Third Party Press

Gunbroker Charging Taxes on Shipping Legal?

Hambone

Community Organizer
Staff member
I just saw that Gunbroker appears to have hit me for some added junk fees by apparently charging me 10% tax on my shipping. My state does NOT COLLECT SALES TAX ON SHIPPING AND HANDLING when it is itemized on a bill, as it is. Y'all need to make sure you aren't getting charged taxes on shipping if your state doesn't collect it.
See:
 
eBay has been doing that for years too. It's BS but they do it to make sure they get a piece of action when sellers charge more than actual cost for shipping. On eBay, if you charge actual shipping, you lose money after they take their cut, even with the small discount you get from USPS thru Feebay.
 
My communications from/to Gunbroker. According to Louisiana law, an entity like Epay or Gunbroker should not be collecting 10% tax on shipping as it is not collecting by the State.

Dear Sir or Madam,

You are quite mistaken in your assessment of taxes on shipping charges on Louisiana residents. The shipping is clearly itemized on the Gunbroker invoice. It is a separate item and it is not to be taxed. If you have charged that to any Louisiana residents then you owe them all a refund. If you have done this to any state residents with similar state tax laws and structures, then you owe them refunds as well. The only state tax which you should be collecting is on the value of the item purchased. Because the shipping charge is itemized, broken out from the item charge, you may not charge and collect tax on shipping charges. Please see the screen shot of your charge for me. The reason Amazon doesn’t charge me a 10% tax on shipping is because they are following Louisiana law and the La. Dept. of Revenue (“LDR”) guidelines.

Here is the part that you failed to adhere to in the website you cited, which is correct:

“...and state sales tax doesn’t generally apply to separately stated freight, shipping, or delivery charges when transportation is rendered subsequent to the sale (this must be clearly stated).”

Here you go:

“Are shipping & handling subject to sales tax in Louisiana?

In the state of Louisiana, the laws regarding tax on shipping and handling are slightly complicated. If the shipping cost of the item being shipped is stated separately on the invoice, no [tax on] shipping charge is necessary. It must be noted that if the item is ordered from another business and it must be shipped first to you, and then to the customer, any shipping or handling charges paid by you would be passed on to the customer.”

https://www.salestaxhandbook.com/louisiana/sales-tax-taxability

This is supported by the law in Louisiana, particularly Title 47 of the Louisiana Revised Statutes, which your lawyers should consult before charging Louisianans (or anyone else for that matter) tax on shipping, which is what you’ve been doing:

“ii. The following are examples of charges not considered part of the sales price because they are not related to costs incurred by the vendor to bring the product to market: (a). freight, shipping, or delivery charges from the vendor or the vendor’s agent directly to the customer after the sale has taken place when the following two conditions are met: (i). The seller of the tangible personal property separately states the charges for the actual delivery or transportation of the sold property from the place of the sale to the destination designated by the purchaser. (ii). On the invoices for the sale and transportation of tangible personal property, the place of the sale of the property, and the fact that the transportation is rendered subsequent to the sale and purchase and for the buyer's account, must be clearly determinable.

https://revenue.louisiana.gov/LawsPolicies/LAC61_I_4301_4.pdf


As you can clearly see from my invoice attached, my shipping charges are clearly separately stated and the shipping/transportation is clearly rendered subsequent to the sale and purchase. This is not a matter which would take very long to litigate. It would be a summary win. It could be the subject of a class action where every person from Louisiana whom you charged 10% tax on their shipping charges would be entitled to a refund from you. The question becomes have you been retaining these charges or remitting them to the LDR? I look forward to hearing from you or your attorneys.


GunBroker.com Support (GunBroker)

Nov 9, 2022, 2:03 PM EST

We pass all the components of the order, including shipping and handling, to them and tax charges are returned to us. Shipping is taxable in many states unless it contains only the actual cost of shipping.

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https://www.avalara.com/blog/en/nor...s-tax-on-shipping-a-state-by-state-guide.html

Thank you for using GunBroker.com.

Sent from my iPhone

Subject: RE: Why are you charging me taxes on shipping?
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"GunBroker.com" <support+id1765708@gunbroker.zendesk.com>

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Your request (1765708) has been updated and the response is below.

Your opinion matters!

We want to be sure you received a great support session.

Please take a moment to answer one simple question.
 
So fellas, the moral to the story: It appears to me that if a company, such as ebay or Gunbroker, is charging you taxes on the shipping charges and your state doesn't tax shipping charges (most don't) then you are owed a refund. I note that the other companies I deal with don't do this. Amazon doesn't do it.

Note that in Gunbroker's response they tell me that they "pass all the components of the order, including shipping and handling, to them and tax charges are returned to us." So, when we pay tax on shipping and they send everything to the state, what happens when the state says no tax is owed on shipping when they've already dinged me for it? Any of you ever gotten a refund? I haven't.
 
Typically, things like this dont get resolved till enough people ban together and file a class action or something similar. I know in may case when i do an invoice at my job in mass which charges tax on everything ! Doesn't charge tax on shipping.. "shipping is a service" not something that is taxed.

I was having a chat with Larry E. on the GB topic and he was saying they charge a processing "fee" to collect and distribute all these new taxes. Im sure they really didn't want to get involved either.. I was told this has something to do with the wayfarer decision. Im not sure at what high court this was decided ??

