Online Sales

[luckydog64]

Some of you may be interested in this article. https://www.cnbc.com/2021/03/26/its-goi ... sales.html

[tongueriver]

That is an especially bitter pill for me to swallow, because I have taken a loss on nearly every knife I ever sold. And if I count the more hidden aspects of profit and loss, like inflation loss, diversion from more profitable investments, etc., I have lost money on EVERY knife I ever sold. Life is good.

[Gunsil]

Not to worry Cal, they only tax you on the profit, so if you lose money you should then be able to write the loss off. In general it really sucks, the American people need to stand up against this sales tax being charged for sales or purchases from another state other than that which you reside in unless the seller does business in your state just like it was two-three years ago.

[kootenay joe]

These changes to U.S. tax laws are going to create one huge confounding mess.
One problem for old collectors selling off their knives is that they likely cannot remember or prove what they paid for a knife when buying it years ago. How will IRS prove you made a profit ? Or will you be taxed on the full selling price if you cannot produce a receipt from when you bought it ?
IRS will need to hire hundreds of extra employees to try to track down all the online sellers.
kj

[herbva]

Not to worry Cal, they only tax you on the profit, so if you lose money you should then be able to write the loss off. In general it really sucks, the American people need to stand up against this sales tax being charged for sales or purchases from another state other than that which you reside in unless the seller does business in your state just like it was two-three years ago.

Gene, right now I'm pretty pissed about this, and obviously need to do more research. But all I have read so far indicates that since I don't have my knife addiction set up as a business, it is considered to be a hobby, and therefore every cent I have received in sales is taxable income, and no expenses can be deducted. I know that sounds pretty crazy. Every year I have diligently kept my sales below the $20,000 and 200 transaction threshold, and I managed to stay below both thresholds for 2020. To my rather unpleasant surprise, I received a 1099K from Paypal, showing my entire sales (gross receipts) this past year as taxable income. After inquiring with Paypal, I found out that my sweet state of Virginia had quietly changed the threshold for 2020 to $600 in receipts and Paypal is forced to comply. From what I have been able to calculate working backwards, I think that what I have spent on knives plus supplies in 2020 is roughly the same as what I received from the knives that I sold, but I am being forced to set up a business in order to net the costs out. And then if you have a loss, the hoops you have to jump through to write the loss off seem incredible. I know that I would have had to deal with this problem for 2021, since the federal threshold is going to $600, but I'm not a happy camper right now.

[Papa Bones]

Another fine example of underhanded bureaucratic inclusion of laws to keep them invisible to the public. This was added due to a provision in the American Rescue Plan Act which was touted to help small business stay afloat during the Covid shutdowns.

[kennedy knives]

Not to worry Cal, they only tax you on the profit, so if you lose money you should then be able to write the loss off. In general it really sucks, the American people need to stand up against this sales tax being charged for sales or purchases from another state other than that which you reside in unless the seller does business in your state just like it was two-three years ago.

Gene, right now I'm pretty pissed about this, and obviously need to do more research. But all I have read so far indicates that since I don't have my knife addiction set up as a business, it is considered to be a hobby, and therefore every cent I have received in sales is taxable income, and no expenses can be deducted. I know that sounds pretty crazy. Every year I have diligently kept my sales below the $20,000 and 200 transaction threshold, and I managed to stay below both thresholds for 2020. To my rather unpleasant surprise, I received a 1099K from Paypal, showing my entire sales (gross receipts) this past year as taxable income. After inquiring with Paypal, I found out that my sweet state of Virginia had quietly changed the threshold for 2020 to $600 in receipts and Paypal is forced to comply. From what I have been able to calculate working backwards, I think that what I have spent on knives plus supplies in 2020 is roughly the same as what I received from the knives that I sold, but I am being forced to set up a business in order to net the costs out. And then if you have a loss, the hoops you have to jump through to write the loss off seem incredible. I know that I would have had to deal with this problem for 2021, since the federal threshold is going to $600, but I'm not a happy camper right now.

Herbva don't forget now you will owe state Sales tax on your sales also . I pay State Sales Tax on all knife sales and don't charge the buyer . It's a pain every month having to pay sales tax and keeping Quickbooks for the end of the year for the IRS

[Gunsil]

Herb, I totally agree that this situation stinks. I have a friend who does a lot of ebay knife sales and I'm pretty sure he doesn't have a registered business or a sales tax number. He is in NY, but I don't think this makes a difference. I haven't done much selling on the bay, I prefer the knife shows, now I will definitely stay away from ebay selling and I wonder if others will now quit selling there.

[edge213]

Let me first say, Americans pay way to much in taxes. That is because the American taxpayer is taking care of most of the world.
And then they will raise our taxes to pay for things like Creepy Joe's socialist agenda.

