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Gunbroker sales tax coming to all states 4/1/21

13619 Views 38 Replies 24 Participants Last post by  Joe Trapalino
Esp for the people who wanted to argue on the last thread, GB sales tax imposition will be coming for all states on 4/1 (well, almost all states, 44 in total (5 do not charge sales tax to begin with and I can't be bothered to find the one state that's missing). Rec'd this email a half hour ago. There will be no avoiding this as a buyer unless the seller is willing to eat it, since GB WILL charge the seller the fee regardless of your payment choice or checkout process:

Since the Wayfair Supreme Court decision, states have been allowed to force sellers to collect sales tax for items sold into a state even if the seller has no physical presence in that state. Additionally, some states have enacted so called Marketplace Facilitator (MPF) laws in an effort to force marketplaces that perform the remittance of sales tax on behalf of the marketplace’s sellers.

These laws shift the sales tax collection and remittance obligations from the individual seller to the Marketplace Facilitator.

The GunBroker.com MPF States

On April 1, 2021, GunBroker.com will be adding to the list of MPF states. In addition to the original 8 states (in Red and Bold) GunBroker.com will collect and remit sales tax for an additional 36 states based on the address where the item is delivered (Ship To address).

Complete list:

Alabama
Arizona
Arkansas
California
Colorado
Connecticut
District of Columbia
Georgia
Hawaii
Illinois
Idaho
Indiana
Iowa
Kentucky

Louisiana

Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Nebraska
Nevada
New Jersey

New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma

Pennsylvania
Puerto Rico
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming

All sellers, even individuals that are not businesses, are required to collect sales tax to meet the regulations. GunBroker.com will assist you with the calculation, collection and remittance of the sales tax due.

GunBroker.com will calculate the sales tax required and add it to the order during the checkout process. The tax calculation will be based on the Ship To address on the order. This is the location of the Buyer not the location of the Seller.

The calculation will include sales tax for the item plus any additional taxes imposed by that state on other things such as shipping or handling. Simply collect the order total payable due from the buyer.
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I guess I would be ok with this if I was positive that the tax I paid made it back to the state I live in and wasn't just pocketed. Sellers can say they are now forced to collect it but who is responsible for seeing that they ever pay it out? I'm guessing that the majority of individual, non-business sellers on Ebay that charge tax never pay it. It is just a bonus to them.
 

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I guess I would be ok with this if I was positive that the tax I paid made it back to the state I live in and wasn't just pocketed. Sellers can say they are now forced to collect it but who is responsible for seeing that they ever pay it out? I'm guessing that the majority of individual, non-business sellers on Ebay that charge tax never pay it. It is just a bonus to them.
Or they pay it to the state the seller is in.
 

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I guess I would be ok with this if I was positive that the tax I paid made it back to the state I live in and wasn't just pocketed. Sellers can say they are now forced to collect it but who is responsible for seeing that they ever pay it out? I'm guessing that the majority of individual, non-business sellers on Ebay that charge tax never pay it. It is just a bonus to them.

The way ebay does it - ebay collects the taxes and sends it to the states - the seller never gets that money so there is no monkey business.
 

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Discussion Starter · #5 ·
I guess I would be ok with this if I was positive that the tax I paid made it back to the state I live in and wasn't just pocketed.
Gunbroker adds the sales tax to the SELLERS fee, and remits it to the state. The seller then recoups this money from the buyer, essentially making both the seller AND gunbroker middlemen for the sales tax. There is NO way for the selller to pocket the sales tax, gunbroker WILL get that money from the seller, and they will remit it to the state. If the seller wants to eat that $ and not collect it from the buyer it's up to them I suppose.

To explain it another way. You sell a gun for $1000. Buyer's sales tax is 8%. Gunbroker will bill YOU, the seller, for the final value fees PLUS 80 dollars in sales tax. When you invoice the buyer, that sales tax is included in the total, so you charge the buyer, gunbroker charges you, gunbroker sends the money to the buyer's state.

Sellers can say they are now forced to collect it but who is responsible for seeing that they ever pay it out?
The sellers aren't saying ANYTHING. The sellers have ZERO choice in the matter. Gunbroker is imposing this on the sellers because the states imposed this on gunbroker.