Both platforms ebay and GB will just keep adding and fees and costs till they price themselves out of business. I have spoken to more than one person now who has stopped using one or more of these platforms.
 
So fellas, the moral to the story: It appears to me that if a company, such as ebay or Gunbroker, is charging you taxes on the shipping charges and your state doesn't tax shipping charges (most don't) then you are owed a refund. I note that the other companies I deal with don't do this. Amazon doesn't do it.

Note that in Gunbroker's response they tell me that they "pass all the components of the order, including shipping and handling, to them and tax charges are returned to us." So, when we pay tax on shipping and they send everything to the state, what happens when the state says no tax is owed on shipping when they've already dinged me for it? Any of you ever gotten a refund? I haven't.
Good luck in communicating with Gunbroker. Unless you know someone that has the secret telephone number or e-mail to the top management you will never have any success in contacting them. In addition, they will most likely never return any e-mails from you especially when it concerns a refund. The unfortunate story is that if you deal with GB, you must just accept their terms whether you like it or not or go to another source for your needs. Best of luck...
 
I don’t sell on eBay anymore. They lost my business at the first of this year through no fault of their own, the Biden $600 in sales 1099 did that for me - I get 1099’d to death already, I don’t need a 1099 thrown in I’d have to account for on collecting crap I buy and sell.

As far as GB, with the added sales tax I absolutely search items out there, find the sellers brick and mortar or online store and buy direct.
 
There will be a large backlash when states start going after these large online retailers who charge sales tax. I recently fought with one who wanted to charge me sales tax (even as a business). I told them if they could show me documentation that my tax was paid to my state I would pay it. They said they could not provide documentation. In my simple mind, that means they are pocketing it. I would bet a nice steak dinner they don't break the $100,000 mark in Ohio and therefore do not file or pay.

As Bruce said, I strongly, strongly encourage you to find small businesses and deal direct with them. I do not say this JUST as a small business owner. I genuinely believe the fate of our country depends on people buying directly from small businesses. As a small business owner, I literally, depend on you guys buying my products. This christmas season try buying products from the people that make them.

Buying direct also makes economic sense. I am gobsmacked at the number of people who buy my products off of gunbroker when my website is in the listing! A guy recently bought a $133 bolt head ($125 on my website, because GB cost is $8) he paid almost $30 in the ambiguous "taxes and fees"! And don't forget, while I am on this tangent, ebay charges a 15% commission, while Amazon charges upwards of 30% on some products!!!!
 
All good points guys... The one problem with the items we collect you can just walk into any retail store and buy.. Some sellers even cant find buyers for things they have. Thats why the online marketplaces have been so successful.. There is no way would could have owned what we now own without the web. Its just plain and simple. Anyone who was around before WWW. knows how hard it was to find things.. Or learn things ect.

As far as what has been mentioned with GB is some smaller shops do have a "for sale in store as well" cop out for ending an auction and selling it off line. Also unlike ebay the GB checkout process can be circumvented . Not sure what recourse this has on the seller ? But, the last thing I bought I reached out to the seller and made a prearranged agreement on what I would pay him.. This of course doesn't always work but , its worth a shot.
Lastly like with real auctions that charge a hefty percentage you really just need to be prepared to pay the "juice" fee as some call it in the end.. This isnt a game for the weak and light pocketed but, in the end I think most of us value our money and would rather keep it or it go to the seller than to big brother !! Point made..
 
Gunbroker collects these taxes and do they remit them all to the state? A lawsuit on improper collection and remittance of taxes would yield a tremendous amount of information in the discovery process.
 
Gunbroker collects these taxes and do they remit them all to the state? A lawsuit on improper collection and remittance of taxes would yield a tremendous amount of information in the discovery process.
You that man?
 
Besides collecting these taxes; do they report the amount of the sale as income to the IRS? I just found out that sleezebay reports an individuals sales as income once the individuals sales go over $600.00! This is BS! A person has already paid income tax once they originally earned that income. Because they sell that item that they no longer want, need, or just need extra money to make ends meet does not make that income. If I sell a K98 here (no, I’m not selling one) for $1,500.00, or a helmet for $600.00; must I report that as income? WTH!!!!
 
You have always been required to report any income to the IRS. Illegitimate gambling, money earned selling drugs, cash tips whether as a waiter or prostitute, grandma leaves you a shoe box of cash, it is all required to be reported. The thresholds have changed over the years. (Don't forget, grandma may owe DEATH TAX on the amount given as well as YOU owe income AND/OR Gift tax)

If you and a friend trade rifles, you are required to report the values and pay sales tax in most states. The IRS will want the values of both reported as income.

I am sure as an upstanding citizen you want to pay your fair share and are always honest and forth coming at tax time. Remember the IRS is key to providing the goods and services you rely on. Who would pay billions in subsidies to correct for the market manipulation that prevents entire industries from being profitable?
 
eBay has been doing that for years too. It's BS but they do it to make sure they get a piece of action when sellers charge more than actual cost for shipping. On eBay, if you charge actual shipping, you lose money after they take their cut, even with the small discount you get from USPS thru Feebay.

It is the Sellers choice on eBay to collect taxes on shipping:

The seller is instructed to set up their account as described below:
  1. Go to the Sales Tax table page - opens in new window or tab.
  2. Fill in the sales tax rate for any state where you want to charge sales tax. If you're also required to tax shipping and handling in that state, select the Also charge sales tax on S&H check box.
  3. Select Save.
 

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