Gunbroker FYI - GB to "facilitate" sales tax collection for all sales January 2021

[Erich]

If folks have not seen this yet/ GB will be collecting sales tax on completed auctions from the seller, including private party listings. Similar to eBay and Amazon.

Previously, it was left to seller to follow applicable laws.

For those planning on either buying or selling something, who may be concerned about this should plan timing accordingly.

Not advocating for avoidance, just an FYI as some have strong feelings about private party sales and taxation. 

[DaveTN]

I don't read this that they will collect taxes, do you?

https://support.gunbroker.com/hc/en-us/articles/360051436174-Sales-Tax

[Erich]

9 minutes ago, DaveTN said:

I don't read this that they will collect taxes, do you?

https://support.gunbroker.com/hc/en-us/articles/360051436174-Sales-Tax

Most assuredly, when referencing the appropriate article and or use of Google fu.

https://support.gunbroker.com/hc/en-us/articles/1260800233069-Marketplace-Facilitator-Sales-Tax-Collection

GunBroker.com will update this document as new information is available. Check back regularly.

Last Update: December 4, 2020

GunBroker.com will implementing the new Marketplace Facilitator Internet Sales Tax regulations on January 1, 2021.  As a marketplace, GunBroker.com will be required to collect and remit sales tax on all sales according to the state law.

What is a Marketplace Facilitator?

A Marketplace Facilitator is defined as an entity that provides a forum for sellers to promote their sale of physical property, digital goods, and services and is compensated for these services. As such, GunBroker.com is deemed to be a Marketplace Facilitator for sellers on the site.

What if I am a private seller and not a business?

Even as a private seller, you will have to collect and remit sales tax on your items. When the buyer completes the checkout process the appropriate tax will be calculated for the order. This tax will be paid to you as part of the payment you receive. In a manner similar to how you pay your GunBroker.com fees, GunBroker.com will bill and collect the sales tax amount from you. GunBroker.com, because of marketplace facilitator legislation, is required to report and remit the tax to the individual states for the transactions on the site.

How will this flow?

GunBroker.com will capture and record the sales tax related to each order. You will then remit that sales tax to GunBroker.com in the same manner as your monthly fees. These amounts will be periodically billed and collected via your payment method on file. GunBroker.com will remit the amounts collected to each state as the marketplace facilitator.

Will I have to change my listings?

No. On January 1, 2021 the GunBroker.com checkout process will begin charging sales tax on all orders. No changes to your listings will need to be made. Any existing tax information on your listings will be overridden by the new process.

[btq96r]

3 hours ago, Erich said:

Not advocating for avoidance, just an FYI as some have strong feelings about private party sales and taxation. 

How many of these private party sales are actually a store to private party transaction?

Edited December 9, 2020 by btq96r

[DaveTN]

14 minutes ago, btq96r said:

How many of these private party sales are actually a store to private party transaction?

I’d say the lions share of the guns are. At least most I look at have an FFL and can take a credit card. I was looking at it this week to move a couple of guns. But not being able to take a credit card is a stumbling block. Not a deal killer, but I would guess it certainly slows bids.

[QuackerSmacker]

3 hours ago, Erich said:

Most assuredly, when referencing the appropriate article and or use of Google fu.

https://support.gunbroker.com/hc/en-us/articles/1260800233069-Marketplace-Facilitator-Sales-Tax-Collection

GunBroker.com will update this document as new information is available. Check back regularly.

Last Update: December 4, 2020

GunBroker.com will implementing the new Marketplace Facilitator Internet Sales Tax regulations on January 1, 2021.  As a marketplace, GunBroker.com will be required to collect and remit sales tax on all sales according to the state law.

What is a Marketplace Facilitator?

A Marketplace Facilitator is defined as an entity that provides a forum for sellers to promote their sale of physical property, digital goods, and services and is compensated for these services. As such, GunBroker.com is deemed to be a Marketplace Facilitator for sellers on the site.

What if I am a private seller and not a business?

Even as a private seller, you will have to collect and remit sales tax on your items. When the buyer completes the checkout process the appropriate tax will be calculated for the order. This tax will be paid to you as part of the payment you receive. In a manner similar to how you pay your GunBroker.com fees, GunBroker.com will bill and collect the sales tax amount from you. GunBroker.com, because of marketplace facilitator legislation, is required to report and remit the tax to the individual states for the transactions on the site.

How will this flow?

GunBroker.com will capture and record the sales tax related to each order. You will then remit that sales tax to GunBroker.com in the same manner as your monthly fees. These amounts will be periodically billed and collected via your payment method on file. GunBroker.com will remit the amounts collected to each state as the marketplace facilitator.

Will I have to change my listings?

No. On January 1, 2021 the GunBroker.com checkout process will begin charging sales tax on all orders. No changes to your listings will need to be made. Any existing tax information on your listings will be overridden by the new process.

