Help for your local hobby shop - states can collect tax on internet sales

IMHO, I wouldn't consider someone who pays money to buy a table at a train show, particularly where admission is being charged, to sell a number of train related items to be either a "private sale" or a "non-business" sale situation. I would classify that person as a vendor (I know - more definitions) and that's probably why a sales tax number is required.

I guess New York State agrees with you

I think that's very different from a homeowner's isolated garage sale. I don't know any homeowner that holds a garage sale every year. They must be buying more stuff than me !

It is common in my neck of the woods.
Some folks pick all year for their annual garage sale.
NYS probably would want their due in this situation too, but it's harder to track/enforce.

Harder to track and enforce with present limited funding. With new revenue those small potatoes add up and enforcement gets greater funding.

20 vendors at a meet, each earns $1000  in one day of sales. At 8% tax rate that's $80 per vendor. $1600 in one day is no longer small potatoes. Spread that possibility statewide on a summer weekend at multiple venues and it's worth the effort to enforce.

That is what Illinois is beginning to get set up to do

Big_Boy_4005 posted:

WaynePa posted:

Big_Boy_4005 posted:

k out just fine. If states like CA and NY were able to collect on everything they sold, they would have a lot more revenue, and might consider lowering rates.

 

Wow - just wow.  When was the last time that happened?  Once they get their hands on it, they never give it back - they will tell you they can't live without it - and that will be from a bureaucrat making $200K +  

Call me when sales taxes  go down, because they have collected enough.  

Richie C. posted:

C W Burfle posted:

A "non-business" sale implies that it is an occasional sale being conducted by a seller who is not in the business of regularly selling that item.

What does "occasional sale" mean?
If I have a table at a train show once a year, is it any different than someone who holds a garage sale once a year? How about two or three shows?

As I posted earlier, here in NYS one must have a tax number in order to get a table at a show.

IMHO, I wouldn't consider someone who pays money to buy a table at a train show, particularly where admission is being charged, to sell a number of train related items to be either a "private sale" or a "non-business" sale situation. I would classify that person as a vendor (I know - more definitions) and that's probably why a sales tax number is required.

I think that's very different from a homeowner's isolated garage sale. I don't know any homeowner that holds a garage sale every year. They must be buying more stuff than me !

I would call that OVERREACH. Unless the seller has a regular brick and mortar business, train meet sales should be exempt from tax and collection. You'd be asking a lot of casual sellers to register, collect and remit minimal revenue. States that want to play that game are losing sight of the bigger picture. The tax was actually paid when the product was first retailed. How many bites of the apple should they get?

Say Mr Muffin goes to York as a vendor. Who gets the tax, IN or PA? I say PA. When in Rome...

The tax was actually paid when the product was first retailed. How many bites of the apple should they get?

 

I guess you never bought a used car.

It is a SALES tax, not an item tax.  

Getting back to the "Help for your local hobby shop" thing...

If your LHS sells to out of state customers on the internet, by mail or by phone, they're now surely going to have to charge and transfer tax monies for at least 45 states. The big dealers will probably have no problem, but the small guys will have a harder time dealing with the extra burden.

Doesn't sound like much help, does it?

Rusty

No LHS here. Just more money for state government to waste.

According to this article this case was "South Dakota vs. Wayfair 17-494" and is not a done deal.....yet

"Andy Pincus, a Washington lawyer who filed a brief on behalf of EBay and a group of small businesses, said the ruling wasn’t a "green light" for other states. "They’re going to have to meet some additional constitutional tests," he said.

About 16 states already have laws similar to South Dakota’s that could let them require tax collection by internet retailers in the coming months, and more could follow quickly. Other states would have to revise their tax laws."

"even occasional sellers of tangible goods, should register to collect sales or use tax."

https://www.taxes.ca.gov/sales..._use_tax/index.shtml

 

we had a person around the corner that had a "yard" sale every weekend.  state stopped that because they did not pay sales tax on the used crap they were selling.

A person who has a "yard" sale every weekend is in the yard sale business.  CA would certainly require the seller to pay sales tax on all items that were sold.  The seller should also probably have a business license and report the sales as income on their income tax.  

NH Joe

Pennsylvania has tons of tour buses coming from NY and New Jersey to go to the "outlets".  Why?  Because you don't pay any tax on items classified as clothes.  Half the people shopping there are from out of state.  Big source of tourism dollars for PA.  I'll worry about this tax crap when I see them fined first.

I always found it interesting that you can order out of state and then not pay sales tax. I ordered some classic car parts when I was in FL. It was cheaper to order them from Texas than drive 3 hrs each way to the same company’s trade counter in FL and pick them up.

I’ll cheer you all up now and tell you that sales tax (VAT-value added tax) is 20% here in the U.K.

This is also added on by HM Customs & Excise (those are the people you guys asked to leave when there was that little misunderstanding over some tea .)on most items mail/internet ordered from outside the EU into the U.K. i.e. trains  

Nick

BigRail posted:

Pennsylvania has tons of tour buses coming from NY and New Jersey to go to the "outlets".  Why?  Because you don't pay any tax on items classified as clothes.  Half the people shopping there are from out of state.  Big source of tourism dollars for PA.  I'll worry about this tax crap when I see them fined first.

