Reverb Tax Charges

Discussion in 'Guitars in General' started by HeavyRevy, Aug 4, 2019.

  1. Tom Gross

    Tom Gross Silver Supporting Member

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    That's what taxes do. A lot of double & triple & more booking going on with taxes.

    If Grandpa worked hard and earned a taxed salary and saved it and dad inherited it & then I inherited it & I bought raw materials with the money and made something and sold it ......
     
  2. DCross

    DCross Supporting Member

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    I'm gonna have everything shipped to my uncle in Delaware from now on.
     
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  3. TopDog

    TopDog "jumping the valence" Silver Supporting Member

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    As a seller if some said to me -

    I want to buy your (used) item but I don't want to pay the X% tax on it, can you reduce the price by X%? I will then send you the X% as a PP gift payment, then you bill me the price less the X%.

    I'd do it.

    would you?
     
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  4. Markdude

    Markdude Member

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    This would be pretty much the same as a seller trying to do a direct PP sale to avoid a final value fee (but with the roles reversed). I’m pretty sure EBay and Reverb don’t allow you to exchange email addresses in messages, and their messaging systems probably also screen for other keywords to detect and prevent this from happening. This also offers less (if billed as a PP transaction) or zero (if PP Gift) protection if something goes wrong. So I doubt it will become a widespread alternative.
     
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  5. cholula69

    cholula69 Silver Supporting Member

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    Here in Switzerland it's tax first and ask questions later. If it breathes, it is taxed (not literally) but we are heavily taxed. Additionally, the EU has a 20% VAT assessment.

    While I do not mind paying taxes where obligated (I have trust in the Swiss government) However, I find taxing used items (or a transaction) multiple times unfair and I simply do not like it. I personally have not been affected but I sure feel for the buyers that have to contend with this new enforcement. I think this is a nail in the coffin for online websites such as Reverb.

    Perhaps this will give some people living stateside into the request for foreign buyers to declare a lower value on the customs forms. It stinks to have to pay taxes on an item that already had taxed assessed at the time of the original sale. Once again, it is the small guy paying for the tax breaks afforded to large business.
     
  6. BenB123

    BenB123 Member

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    No that's no correct. Forum members are giving misinformation on state retail sales taxes. Reverb is being taxed like all the online Retailers. Nobody on this forum is paying state retail sales taxes on purchases made from cr, Facebook, etc from a private seller on a used item. Not to mention most states have private, casual sale exemptions which they completely disregard. If anybody is dumb enough to pay state retail sales taxes on these private non business transactions I have some swamp land in Florida I'd like to sell you. There is a sucker born every minute.
     
  7. HERSCHEL

    HERSCHEL Member

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    Grandpa earned it, not your dad.

    You didn’t earn it either.

    Therefore, it was external or gift income for your dad, then for you. That’s not double dipping, that’s a standard income tax, whether income from inheritance, lottery or other.
     
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  8. HERSCHEL

    HERSCHEL Member

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    You’ve been shown linked and written proof you’re mistaken. Just because someone doesn’t pay sales tax doesn’t mean they shouldn’t, which seems to be the disconnect. Not pursuing also does not mean legal, otherwise anyone with a flag shirt would be in Gitmo. It becomes an issue when transaction levels exceed the threshold of garnering enforcement. Online sales did that a while ago and the results are rounding in to place.
     
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  9. Tom Gross

    Tom Gross Silver Supporting Member

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    I understand that that is the idea and the law - all "income" is taxed.
    My point was that the money was initially earned and taxed once, and without anything happening to it besides changing hands, it is taxed again.
    IMO, it discourages saving and punishes those that don't waste their money. And I guess the money you earn is not really "your" money to do what you will with.
     
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  10. Markdude

    Markdude Member

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    This is not a state-specific forum, and not all states have applicable exclusions or the same thresholds and/or rules for exclusions. No one is telling you what to do or declaring support of these laws, but it's clear that many here had no idea that these laws could even exist conceptually, and some were blaming Reverb for things that they have no control over. Addressing those things doesn't warrant anger or ludicrous faulty logical leaps positing that sharing knowledge about these laws equates to endorsing them.

    Here's a great read that can shed some perspective on the situation Reverb and other similar sites are in right now. It's not as simple as just charging or not charging tax based on a lookup table of each state's rules/thresholds/rates (especially since the information necessary to determine whether or not your meet the criteria for many exclusions is not available to Reverb unless they've somehow obtained a copy of all your non-Reverb financial statements).
     
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  11. HoboMan

    HoboMan Silver Supporting Member

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    This is correct. Reverb doesn't get to keep any of those tax dollars.
     
  12. Bossanova

    Bossanova Silver Supporting Member

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    Hey, next time you need a police officer, or a teacher for your kids, or some section of road repaired, or an EMT if your mom has a heart attack at the mall,

    Ask yourself...

    Is it fair for me to commit fraud and benefit myself all the while blaming other people for any perceived slight?
     
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  13. Bossanova

    Bossanova Silver Supporting Member

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    0.1%ers already have so many ways nowadays to pass on wealth while avoiding taxes, I can’t believe they still complain.
     