So the buyer pays the tax included in his payment to Gunbroker, GB sends all the $ to the seller, and then the seller sends the tax back to Gunbroker.  I think I've got that right, per info above.   Brilliant, absolutely brilliant.  NOT

[Garufa]

4 minutes ago, QuackerSmacker said:

So the buyer pays the tax included in his payment to Gunbroker, GB sends all the $ to the seller, and then the seller sends the tax back to Gunbroker.  I think I've got that right, per info above.   Brilliant, absolutely brilliant.  NOT

More or less if understand it correctly.  

So exactly how much personal information is GB going to send to the States when remitting the tax proceeds?

[QuackerSmacker]

1 minute ago, Garufa said:

More or less if understand it correctly.  

So exactly how much personal information is GB going to send to the States when remitting the tax proceeds?

Yeah, that's the real scary part.  I can't believe the state would not insist on full information about the parties and the item sold, for audit purposes.  They're not gonna just take the check blindly from Gunbroker without an audit trail being available.

[KahrMan]

10 minutes ago, QuackerSmacker said:

Yeah, that's the real scary part.  I can't believe the state would not insist on full information about the parties and the item sold, for audit purposes.  They're not gonna just take the check blindly from Gunbroker without an audit trail being available.

The state does not care what the item is that is sold, just the total sales.  I file sales tax reports every month.  All the state cares about is the total amount of sales.  That determines what they are owed in tax.  Even the one time I was audited, the auditor didn't care what we sold or who we sold it to just that the total of my invoices in my system equaled what I reported to the state.  

Because of the way Gunbroker is set up to operate, although a little convoluted, it is probably the most efficient way for them to collect the tax.

[Erich]

Outside those lovely thoughts, I have seen more than a few folks question if the agent as the collector, actually remits all the revenue to the state.

The end result is, the non dealer sellers who formerly were not collecting taxes will by adding to base amounts or somehow by stating add ons like transaction fees since they know they will get tapped for it on the backend.

Buyers pay more because seller cost goes up for non dealer base transactions where sellers where not adding in taxes. Or seller do as many did on ebay, and just stop using it. A Loose loose

The bad part is some of the more unique or rare items are sitting in private collections

 

[DJTC45]

Just one more reason to not use them, I'll be canceling and closing my GB account, I'm not about to pay nearly 10%tax on top of buying a $3500 + 1911, or any other collector grade guns. Just my $.02.

[QuackerSmacker]

2 hours ago, KahrMan said:

The state does not care what the item is that is sold, just the total sales.  I file sales tax reports every month.  All the state cares about is the total amount of sales.  That determines what they are owed in tax.  Even the one time I was audited, the auditor didn't care what we sold or who we sold it to just that the total of my invoices in my system equaled what I reported to the state.  

Because of the way Gunbroker is set up to operate, although a little convoluted, it is probably the most efficient way for them to collect the tax.

In the "normal" sales tax scenario, you have the buyer and the seller.  Buyer pays tax, seller sends it in.  Here you have buyer, intermediary, seller, and intermediary again, sending it in.   What happens if the seller doesn't send the tax back?   It's Gunbroker who's the big player and will get the scrutiny.  These differences are important, and I do believe it's probable that the  tax collectors will impose a stronger audit system where the "market facilitator" is the party that is supposed to send in the taxes.

[FUJIMO]

1 hour ago, DJTC45 said:

Just one more reason to not use them, I'll be canceling and closing my GB account, I'm not about to pay nearly 10%tax on top of buying a $3500 + 1911, or any other collector grade guns. Just my $.02.

THIS is what I've heard since Eflea started doing it and unfortunately I see it as no different than buying an item from a local auction house "estate sale" that doesn't charge sales tax but instead charge up to 18% premiums

[DJTC45]

That's why I don't go to auctions, some just don't know when to stop bidding. I'll just cruise the gun forums and buy from an individual until they figure out how to collect tax on that. My two Wilson CQBE's if I had to pay tax on those would have been close to $300. Not going to do that.

[QuackerSmacker]

2 hours ago, FUJIMO said:

THIS is what I've heard since Eflea started doing it and unfortunately I see it as no different than buying an item from a local auction house "estate sale" that doesn't charge sales tax but instead charge up to 18% premiums

But sometimes those auctions are very inefficient, and you can "steal" a gun occasionally, especially if you have specialized knowledge about particular firearms.  I haven't seen any buyer's premiums at 18%.  Highest I've ever seen is 13%, and I would say the most common I've seen is 10%.  So you factor that in as you bid, and it either makes sense, or it doesn't, but I would not rule those auctions out as a source of good stuff, because sometimes you can be the high bidder at a great price.  Just depends on who else is playing the game.  

The real deal is discipline, and not getting caught up in the bidding frenzy.  Set a number and stick to it.

[DaveTN]

Joe isn’t even in the Whitehouse yet and already they are increasing the taxes. 

[DaveTN]

Judging by what I see going on with pricing right now, I doubt 7-10% tax will slow things down much.