I'm guessing that the majority of individual, non-business sellers on Ebay that charge tax never pay it.
Ebay collects the sales tax to the buyer and remits it directly to the state, the seller never sees ANY of that money. Ebay is different from GB in that they are a payment processor as well, and have the ability to withhold the sales tax without having to add the extra step.

Or they pay it to the state the seller is in.
Sales tax has absolutely NOTHING to do with the state that the SELLER is in, it has EVERYTHING to do with the state the BUYER is in, and it is remitted to the state that the BUYER is in.
 

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I guess I would be ok with this if I was positive that the tax I paid made it back to the state I live in and wasn't just pocketed.
In my admittedly limited dealings with the sales tax department of a state (IL) I found that the only thing they really care about is if a buyer is paying funds labelled as a sales tax that they get it. They don't care if taxes are being collected on non-taxable items. More money for them.
 

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Some of you ain't gona like this but It's fair. I'm OK with it. I wonder why it wasn't set up like this from the start. If it had been nobody would be complaining about it now.
Bottom line..e-bay is killing a lot of small businesses. This won't stop that but it will level the playing field a bit.

And remember..sellers don't CHARGE tax, they COLLECT it. Lots of difference.
Ok now let me have It
Jim
 

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Buying a high dollar gun now off Gunbroker will have a significant increase in the overall price. Until now buying a gun on Gunbroker could mean a significant price reduction if the sales tax wasn’t collected. Buy a $10,000 shotgun and the sales tax is a 7-10% additional cost.

Obviously the states are trying in every way they can to raise revenues - often to fund additional social programs. States like Illinois and California are essentially bankrupt for all intents and purposes. They need additional revenue to keep their political ship afloat - even if it’s only a temporary bailing of tje state ship that is sinking. The continuing to tax and spend mentality is resulting in ever higher deficit, reduction of investment bond ratings, one could argue only the richest people had money in the stock market. That’s no longer true now with the advent of 401k and pension funds investing in tje stock market.

The first time the stock market takes a real dip, like in 2008, the dip will be be felt across the full range of investors. We’re in for a helluva ride, Woodrow !
 

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Another angle to this argument...Gunbroker has hurt brick and mortar dealers as they always have had to charge sales tax. That $1000 gun mentioned earlier was always cheaper on Gunbroker over a brick and mortar store because there was no sales tax to be collected, new or used.
 

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Discussion Starter · #15 ·
Another angle to this argument...Gunbroker has hurt brick and mortar dealers as they always have had to charge sales tax. That $1000 gun mentioned earlier was always cheaper on Gunbroker over a brick and mortar store because there was no sales tax to be collected, new or used.
That was the case with every online store selling every conceivable product, it was not something exclusive to Gunbroker.

Ultimately, the day of the brick and mortar store is coming to a close, you can see that clear as day with the abject collapse of shopping malls. Personally speaking, unless it's something I had to have TODAY, I'm more likely to purchase something online and have it delivered even if it is exactly the same price in the store, not worth the hassle of getting in the car, driving across town, finding what I want, checking out, and driving home, wasting an hour or more, when I can accomplish the same thing in 2 minutes sitting at my computer. Hell, I'd even pay a little bit more for something online if it is less of a hassle.

Anyone who thinks the sales tax situation "levels the playing field" is missing the big picture. Even with sales tax included both ways, it's almost always cheaper to buy online, and a hell of a lot more convenient. Personally one thing the sales tax imposition has caused for me is to second guess if I REALLY want/need something. I always calculate that into the final price, and sometimes when all is said and done it just isn't worth it (it can turn a good deal into a not-so-good deal esp on ebay and gunbroker). The ironic thing at the end of the day is that for the states this likely ends up being a near zero sum game, sure they get more money from sales tax, but they are probably losing an equivalent amount in income tax from the seller due to decreased sales.

Sadly, many brick and mortar stores have patently refused to come into 1998 and have even a minimal web presence. Most of the gun shops in my area barely have a functional rudimentary website, let alone any online sales. These stores should have ALL been taking advantage of gunbroker for the past 2 DECADES, yet apparently they prefer to sit on inventory for years and sometimes DECADES when it's something that would sell in less than a week online for over asking price. There are probably at least a dozen gun shops within an hour of me, only one of them does Gunbroker, and only one of them has any sort of online ordering. And these are shops of all shapes and sizes (nothing quite so large it is a regional draw, but large enough to be a county draw), some quite small, some with $1m+ in inventory.
 

