[7606dennis]

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@flight74722 wrote:

That is what I was thinking. But to make it clear, If I use free shipping there is no tax on shipping,except for the state tax that I ship to. Thanks.

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Actually, you are correct in that there is no sales tax on shipping if you use free shipping since there is no shipping to tax.  Even the state to which you are shipping cannot charge a tax on something that doesn't exist.  Of course, they do expect the buyer to pay sales tax on the full amount of item that you sold.

[soh.maryl]

I don't get it.  I list and sell an item for $25 plus $5 shipping.  The buyer pays $30.  If he is in a state that taxes both item and shipping, he pays the sales tax on $30.

OR I list that same item for $30 with free shipping.  The buyer pays $30.  If he is in a state that taxes both item and shipping, he pays the sales tax on $30.  

So how is the buyer's money saved if I list with free shipping? 

And, furthermore, if you asked your question as a seller, are you not aware that the buyer pays the state sales tax, not you, the seller? 

[soh.maryl]

To be perfectly clear, eBay is not the one charging state sales tax to buyers  Individual states are charging state sales tax to buyers and eBay is collecting according to the requirements of each individual state and remitting it to the appropriate state.  One has to assume that it's legal, since it's a law made by the state legislature of that state.

Wouldn't that be the very definition of legal?

[nhdao_66]

Each state has its own rules for taxing shipping fees, but if you get free shipping, you won't have to worry about it anymore. And a buyer like me also likes it

[kh-stanley1]

Hi everyone,

Due to the length of time that has passed since this thread began, we have locked it from future replies. If this is still an issue that warrants discussion, don't hesitate to begin a new thread here.

Thanks.