How to verify if seller is legally collecting sales tax (CA)

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2m2037
Posts: 203
Joined: Mon May 08, 2017 4:48 pm

How to verify if seller is legally collecting sales tax (CA)

Post by 2m2037 » Tue Jul 10, 2018 12:40 pm

I'm looking at buying something via an online forum (not my first purchase), and sellers do not usually tack on a sales tax after agreeing on a price. However this person claims that he needs to collect sales tax as he is selling through his (online) business, and I'm looking for ideas on how to verify this. If it's a legitimate claim, I'm ok with paying the tax. I'm just unsure if he's just trying to get an extra 9% out of me under the guise of "sales tax".

Do I ask for a permit number? Is there a website I can enter the business name or permit number in to validate this?

TIA. :sharebeer

GAAP
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Re: How to verify if seller is legally collecting sales tax (CA)

Post by GAAP » Tue Jul 10, 2018 12:42 pm

Ask for the seller's resale permit number. Verify at https://services.cdtfa.ca.gov/boewebser ... tion=SALES.

2m2037
Posts: 203
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Re: How to verify if seller is legally collecting sales tax (CA)

Post by 2m2037 » Thu Jul 12, 2018 5:56 pm

GAAP wrote:
Tue Jul 10, 2018 12:42 pm
Ask for the seller's resale permit number. Verify at https://services.cdtfa.ca.gov/boewebser ... tion=SALES.
Thank you.

michaeljc70
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Re: How to verify if seller is legally collecting sales tax (CA)

Post by michaeljc70 » Fri Jul 13, 2018 4:13 pm

Even verifying that they have a permit doesn't guarantee it is all being turned over. What do you care (other than as a good citizen)? They are legally on the hook for it.

Mako
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Location: Havre de Grace, MD

Re: How to verify if seller is legally collecting sales tax (CA)

Post by Mako » Fri Jul 13, 2018 5:26 pm

Not your concern imo. If you are supposed to pay tax on this transaction then you shouldn’t mind paying it. Do you verify that all companies you deal with are complying with employment and labor laws? Paying their corporate taxes?

Doctor Rhythm
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Re: How to verify if seller is legally collecting sales tax (CA)

Post by Doctor Rhythm » Fri Jul 13, 2018 6:50 pm

I just look at the bottom line. I don't care if part of the total is for bogus fees, taxes, surcharges that the seller has no intention of passing on.

TIAX
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Re: How to verify if seller is legally collecting sales tax (CA)

Post by TIAX » Fri Jul 13, 2018 7:15 pm

Doctor Rhythm wrote:
Fri Jul 13, 2018 6:50 pm
I just look at the bottom line. I don't care if part of the total is for bogus fees, taxes, surcharges that the seller has no intention of passing on.
Either you're ok with the price or you're not. Why are you wasting your time investigating some random internet seller?

Miakis
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Re: How to verify if seller is legally collecting sales tax (CA)

Post by Miakis » Fri Jul 13, 2018 7:26 pm

You can't, really. There's no public record for checking to see if retailers are properly filing sales tax unless the state files a lien or forecloses on their business for being delinquent.

As the consumer, your responsibility is to pay sales tax, or self-reported use tax if the seller doesn't charge you. So from your perspective, it's not bogus. One way or another, you are obligated to pay it.

The seller's responsibility is to remit all sales tax collected to the state, which you have no way of checking. You could check California's sales tax nexus rules to see if it seems realistic that the seller is required to collect sales tax in your state - but it can be hard to tell. Using a third party shipper, or fulfillment center, having an employee in the state, warehousing inventory, or even just making a certain amount of sales, are all things that can create nexus, but aren't necessarily easy for you to find out. Keep in mind that an ever increasing set of legal rulings is making it easier for states to impose sales tax obligations on online retailers.

Businesses do sometimes fail to remit sales tax (plenty of brick and mortar retailers, too!). They may do it because their business is struggling, or out of simple ignorance of the process. I don't think I've ever encountered a scenario where it's a pure scam and graft, but I'm sure someone is doing it.

2m2037
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Re: How to verify if seller is legally collecting sales tax (CA)

Post by 2m2037 » Wed Jul 25, 2018 6:40 pm

I should clarify - I was about to enter into a P2P transaction in which the seller claims to be an online business and thus needed to collect sales tax if I were to buy it from him, after we had agreed on a price.

For example.

If someone selling his old bicycle on Craigslist fraudulently claims that he runs an online shop buying and selling used bicycles, and as such is obliged to collect 9% on top of the agreed sale price, how would I be able to verify/call him out on this? I'm all for paying sales tax where it is due, and have always thought that private party transactions were free of sales tax. If buying a used item from a private seller online is renders me liable for sales tax, correct me.

randomguy
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Re: How to verify if seller is legally collecting sales tax (CA)

Post by randomguy » Wed Jul 25, 2018 6:50 pm

2m2037 wrote:
Wed Jul 25, 2018 6:40 pm
I should clarify - I was about to enter into a P2P transaction in which the seller claims to be an online business and thus needed to collect sales tax if I were to buy it from him, after we had agreed on a price.

For example.

If someone selling his old bicycle on Craigslist fraudulently claims that he runs an online shop buying and selling used bicycles, and as such is obliged to collect 9% on top of the agreed sale price, how would I be able to verify/call him out on this? I'm all for paying sales tax where it is due, and have always thought that private party transactions were free of sales tax. If buying a used item from a private seller online is renders me liable for sales tax, correct me.
If sales tax is due is very state specific. In some states (don't know CA off the top of my head) any private party sale technically is supposed to collect taxes. I doubt it happens very often. You verify it the same way you do that the places that offer 10% off for cash are paying their taxes on the money:)

Teague
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Re: How to verify if seller is legally collecting sales tax (CA)

Post by Teague » Wed Jul 25, 2018 6:50 pm

2m2037 wrote:
Wed Jul 25, 2018 6:40 pm
I'm all for paying sales tax where it is due, and have always thought that private party transactions were free of sales tax. If buying a used item from a private seller online is renders me liable for sales tax, correct me.
Everybody is a "private party." You, me, the kid selling lemonade, the owner of Joe's Mega Big Box Bike Shop. Whether they sell enough goods and services to have to declare themselves as a business, and are required to remit sales tax, that is another matter. If they are required to remit sales tax, they are allowed to pass that cost along to you. At least that's how it works in my state. If the price seems too high, I think your only option is tell them so and see if they will lower it.
Semper Augustus

Bogle_Bro
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Location: Frisco Texas, Mortgage Banker & Attorney

Re: How to verify if seller is legally collecting sales tax (CA)

Post by Bogle_Bro » Wed Jul 25, 2018 9:34 pm

Reminds me of my movers trying to rip me off by adding sales tax

Jerks.

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