I pay income taxes on all of my income. When I owned a business I paid sales tax on everything I sold and income taxes on my profits.
If you are a knife dealer, why shouldn't you be paying taxes on on your sales. Obviously most with stores and eBay are selling with the intent of making a profit. Proof can easily be found when $100 knife is being listed for 3 to 4 times the original cost.

Isn't that kinda the definition of being in business?

[johnburrell]

Here’s an interesting viewpoint. I’m in Cattaraugus County, NY. I’m also Mayor of Ellicottville. As brick and mortar retail stores close, states, counties and cities receive less sales tax revenue. In our county, the state gets 4%, the cities I believe keep 4%. The state sends the remaining 4% back to the county. I’m not sure how much the county keeps but after they keep theirs, the rest is distributed to the towns and villages based on their assessed valuations. In our little village our sales tax revenue (based on above) is 60% higher than the amount we raise in our property taxes. The less sales tax we receive, the more we have to raise in property tax. Granted it’s hard to live and do business in NY. As more and more business is done online (example Amazon out of state) the less revenues our small community receives. I’m not saying I agree. I just wanted to share this view. I believe in a FLAT TAX FOR ALL!

[edge213]

Here’s an interesting viewpoint. I’m in Cattaraugus County, NY. I’m also Mayor of Ellicottville. As brick and mortar retail stores close, states, counties and cities receive less sales tax revenue. In our county, the state gets 4%, the cities I believe keep 4%. The state sends the remaining 4% back to the county. I’m not sure how much the county keeps but after they keep theirs, the rest is distributed to the towns and villages based on their assessed valuations. In our little village our sales tax revenue (based on above) is 60% higher than the amount we raise in our property taxes. The less sales tax we receive, the more we have to raise in property tax. Granted it’s hard to live and do business in NY. As more and more business is done online (example Amazon out of state) the less revenues our small community receives. I’m not saying I agree. I just wanted to share this view. I believe in a FLAT TAX FOR ALL!

I agree with flat tax. Everyone pays the same percent of income. From the paper boy to the billionaire.
No deductions for anything, just straight up percentage of income. Fair to all.

[Paladin]

This is a crappy deal. I guess my next question is "will Bryan be giving us a 1099 for our store sales if the total is in excess of $600?"

Ray

[peanut740]

Cash is still king!

[Louisville.Boy1947]

Here’s an interesting viewpoint. I’m in Cattaraugus County, NY. I’m also Mayor of Ellicottville. As brick and mortar retail stores close, states, counties and cities receive less sales tax revenue. In our county, the state gets 4%, the cities I believe keep 4%. The state sends the remaining 4% back to the county. I’m not sure how much the county keeps but after they keep theirs, the rest is distributed to the towns and villages based on their assessed valuations. In our little village our sales tax revenue (based on above) is 60% higher than the amount we raise in our property taxes. The less sales tax we receive, the more we have to raise in property tax. Granted it’s hard to live and do business in NY. As more and more business is done online (example Amazon out of state) the less revenues our small community receives. I’m not saying I agree. I just wanted to share this view. I believe in a FLAT TAX FOR ALL!

I agree with flat tax. Everyone pays the same percent of income. From the paper boy to the billionaire.
No deductions for anything, just straight up percentage of income. Fair to all.

I would disagree with a flat tax if it would be imposed as a sales tax as it has been done in some countries that have tried a flat tax. I presume a good number of the members of this forum are retirees and they would be impacted more than non retirees. Most retirees have savings and or IRA's. Most retirees got their savings and IRA's from income they earned, upon which taxes have already been paid once. Now you want to tax me/us again when I spend my (non IRA funded) savings ? Regular (non IRA) funds were taxed by the Fed. Gov. and in most cases the state gov. in the year the income was earned. IRA accounts are taxed when funds are withdrawn, with the exception being Roth accounts. When I have a face to face conversation I have found without exception that everyone I have talked with admit they had not thought through the practical effects of a flat tax, or whether all the hidden taxes (telephone, luxury, gas, etc.) would be eliminated or just continue on instead of being replaced (another example of double taxation), the effect upon lower income families getting any form of subsidy via e/b/t including taxing social security income, etc. There is lot more thought that needs to go into a decision on a flat tax than appears on the surface. A good number of individuals that have " not " accumulated wealth that income tax has already been paid, would be willing to buy into the argument that an lower tax rate would be paid as compared to the current tax rate. These individuals are wanting you to be taxed again so they can benefit. .....

[wlf]

Here’s an interesting viewpoint. I’m in Cattaraugus County, NY. I’m also Mayor of Ellicottville. As brick and mortar retail stores close, states, counties and cities receive less sales tax revenue. In our county, the state gets 4%, the cities I believe keep 4%. The state sends the remaining 4% back to the county. I’m not sure how much the county keeps but after they keep theirs, the rest is distributed to the towns and villages based on their assessed valuations. In our little village our sales tax revenue (based on above) is 60% higher than the amount we raise in our property taxes. The less sales tax we receive, the more we have to raise in property tax. Granted it’s hard to live and do business in NY. As more and more business is done online (example Amazon out of state) the less revenues our small community receives. I’m not saying I agree. I just wanted to share this view. I believe in a FLAT TAX FOR ALL!

