Collecting tax as an online used equipment sales broker (consignment sales)???

N

nlcllc

New Member
Jurisdiction
New York
Hi there,
My husband and I have started an online based business that "sells" used high end cinema equipment.
To be more exact, we find buyers and match them with sellers and collect a fee for doing so. We dont "sell " the way re-seller does. Its almost like consignment sales but we are brokering the deals. WE do not buy equipment nor do we hold inventory of any kind. We serve as escrow between buyer and seller. We work from home on our laptops and our business is 100% remote.

I've been given conflicting info whether or not we need to be collecting a sales tax. We currently reside in New York.

Any info/insight on this is highly appreciated!! Thank you!
 
nlcllc said:
Any info/insight on this is highly appreciated!! Thank you!
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Unfortunately without knowing the states involved in each sale there is no way to give you a good answer to that. Sales via the internet might involve any state, unless you specifically limit it to specific states. Remote sellers now face more potential obligation to collect sales taxes in other states as a result of the U.S. Supreme Court's fairly recent decision that overturned its decades long rule that states cannot impose a sales tax obligation on sellers unless they had a physical presence in the state. So states are now amending their tax laws to make use of this change. I suggest you consult a tax lawyer who practices in the area of interstate sales tax issues for advice on this. The laws vary significantly between states and there is also the issue that, while physical presence is no longer required, nexus with the state still is necessary.
 
Tax Counsel said:
Unfortunately without knowing the states involved in each sale there is no way to give you a good answer to that. Sales via the internet might involve any state, unless you specifically limit it to specific states. Remote sellers now face more potential obligation to collect sales taxes in other states as a result of the U.S. Supreme Court's fairly recent decision that overturned its decades long rule that states cannot impose a sales tax obligation on sellers unless they had a physical presence in the state. So states are now amending their tax laws to make use of this change. I suggest you consult a tax lawyer who practices in the area of interstate sales tax issues for advice on this. The laws vary significantly between states and there is also the issue that, while physical presence is no longer required, nexus with the state still is necessary.
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I understand, however why would this be considered a "sale " if we only broker a deal? We dont buy the item ahead and sell it for a profit ,nor do we hold inventory. We are essentially a broker. does that change anything?
 
nlcllc said:
I understand, however why would this be considered a "sale " if we only broker a deal? We dont buy the item ahead and sell it for a profit ,nor do we hold inventory. We are essentially a broker. does that change anything?
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It depends...you really need to consult with a local attorney who can review all of the relevant facts.

(Tax Counsel IS an attorney and gave the same advice.)
 
Zigner said:
It depends...you really need to consult with an attorney who can review all of the relevant facts.
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would this be tax attorney for New York? Our clients (buyers/sellers) are all over US and it would be impossible to get answers for each state.
 
nlcllc said:
would this be tax attorney for New York? Our clients (buyers/sellers) are all over US and it would be impossible to get answers for each state.
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That's the best place to start. Find one who is familiar with e-commerce.
 

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