Tax question on auctions 0

[Brian Peck]

A friend of mine had won a few items at an auction house last year and had them hold them to ship together with later items he may win. This year he moved from one state to other, the new state has a higher tax rate. He had paid off both items won last year and recently informed the auction house he had moved to a new state (with higher tax rate) and changed his billing and shipping address. Now they want to charge him the difference on the items he already paid tax on in the other state. Is that legal?

[GreatEscape]

Hey Brian!  Paying taxes on top of BP (and credit card charges for some) is no fun but it's the law.   Regardless of when you pay, Heritage retains custody of your items until shipped and they are required to collect taxes from buyers according to their shipping address.  Currently, I have a few months of wins paid for but held at Heritage, usually ship after the Signature auctions.  When you move and change your shipping address, the new state tax rates would apply.  FYI, any sales credit or consignments applied before shipping can offset/reduce the total taxable amount.

Perhaps, he has friends/family in his old state that might accept and forward the Heritage package.  

[cstojano]

So I should hold all lots and take a vacation in New Hampshire once a year. It might pay for itself. 

[GreatEscape]

Five states with no sales taxes: Alaska, Delaware, Montana, New Hampshire, and Oregon.  Fortunately, my daughter attends college in one of them. 

[vodou]

38 minutes ago, cstojano said:

So I should hold all lots and take a vacation in New Hampshire once a year. It might pay for itself. 

There are cheaper ways...and until all the locks here are lifted, there isn't much to do anyway but watch Netflix and Prime

[comix4fun]

1 hour ago, Brian Peck said:

A friend of mine had won a few items at an auction house last year and had them hold them to ship together with later items he may win. This year he moved from one state to other, the new state has a higher tax rate. He had paid off both items won last year and recently informed the auction house he had moved to a new state (with higher tax rate) and changed his billing and shipping address. Now they want to charge him the difference on the items he already paid tax on in the other state. Is that legal?

Yeah, it's where it's being shipped that dominates. 

Something similar happened to us years ago when we were buying a natural gas backup generator. We called in the order from Chicago, but it was being delivered to our summer home in Wisconsin where it was being installed. In that situation it actually saved us about 50% on the charged sales tax. 

[Unstoppablejayd]

1 hour ago, GreatEscape said:

FYI, any sales credit or consignments applied before shipping can offset/reduce the total taxable amount.

I said this to comiclink and they said I was wrong.. and still charge me the full tax even when paying by consignment. ....

[malvin]

23 minutes ago, Unstoppablejayd said:

I said this to comiclink and they said I was wrong.. and still charge me the full tax even when paying by consignment. ....

I never clued in on that part! I usually pay by consignment for clink. Never thought about asking them to not charge sales tax when they started charging.

Is this a black and white thing (i.e. you dont pay tax if you are paying via seller credit) or is there a grey zone requiring interpretation?

[Unstoppablejayd]

26 minutes ago, malvin said:

I never clued in on that part! I usually pay by consignment for clink. Never thought about asking them to not charge sales tax when they started charging.

Is this a black and white thing (i.e. you dont pay tax if you are paying via seller credit) or is there a grey zone requiring interpretation?

I thought it was a thing then Clink told me no.. so seeing it here I would like to find out. 

[Brian Peck]

2 hours ago, GreatEscape said:

Hey Brian!  Paying taxes on top of BP (and credit card charges for some) is no fun but it's the law.   Regardless of when you pay, Heritage retains custody of your items until shipped and they are required to collect taxes from buyers according to their shipping address.  Currently, I have a few months of wins paid for but held at Heritage, usually ship after the Signature auctions.  When you move and change your shipping address, the new state tax rates would apply.  FYI, any sales credit or consignments applied before shipping can offset/reduce the total taxable amount.

Perhaps, he has friends/family in his old state that might accept and forward the Heritage package.  

When Heritage holds items and them ships multiple ones together, they never credit you the shipping cost saved when combining the art into one shipment.

[RBerman]

Profiles in History asked me whether I was a dealer (and thus exempt from sales tax) or not.

[Rick2you2]

3 hours ago, Brian Peck said:

A friend of mine had won a few items at an auction house last year and had them hold them to ship together with later items he may win. This year he moved from one state to other, the new state has a higher tax rate. He had paid off both items won last year and recently informed the auction house he had moved to a new state (with higher tax rate) and changed his billing and shipping address. Now they want to charge him the difference on the items he already paid tax on in the other state. Is that legal?

I can’t give you a legal opinion on this, but it sounds like it has to do with the difference between a “use  tax” and a sales tax (which the states generally set at the same rate). Since the art involves the shipment of goods from one state to another, not the use of the product in the purchased state, sales tax technically doesn’t apply. But, with the art sent into a state for use after being bought elsewhere, you get hit with the use tax to where it is shipped.

[cstojano]

20 minutes ago, Brian Peck said:

When Heritage holds items and them ships multiple ones together, they never credit you the shipping cost saved when combining the art into one shipment.

I am convinced they use a random number generator to calculate shipping on held lots. 

[GreatEscape]

2 hours ago, Unstoppablejayd said:

I thought it was a thing then Clink told me no.. so seeing it here I would like to find out. 

I checked HA website and it doesn't look like sales taxes can be reduced via consignments.  Apologies, I had recalled when I recently bought a car and the gross amount for sales tax was reduced by the value of my trade-in.  Sorry mates, I think sales taxes are ALWAYS collected ...so it goes back to which state you are shipping to..

[malvin]

5 hours ago, GreatEscape said:

I checked HA website and it doesn't look like sales taxes can be reduced via consignments.  Apologies, I had recalled when I recently bought a car and the gross amount for sales tax was reduced by the value of my trade-in.  Sorry mates, I think sales taxes are ALWAYS collected ...so it goes back to which state you are shipping to..

aiya, too bad. Reading this does make me recall that the one time I had a trade in when I bought a car, they subtracted the trade in before they applied sales tax.

If only this were a thing for OA auctions, it would fuel a virtuous cycle with the auction houses, people would be more inclined to pay via consignments than cash!

Malvin

[Brian Peck]

7 hours ago, cstojano said:

I am convinced they use a random number generator to calculate shipping on held lots. 

No they charge you when the auction is over and if you hold items and a number are shipped together. They save money on the shipping and they keep what they over charged you.

[tth2]

15 hours ago, Brian Peck said:

When Heritage holds items and them ships multiple ones together, they never credit you the shipping cost saved when combining the art into one shipment.

Yes they do.

[cstojano]

11 hours ago, Brian Peck said:

No they charge you when the auction is over and if you hold items and a number are shipped together. They save money on the shipping and they keep what they over charged you.

I guess what I was being snarky about was how the individual lot shipping costs seem random. I bid on a multiple lots of animation cels over the last year and had them all shipped basically at one time. The lot to lot shipping cost was all over the place for what was essentially the same item (size, weight, value). Sometimes it was +6 dollars, sometimes +13 - made no sense.

[Rick2you2]

4 hours ago, cstojano said:

I guess what I was being snarky about was how the individual lot shipping costs seem random. I bid on a multiple lots of animation cels over the last year and had them all shipped basically at one time. The lot to lot shipping cost was all over the place for what was essentially the same item (size, weight, value). Sometimes it was +6 dollars, sometimes +13 - made no sense.

Can you ask?
 

[cstojano]

1 hour ago, Rick2you2 said:

Can you ask?
 

Given what I was spending overall I felt a bit silly about asking for 5 dollars here and there. It was cheaper in the end than posting lots separately, but hardly at cost shipping.