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Sales tax for Gunbroker purchases in certain states...

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C-Class Wannabe

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Discussion starter · #1 ·
Hope I posted this in the correct forum...

FYI to members who have not bought or sold on gunbroker recently.....I listed a handgun on Gunbroker today, and I found out that as a private casual seller I will be required to collect sales tax from buyers who reside in the following states:

Georgia – GA
Iowa – IA
Indiana – IN
Kentucky – KY
Maine – ME
Nebraska – NE
New Jersey – NJ
Nevada – NV

If I understand this correctly....and correct me if I am wrong.....when selling to a buyer who lives in the states listed above, I will be required to collect sales tax with the buyers payment....and Gunbroker in turn will be automatically collecting the sales tax from me (along with my listing and final value fees) by billing my credit card associated with my Gunbroker sellers account. Sounds like this law took effect on the 1st of this year.
 
#4 ·
What GunBroker does is that they automatically add the tax to the invoice sent to the buyer. They are what is called a "Marketplace Facilitator" and obligated to collect the tax from the seller depending on the state the buyer lives in. It shows up on your seller's GunBroker Statement. Many auction houses also collect sales tax spending on what state you live in. Classified type websites like GunsInternational do not collect sales tax as it is a different type of selling platform. Be aware as it can make a difference on an expensive gun!
 
Discussion starter · #6 ·
I don't think that matters.....sales tax will be required to be collected even if the buyer does not checkout thru gunbroker. The seller is still required to collect it and remit it as it will be billed to the sellers monthly statements.
 
#7 ·
As a brick and mortar store owner, it has always amazed me that the government allowed merchandise to be shipped into your state or province, tax free. We collect tax on sales of merchandise on their behalf and they grant our out of state or province competitor a 5-8% (depending on the local sales tax) advantage, based on the fact they don't collect that same tax. If those states require tax to be collected, it is as it should be.
 
#8 ·
who determines what amount of sales tax is due?, in addition to state, many counties and cities Charge sales tax also, then that brings up the question where does the sale happen, your home address or the FFL‘s address
 
#10 ·
Jo2 said:
As a brick and mortar store owner, it has always amazed me that the government allowed merchandise to be shipped into your state or province, tax free. We collect tax on sales of merchandise on their behalf and they grant our out of state or province competitor a 5-8% (depending on the local sales tax) advantage, based on the fact they don't collect that same tax. If those states require tax to be collected, it is as it should be.
Click to expand...
Don't be amazed. It was always in there sights. They just didn't know how to collect it. Now they do,
 
Discussion starter · #11 ·
I think this will lead to a spike of "non-paying bidders" as the buyers will be unaware of the additional expense of paying the sales tax and unwilling to follow through with the sale. It does state in my auction that "sales tax collected based on ship to address" with a clickable link which maps out if you live in a state which requires collection.......but I find that many buyers do not read through all of the details of an auction and focus on the pictures.
 
#12 ·
I didn’t purchase a gun from from Gun Broker, however, I just bought a new shotgun online from Joel Etchin Gun’s located in PA. I live in Kentucky and was not charged KY state sales tax. The invoice just disclosed that the state sales tax is my responsibility. Not a big deal.
 
#13 ·
I am surprised it took this long for these States to catch on to this sales tax "loophole". I am sure most every state will eventually pass their own market facilitator law. I hate it as a consumer but I see the fairness in it.

@Riverbear your purchase was done directly with Etchin who is out of state and also not a marketplace facilitator (think Ebay or GunBorker). Its those kind of ad hosting type places that are defined as market facilitators and are getting ensnared in these new sales tax laws. Up to now these states have been missing out on that sales tax revenue. As @Jo2 alluded to, their in-state Vendors have also been disadvantaged as folks will not buy from them but will go online and buy from out of state to avoid the sales tax. Its just another way to grab that sales tax, no matter where the sale originated.
 
#14 ·
C-Class Wannabe said:
I don't think that matters.....sales tax will be required to be collected even if the buyer does not checkout thru gunbroker. The seller is still required to collect it and remit it as it will be billed to the sellers monthly statements.
Click to expand...
None of my purchases have ever been taxed from a seller. Different story if you pay thru gunbroker.
 
#15 ·
@Tall Pine - Listed below is the sales tax info from Joe Etchin. In my case, I will have to report my gun purchase on my 2021 State Income Tax since Etchin did not charge me Sales Tax but will inform my state that I made the purchase.

....from Joel Etchin web site:
Sales Tax and Use Tax Updates
Due to the US Supreme court's ruling in June of 2018, several states have enacted sales tax and reporting laws on sales coming into their states. To follow these state laws, we must start collecting sales tax and/or reporting all sales to the states so that they can collect the use tax. The world of interstate internet commerce is not going to be what we have been used to. These laws are changing constantly and we will be keeping a close eye on them and updating this page as changes occur. Thank you for your understanding and cooperation.
 
#16 ·
@Riverbear thanks for that info! I stand corrected. I had no idea these sorts of laws had a reach beyond the big ad hosting sites classified as facilitators. I was aware business had to do this sort of thing called "Use Tax" reporting on their non-inventory business purchases, but not individuals on personal use out of state purchases. I cannot even imagine the compliance and audit repercussions. Jeez, and having to report it on your income tax return, now mingling income and sales tax issues. Sorry for your pain.
 
#18 ·
mg1polo said:
None of my purchases have ever been taxed from a seller. Different story if you pay thru gunbroker.
Click to expand...
It doesn't matter if you pay through Gunbroker or use Gunbroker Checkout. Gunbroker adds the sales tax amount to the seller's monthly bill, and it's up to the seller to recoup that cost from the buyer. If the seller doesn't collect it from the buyer, the seller is STILL going to pay it to Gunbroker, essentially taking that amount as a loss..
 
#19 ·
skeet_man said:
It doesn't matter if you pay through Gunbroker or use Gunbroker Checkout. Gunbroker adds the sales tax amount to the seller's monthly bill, and it's up to the seller to recoup that cost from the buyer. If the seller doesn't collect it from the buyer, the seller is STILL going to pay it to Gunbroker, essentially taking that amount as a loss..
Click to expand...
Not worth my breath, you pay the tax.
I just bought another 2 1/2" Stainless Python from a gentleman in Lexington, KY. last Wednesday.
I sent him a certified check, he sent me the Pistol.
Yes, I have my own FFL.
NO SALES TAX WAS CHARGED OR PAID!
 
Discussion starter · #20 · (Edited)
mg1polo said:
Not worth my breath, you pay the tax.
I just bought another 2 1/2" Stainless Python from a gentleman in Lexington, KY. last Wednesday.
I sent him a certified check, he sent me the Pistol.
Yes, I have my own FFL.
NO SALES TAX WAS CHARGED OR PAID!
Click to expand...
Reread my original post.....the BUYER has to live in one of these states to be required to pay the tax.....NOT THE SELLER!.......you are from Grand Rapids Michigan......the seller lives in Kentucky....THAT'S why no tax needs to be collected from you at this time.
 
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Tall Pine
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