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That was the case with every online store selling every conceivable product, it was not something exclusive to Gunbroker.

Ultimately, the day of the brick and mortar store is coming to a close, you can see that clear as day with the abject collapse of shopping malls. Personally speaking, unless it's something I had to have TODAY, I'm more likely to purchase something online and have it delivered even if it is exactly the same price in the store, not worth the hassle of getting in the car, driving across town, finding what I want, checking out, and driving home, wasting an hour or more, when I can accomplish the same thing in 2 minutes sitting at my computer. Hell, I'd even pay a little bit more for something online if it is less of a hassle.

Anyone who thinks the sales tax situation "levels the playing field" is missing the big picture. Even with sales tax included both ways, it's almost always cheaper to buy online, and a hell of a lot more convenient. Personally one thing the sales tax imposition has caused for me is to second guess if I REALLY want/need something. I always calculate that into the final price, and sometimes when all is said and done it just isn't worth it (it can turn a good deal into a not-so-good deal esp on ebay and gunbroker). The ironic thing at the end of the day is that for the states this likely ends up being a near zero sum game, sure they get more money from sales tax, but they are probably losing an equivalent amount in income tax from the seller due to decreased sales.

Sadly, many brick and mortar stores have patently refused to come into 1998 and have even a minimal web presence. Most of the gun shops in my area barely have a functional rudimentary website, let alone any online sales. These stores should have ALL been taking advantage of gunbroker for the past 2 DECADES, yet apparently they prefer to sit on inventory for years and sometimes DECADES when it's something that would sell in less than a week online for over asking price. There are probably at least a dozen gun shops within an hour of me, only one of them does Gunbroker, and only one of them has any sort of online ordering. And these are shops of all shapes and sizes (nothing quite so large it is a regional draw, but large enough to be a county draw), some quite small, some with $1m+ in inventory.
Trust me, I'm with you. I avoid going to brick and mortar stores unless I need it today or the store offers something that I can't get online. It seems like those stores who have adapted to both platforms have done well. I've been on Ebay since it's inception and only recently have they collected sales tax. For years they made the argument it was too much work and it would hinder the growth of e-commerce. No more. All of that said, Gunbroker should be doing it just like Ebay does-automatically charge the buyer, send it directly to the state, and leave the seller out of it.
 

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Discussion Starter · #17 ·
All of that said, Gunbroker should be doing it just like Ebay does-automatically charge the buyer, send it directly to the state, and leave the seller out of it.
I don't disagree, but that can't happen unless gunbroker sends the buyer a separate bill, requiring a separate payment from the buyer (which in turn would make it more complicated for the buyer, hindering sales), or gunbroker starts facilitating the financial transaction as well, which comes with a whole new set of fees for the seller, which in turn get passed on to the buyer.

GB is still a significantly better deal for the seller, 6% or less final value fee vs 10% on ebay + paypal or managed payments fee of another 3%, so sellers cost is less than half with GB, although you have a significantly larger pool of buyers on ebay, so it's all give and take if you're listing as an auction and not a set price, and it's something that's allowed to be sold on both platforms.
 

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The system that Gunbroker has initiated is not going well in the initial rollout. I sold three personal rifles in February as a private seller, not a dealer. Only one sale was noted as taxable and the buyer sent along about $35 in sales tax. Ok, no big deal. But Gunbroker just notified me that I have an automatic sales tax charge hitting my bank next week of $95. The other two buyers just mailed me a check for the bid price plus shipping.

Apparently GB has up charged or back charged sales tax even though the sales were to noncollecting state

I’m not aware of and recourse against GB other than a whole new set of due diligence about tax collection if I ever use that site again. I’m thinking if these three sales were this jacked up for me, what about some of those high volume sellers that were taken by surprise. They won’t be as easy to deal with as I’m prepared to be
 

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Discussion Starter · #19 ·
Average price was about $1500 each. Only one sale was noted as taxable and the buyer sent along about $35 in sales tax.
Unless the value of the guns was vastly different, and only averaged out $1500 (IE one was 500, one was 1500, and one was 2500), it sounds like you didn't collect enough tax for the one that was taxable.

$35 would have only been approximately right if the gun the sales tax was applied to was $500ish.

If they were ALL roughly $1500/ea, then either gunbroker, the buyer, or you shorted the transaction about $70
 
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