Sales tax on Reverb

dboomer

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Excuse me if I missed this in earlier posts. Why do you pay sales tax on the shipping cost? To my way of thinking only the cost of the item should be used to calculate tax. Although this may be the government's way of preventing people from selling items for virtually nothing and then charging exaggerated shipping cost.
That’s how the rule in California is written Labor is also taxable.
 

studrum

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Excuse me if I missed this in earlier posts. Why do you pay sales tax on the shipping cost? To my way of thinking only the cost of the item should be used to calculate tax. Although this may be the government's way of preventing people from selling items for virtually nothing and then charging exaggerated shipping cost.
It might be, but shipping is a service and has value; it's something you buy and FedEx etc. sells, so maybe that's why they charge tax on it.
 

Corbin L Douthitt

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I recently purchased a cymbal on Reverb and was unknowingly hit with sales tax, bringing the purchase price up (guess I haven’t bought/sold anything on there for awhile but anyway....)
This week I SOLD another cymbal and my sale revenue was REDUCED by the tax amount.
So I was charged sales tax as both the buyer and the seller. How does that work?
You need to be talking to REVERB about their tax policy. Sounds like you paid tax where you purchased. And where you sold. SOUNDS like REVERB has found a revenue source
 

kzac

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Taxation is related directly to your state, Reverb is only complying with the law. Contact your state representative if you have issues with sales taxes, its their authority which is being imposed upon your purchase.
 

studrum

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Taxation is related directly to your state, Reverb is only complying with the law. Contact your state representative if you have issues with sales taxes, its their authority which is being imposed upon your purchase.
This^^^^
 

Piggpenn

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Are you saying that, as a seller, you've had buyers that expect you to sell a $100 item for $93.35 (assuming a 7% tax rate)?
No, I'm not saying it. Someone else did in context of another statement. I just commented. You're math is spot on. :)
 

ARGuy

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No, I'm not saying it. Someone else did in context of another statement. I just commented. You're math is spot on. :)
Thanks! The sales tax math is something I learned years ago and have to use often enough that I usually get it right.
 

Piggpenn

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Thanks! The sales tax math is something I learned years ago and have to use often enough that I usually get it right.
I hear you. I did retail sales for 20 years and would negotiate total price on package deals and then backwards figure each item for the in-house beaners.
 

rentadrummer

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It is a bit of a burn that sellers pay fees on the tax.
My experience is different.

I just completed my one and only sale on Reverb. The fees were slightly less than I had anticipated because they were charged on the selling price only and not on the additional sales tax. In this case it wouldn’t have amounted to that much difference because the selling price was fairly low, but on a more expensive item it would be a significant savings.
 

drumtimejohn

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I encourage a closer look. It’s not on the sellers fee but rather the processing fee. PayPal for example will charge 2.9% plus .30 on the total price of goods sold (item, shipping, and now taxes). So in this example, you now play 2.9% on the tax. Not a lot and probably consistent with credit card processing methods but undesirable nonetheless.
 
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rentadrummer

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I did take a closer look, and I misread their processing fee as 2.9% plus .25, but in fact it's 2.7%, plus .25. It doesn't seem like much difference, but in this case 2.9% on the sales price turns out to be exactly the same amount as the 2.7% on the sales price including tax, which is where I was confused. Thanks for catching that.
 

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