I here you loud and clear.
Taxes aren't the enemy, low wages and disparity are the culprits. You never heard any cry from "the people" when taxed during my boyhood. When workers can buy a car and house, raise a family without spouses working and have retirement, nobody cares how much taxes are. Greed is where taxes are the enemy.
Taxation , like a lot of politics is a diversion from the real problem. I like the idea of a flat tax too.

[wlf]

Here’s an interesting viewpoint. I’m in Cattaraugus County, NY. I’m also Mayor of Ellicottville. As brick and mortar retail stores close, states, counties and cities receive less sales tax revenue. In our county, the state gets 4%, the cities I believe keep 4%. The state sends the remaining 4% back to the county. I’m not sure how much the county keeps but after they keep theirs, the rest is distributed to the towns and villages based on their assessed valuations. In our little village our sales tax revenue (based on above) is 60% higher than the amount we raise in our property taxes. The less sales tax we receive, the more we have to raise in property tax. Granted it’s hard to live and do business in NY. As more and more business is done online (example Amazon out of state) the less revenues our small community receives. I’m not saying I agree. I just wanted to share this view. I believe in a FLAT TAX FOR ALL!

I agree with flat tax. Everyone pays the same percent of income. From the paper boy to the billionaire.
No deductions for anything, just straight up percentage of income. Fair to all.

I would disagree with a flat tax. I presume a good number of the members of this forum are retiees and they would be impacted more than non retirees. Most retirees have savings and or IRA's. Most retirees got their savings and IRA's from income they earned, upon which taxes have already been paid once. Now you want to tax me/us again when I spend my (non IRA funded) savings ? Regular (non IRA) funds were taxed by the Fed. Gov. and in most cases the state gov. in the year the income was earned. IRA accounts are taxed when funds are withdrawn, with the exception being Roth accounts. When I have a face to face conversation I have found without exception that everyone I have talked with admit they had not thought through the practical effects of a flat tax, or whether all the hidden taxes (telephone, luxury, gas, etc.) would be eliminated or just continue on instead of being replaced (another example of double taxation), the effect upon lower income families getting any form of subsidy via e/b/t including taxing social security income, etc. There is lot more thought that needs to go into a decision on a flat tax than appears on the surface. A good number of individuals that have " not " accumulated wealth that income tax has already been paid, would be willing to buy into the argument that an lower tax rate would be paid as compared to the current tax rate. These individuals are wanting you to be taxed again so they can benefit. .....

You pay on them now anyway, but as a recipient of what you say ,I am sympathetic to your argument for adjustments.
I live in WV and the Governor wants to do away with individual state taxes. Sounds great, but who will make up the budget deficits? Sales taxes and higher taxes which directly affect the consumers, "the people".

Doing away with and tax reductions on corporate and wealthy have never shown positive impacts on the economy, just Wall Street, which has become the wealthy;s poker game and we're the suckers playing with them.

[beresman]

Gene, right now I'm pretty pissed about this, and obviously need to do more research. But all I have read so far indicates that since I don't have my knife addiction set up as a business, it is considered to be a hobby, and therefore every cent I have received in sales is taxable income, and no expenses can be deducted.

As a (very) part-time musician and private music teacher, I never set up an actual business; I just filled out a Schedule C showing income and expenses. I've done that every year for probably 20 years, and the IRS has not blinked an eye. Granted, my income from that has never been more than about $6000 per year, and expenses have offset a fair portion of that some years.

It may be that your state requires that you set up an "official" business, but here in Ohio, I never did, and it hasn't yet been a source of grief.

[herbva]

Gene, right now I'm pretty pissed about this, and obviously need to do more research. But all I have read so far indicates that since I don't have my knife addiction set up as a business, it is considered to be a hobby, and therefore every cent I have received in sales is taxable income, and no expenses can be deducted.

As a (very) part-time musician and private music teacher, I never set up an actual business; I just filled out a Schedule C showing income and expenses. I've done that every year for probably 20 years, and the IRS has not blinked an eye. Granted, my income from that has never been more than about $6000 per year, and expenses have offset a fair portion of that some years.

It may be that your state requires that you set up an "official" business, but here in Ohio, I never did, and it hasn't yet been a source of grief.

Thanks, that is exactly what I'm going to do. I already have the schedule C filled out. I just don't understand why Uncle Sam is going after my peanuts instead of the ultra wealthy who don't pay a cent. I know it won't happen, but I would love to see a flat tax.