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Sales tax also cripples the used/resale/refurbish product, making it more locally efficient to buy new instead of used, pushing used goods into the waste stream
by gowld 6y ago
Sales tax also cripples the used/resale/refurbish product, making it more locally efficient to buy new instead of used, pushing used goods into the waste stream.
- chaostheory 6y agoHow?
- buzzerbetrayed 6y agoWhy is this? Because people compare the used price to the pre-tax new price?
- mywittyname 6y agoHow so? 1) second-hand goods purchased from a non-business are usually tax-free. With the exception of vehicles. You're asked to pay sales tax on these purchases when filing your income tax each year, but in practice, noone does this. 2) I buy used/refurbished tools and furniture pretty frequently. How exactly is the second-hand market being crippled here?
- chrischen 6y agoAre you talking specifically about cash transactions? Because ebay collects sales tax now.
- mywittyname 6y agoMost sellers on eBay are businesses. But you can buy stuff on FB Marketplace or CL without paying sales tax, even if you use a service like venmo for handling payments. In most states, you are technically supposed to report these transaction on your income tax return, but enforcement of that is not practical for the state.
- vonmoltke 6y agoIn general, sellers only need to collect sales tax if they meet the legal definition of "reseller". The test varies from state to state, but is generally a combination of gross annual revenue from sales and number of sales transactions per year. Generally, transactions between private parties are not subject to sales tax. eBay was hit by special "marketplace facilitator" clauses in remote tax laws that have popped up since South Dakota v. Wayfair. The tax is actually imposed on the marketplace, not the seller. It doesn't matter what the seller's status is relative to the above, because it is eBay that is being required to remit he tax. If the seller is independently obligated to remit tax to a given state as well, they count the eBay-collected tax against their own obligation.
- chrischen 6y agoYes but in practice it means that reselling old used stuff is now taxed, which of course discourages the reuse part of the reduce, reuse, recycle paradigm. FB marketplace has the same tax requirement, so that only leaves cash transactions on craigslist now (which people probably wouldn't pay the tax even if were required).
- gamblor956 6y agoSellers of used products are still required to charge sales tax if they are in the business of making such sales.