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  14. BenB123

    BenB123 Member

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    You have been shown multiple times most states have exemptions beyond the obvious terms of retail vs private sales. A gentleman from the state of Washington pointed out that reverb was collecting state retail sales tax illegally because they have a casual sale exemption for private buyers and sellers of used items. Have you ever bought anything used from a garage or yard sale, cr, Facebook, etc and if so did you pay state retail sales tax?
     
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  15. ChrisN

    ChrisN Supporting Member

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    If the Washington guy is me, then I need to clarify - I didn't intend to say Reverb was collecting the tax illegally due to Washington's exemption for casual sales. They are not. They ARE collecting a tax that I would not owe if I bought that same guitar in the Starbucks where I met the CL seller. It's the fact it was sold via Reverb, along with Reverb's legal status as a "marketplace facilitator" (a made up term to justify making it a tax collector - the law makes Reverb the "legal" seller of the item, despite their status as a pass-through bulletin board - the fact is, however, Reverb does do way more to facilitate the sale than merely host a BB) that creates the tax collecting (or reporting) obligation.

    What I fault Reverb for is taking the easier course of "collecting" over "notice and reporting," but their decision to do so is not illegal. FWIW, I had a fairly extensive back-and-forth with Reverb's lawyer back in March, so I'm comfortable with my understanding of the law, and of Reverb's position re: same.

    My apologies for any confusion caused by my earlier answer.
     
  16. Markdude

    Markdude Member

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    You are conflating Washington's business & occupation (B&O) tax with its sales tax and/or use tax.

    See: https://dor.wa.gov/get-form-or-publication/publications-subject/tax-topics/casual-sales

    "A casual or isolated sale is a sale made by a person who is not in the business of selling the type of property involved. For example, a sale of used office furniture by an attorney or the sale of a bulldozer by a contractor are casual or isolated sales. These sales are neither routine nor continuous.

    Business and occupation (B&O) tax does not apply to casual or isolated sales. However, when a casual or isolated sale is made by a person who is registered with the Department of Revenue retail sales tax must be collected and accounted for in every case of a casual sale to a consumer in the state.

    To report a casual or isolated sale to a consumer, you must report the income on both the “Retailing” B&O tax and retail sales tax lines of the combined excise tax return. You can take a deduction from the Retailing B&O tax under the “casual sales” deduction classification on the deduction detail page. No such deduction is available against the sales tax.

    Casual or isolated sales to other than consumers (i.e., sales for resale) are wholesale sales and are reported under the “Wholesaling” B&O tax classification. You can then take a “casual sales” deduction in the amount of the sale."

    The "registered with the Department of Revenue" part is a little confusing. Washington doesn't have a personal income tax, so I don't think all tax-filing WA residents would necessarily be registered (but maybe I'm wrong). Perhaps that means anyone who is a registered business owner in the state, but that seems at odds with the definition of a casual/isolated sale specifying the sale is made by a person not in the business of selling the type of the property involved. Also, it would seem that either way, both parties must be in Washington for these definitions to apply. That could be a result of this part of the tax code appearing to to be from 1980, long before anyone was probably envisioning it to be so easy for either retailers or private sellers to make trans-state sales.

    However, the use tax is even more broadly applicable: https://dor.wa.gov/file-pay-taxes/before-i-file/sales-and-use-tax-classification-definitions

    "Use tax applies to all tangible personal property used in Washington when the state's sales tax has not been paid. The tax is based on the value of the goods at the time of first use in Washington. Effective June 1, 2002, the value of goods at time of first use has been changed to include shipping and handling charges. The purchase price usually determines the value of items. No deductions are allowed from use tax. However, there is a credit for the amount of sales and use tax paid by the user in another state. This line represents the state portion of the total use tax owed."
     
    Last edited: Aug 5, 2019
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  17. Aaron Robinson

    Aaron Robinson Member

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    taxation is theft.
     
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  18. Colnago

    Colnago Member

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    Just because we aren't paying sales tax on privately bought, used items doesn't mean that it is legal. Tax should be paid on privately bought used items. Yes, there are SOME exceptions, but the bottom line is that tax should legally be paid on used items.
     
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  19. BenB123

    BenB123 Member

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    My point is people should not be using reverb because they are being forced to pay a tax they shouldn't have to pay. I have encouraged buyers to buy off of cr, Facebook, etc to avoid this. Unfortunately we have misinformation being spread that you still have to pay the state retail sales tax even if you avoid using reverb and you engage in a private casual sale of a used item. I still haven't found anyone who will admit they paid state retail sales tax on a used item they bought at a garage sale or cr. I'm still waiting.
     
  20. Miroslav L

    Miroslav L Member

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    Well...how many times should tax be paid on the same item....?
    Not talking about the retailers selling new items...but when a guitar or amp or whatever, gets bought new, and tax is paid...there shouldn't be more tax collected on it when it's used and sold and resold again.
    That's the rip-off part...but I hope you feel good about repaying tax on those items over and over.

    Oh...and AFA Reverb and tax...they haven't hit every state yet, unlike eBay.
    I'm sure eventually they will too...but for now, in some states you can still avoid the tax with Reverb, but not with eBay, in the same state.
     

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