NJ doesn't tax clothing,shoes or food.

bigkid posted:

"actual calculating taxes is not a big deal, there are applications out there that let you put in a zip code and calculate them," 

We had trucking software that used zip codes. It seemed to have errors where the mailing address had a city listed but the business was not in that city, they were actually in an unincorporated area. Didn't this come up long ago and Al Gore (the inventor of the internet) say we couldn't tax on line businesses? 

Penn-Pacific posted:

According to this article this case was "South Dakota vs. Wayfair 17-494" and is not a done deal.....yet

"Andy Pincus, a Washington lawyer who filed a brief on behalf of EBay and a group of small businesses, said the ruling wasn’t a "green light" for other states. "They’re going to have to meet some additional constitutional tests," he said.

About 16 states already have laws similar to South Dakota’s that could let them require tax collection by internet retailers in the coming months, and more could follow quickly. Other states would have to revise their tax laws."

Thank you for the link. I believe it clearly states that the retailer is expected to collect and remit the tax to the buyers state and not the sellers state. This would clearly be a major burden on the smaller retailers with an internet presence like the vendors that support this forum. 

It also appears that this is not a done deal and the rules could be changed by Congress or private appeal.

Pete 

Norton posted:

I believe it clearly states that the retailer is expected to collect and remit the tax to the buyers state and not the sellers state. This would clearly be a major burden on the smaller retailers with an internet presence like the vendors that support this forum. 

A $100k floor such as under the South Dakota law renders the issue moot for many small hobby shops and most hobbyist resellers. Question I would have is what recourse a state would be willing to pursue against an out-of-state seller that would net less than a few million dollars.

Norton posted:

Penn-Pacific posted:

According to this article this case was "South Dakota vs. Wayfair 17-494" and is not a done deal.....yet

"Andy Pincus, a Washington lawyer who filed a brief on behalf of EBay and a group of small businesses, said the ruling wasn’t a "green light" for other states. "They’re going to have to meet some additional constitutional tests," he said.

About 16 states already have laws similar to South Dakota’s that could let them require tax collection by internet retailers in the coming months, and more could follow quickly. Other states would have to revise their tax laws."

Thank you for the link. I believe it clearly states that the retailer is expected to collect and remit the tax to the buyers state and not the sellers state. This would clearly be a major burden on the smaller retailers with an internet presence like the vendors that support this forum. 

It also appears that this is not a done deal and the rules could be changed by Congress or private appeal.

Pete 

I’ve gotten a email from EBay ask me to sign a petition in this matter.  

I really can’t see a hobby store having to get a tax number for 44 states just to sell online.   logistical nightmare to say the least.

I would think government will make ebay responsible for collecting the tax and sending to each state.

New Haven Joe posted:

"even occasional sellers of tangible goods, should register to collect sales or use tax."

https://www.taxes.ca.gov/sales..._use_tax/index.shtml

 

we had a person around the corner that had a "yard" sale every weekend.  state stopped that because they did not pay sales tax on the used crap they were selling.

A person who has a "yard" sale every weekend is in the yard sale business.  CA would certainly require the seller to pay sales tax on all items that were sold.  The seller should also probably have a business license and report the sales as income on their income tax.  

NH Joe

Most CA cities only allow a limited number of "yard sales" per address - per year and a "yard sale permit" is required in advance - no biz lic. required.

Our city had a street that had become an every Sat. &  Sun. "market place".   My partner & I were tasked with compliance with "the fix" and as long as the sellers cooperated in a reasonable way - we were reasonable with them.  Took about three months to bring the situation into compliance.

justakid posted:

In Illinois all fleamarket and show hosts report the contact info of all vendors to the state. Illinois expects a completed sales tax form and a check from each vendor for sales tax collected at each event.  Some townships in Illinois  charge a flat rate local tax of $25 or more just to have a garage sale. Please do not identify yourself in this forum as someone who ignores Illinois sales tax requirements. The fine is $650 and no statute of limitation.

Most if not all fleamarket and garage sale sales are of used items which were already taxed once when  bought new by the original owner.

The state's position is sellers are competing with local brick and mortar businesses. (Even used baby clothes)

Point is:

Don't kid yourself with any extra revenue this law creates, the state will have the $resources to enact more laws for more. Revenue and enforcement.

(Theres a hand in your pocket that wants all your loose nickles)

 

 

Very interesting. Now along with Government sponsored trolls (they exist), the Revenue will allow for more monitoring on the internet for those "evil doers" who do not render unto Caesar.

That's why I BARTER

The Illinois law which will start Oct. 1 mirrors South Dakota's threshold.  Online sales tax kicks in, for individual online retailers. Any retailer that conducts at least 200 transactions or has at least $100,000 in annual sales within its borders must collect sales tax, regardless of the company's brick and mortar footprint in the state. It goes on to say states around the nation are expected to follow suit on collecting taxes directly from internet retailers,regardless of where they are located now that the Supreme Court has opened the gate. Illinois Department of Revenue expects to collect about $ 200 million annually. This was in Chicago Sun Times today.