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 Replies: 21 / Views: 2,744 |
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Valued Member
United States
102 Posts |
My understanding is that we have to pay taxes on our internet sales to the U.S Gubment why is that?  |
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Valued Member
United States
426 Posts |
There's been a great deal of discussion regarding this but basically it conmes down to the fact that it is against the law not to report all income to the IRS.  Edited by RealPeso
03/23/2011 8:07 pm
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Pillar of the Community
Canada
1733 Posts |
Yeah we were just discussing this in the Canuck coin sub forum as well... Seems like they have lots of time on their hands to chase every paper trail lately so I can only conclude there are too many auditors and some should be put into work camps making one dollar coins for the USA.
I pay taxes in both countries, so I am always aggravated by both the IRS and CRA.
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Pillar of the Community
United States
3170 Posts |
Since when did we allow the U.S. Gubment to tax sales on the internet?
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Bedrock of the Community
Australia
21786 Posts |
Australia does not tax Internet sales either. Perhaps it is too hard to police.
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Valued Member
United States
355 Posts |
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Since when did we allow the U.S. Gubment to tax sales on the internet? They have been trying with Newegg and Amazon (and probably ebay) for years now. If those retailers have a location in your state you're most likely getting taxed on a purchase. If they don't have operations in your state right now it seems to vary on if you're getting taxed or not depending on the politics of that state and how firmly the companies lawyers are fighting it. The gov't idea is that 'you gotta get taxed somewhere'. The gov't would prefer that they get their money at each sale rather than trust the citizen to report it on their annual taxes. There actually is a part on your taxes where you're supposed to report the total of online purchases where you weren't taxed and report it (at least in NY). |
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Pillar of the Community
United States
1348 Posts |
When I report my profits from my coin collecting hobby. It usually turns into a loss. I document every mile to and from a coin shop, coin show, or transaction made. I also keep all receipts for postage, envelopes, and my PO BOX. I have most of these things for myself, but since they directly reflect my hobby or as the IRS would see it my secondary income, I can claim the expenses. I usually make around $1000 a year on buying and reselling, but after the expneses of everythign else I usually break even.
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Bedrock of the Community
United States
20753 Posts |
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If those retailers have a location in your state you're most likely getting taxed on a purchase. They are just trying to make MONEY you know. Not sure when this all started but somewhere along the line they started with the sales taxes on those catalogs you get in the mail if you live in the same State they are based. It was on the news not long ago that Amazon is going to start pulling out of States that do this though. Not sure how that would work if all States started doing this. Not sure how this works with coins at all. At a coin store around me they mostly charge sales taxes. At coin shows I have never paid any taxes. No taxes at flea markets regardless of the item being new or used. With a coin I always wondered if the Government imposed sales taxes everywhere on coins, imagine if you had a coin that was originally a $0.01 coin, cent or penny, and it sold for $1.00. In Illinois you would pay 10.25% sales taxes. Then it is resold several more times for $1.00, eventually you would be paying more in taxes than the coin itself could ever be worth.  |
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Valued Member
United States
327 Posts |
The beauty of coin buying and selling (face to face, anyway) is that it's an all cash business.
Take that for what it's worth.
Somewhere in our past, the government decided it would give itself the right to poke it's nose into every single solitary transaction where money is exchanged for goods, no matter how small or inconsequential.
A lot of people dislike this, and resist it at every opportunity.
Most of the money I make (when I do, but I seem to be following the "buy high, sell low" business model) gets plowed right back into more coins, supplies, etc for the hobby, so it's not like I'm making a living here.
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Pillar of the Community
 United States
2448 Posts |
 I think we all have that business model from time to time. |
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Valued Member
United States
341 Posts |
W1a9c8k5 are any of you claiming these sales as or are you a business? How would the gov know your selling coins other than an ebay account? |
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Valued Member
United States
341 Posts |
If people have to claim there profits then don't they have the ability not to pay tax on an item if it is for resale?
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Bedrock of the Community
United States
20753 Posts |
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The beauty of coin buying and selling (face to face, anyway) is that it's an all cash business.
Not always. Almost all coin stores I know of will take credit cards and/or a check. Those are tracable. One coin shop told me if I use a credit card or check, there is an additional charge for that and they then must charge sales taxes. One coin shop that also sells at coin shows always asks if you want a receipt. And if you don't use cash, they insist you need a receipt. It is obvious though that many coin shops do have to keep records of all or most sales due to other tax purposes. Difficult to own a buisness and have no sales at all, maybe. I've always wondered how a situation would work if all was done by the book. You start with a $1 purchase price for a coin. You pay the sales tax on that $1. Now you turn around and sell it for $2. Is the sales tax now on the $2 or is it only on the $1 profit? Now you sell it for $10 so already people have paid sales taxes twice on that same item so when does it all stop? |
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Pillar of the Community
Canada
1733 Posts |
It doesn't stop, every time it's sold tax is collected again. In many locales you are supposed to voluntarily report new or used items you purchased privately or out of state and voluntarily submit any tax owing.
Governments are so huge now, they need a constant influx of cash to run that exceeds anything we could have imagined 50 years ago.
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Moderator
 United States
187702 Posts |
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Almost all coin stores I know of will take credit cards and/or a check. I have always paid cash for my coins and for good reason. Not because I do not want to be tracked or taxed, but because I do not want to see the bill after buying all the key dates I need! I always pay my full balance each month, which would be impossible after that! |
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Bedrock of the Community
United States
17884 Posts |
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If people have to claim there profits then don't they have the ability not to pay tax on an item if it is for resale? They don't have to pay sales tax on an item if they have a resale/sales tax license. But income tax on the profits is still due. That does for either a business or a hobbiest. A business though can deduct expenses (A hobbiest normally can't.) and they can have a net loss that they can carry over to subsequent years to offset profits. A hobbiest can use losses to offset profits but can not show a net loss. Quote:
You start with a $1 purchase price for a coin. You pay the sales tax on that $1. Now you turn around and sell it for $2. Is the sales tax now on the $2 or is it only on the $1 profit? The sales tax would be on the full $2 sale price, and income tax due on the $1 profit. Oh and if you hold the coins for over a year then the profits are taxed as long term capital gains at the collectibles level of 28% Edited by Conder101
03/24/2011 7:20 pm
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Replies: 21 / Views: 2,744 |
Posted 03/23/2011 10:58 pm
