In the good ole' USA the Federal Tax Man will soon be taking more of your money through on-line sales, such as from E-Bay auction transactions.

From what I understand, both sides of a transaction will be federally taxed (if both the seller and buyer are located in the USA) in addition to the already well known State taxes that many re-sellers (And E-Bay stores) make mention of in US based Auctions (8-1/4% Tax if Both seller and buyer are located in North Texas, etc.).

I have no idea how they plan to take more of the overseas bidders/sellers money, but I am sure they will soon be finding ways to pick their pockets too.....

I think this will cause sites like this one to spring up everywhere, and somewhat less activity on E-Bay (And the other auction web sites, pathetic as they may be), with more so-called off-line transactions being made through E-Mails, snail-mail, long-distance phone conversations, etc.... Not to mention that sellers (If they be clever enough and computer savy enough) will start Off-Shore accounts to avoid the pesky little Tax Man. Of course this will soon bread new international laws and other unforseen problems.

The cat is out of the bag and the bag is now filled with snakes.....

Would someone please post stats for that reclusive beast? A breif description would help. I understand they are often assisted by 'snivelling auditors' as well.

I am following this with great interest as well.  I know that they have been "rattling the sabre" for a long time with this, but I haven't heard anything that is specifically in the works yet. Based on our currently elected government, I will not be suprised.

Just to let know our friends on the other side of the ocean, in Old Europe EVERYTHING you buy from a company (not an individual via ebay) has a stiff VAT tax attached, be it for personal use or company use.

In Italy this is around 20% of the total value.

Actually, since if u are a company then you have to pay VAT on the services you're selling, you write down the VAT u've been paying on what you've bought from this amount.

Personal transactions pay NO VAT if conducted in the same country, or in Europe - but it seems that the seller have already paid the tax when he bought the object.

We have already been ripped off by the taxman, thanks....

I believe you have to pay personal income taxes on any personal transaction, through the classifieds or Ebay, if you make a profit.
Any profit must be declared as income.

If you sell used items for less than you originally paid, you don't have to pay taxes on them.

You are supposed to pay state sales tax on anything you purchase outside of the state. For example, you are supposed to pay Maryland sales tax on any item purchased in Delaware, which has no sales tax. The state tax manuals usually have supplemental forms for paying this tax.

The IRS can feel free to try and figure out if I am making money on my Ebay transactions. I think this only really affects large sellers who do it as thier only source of income, because the cost of trying to monitor that for alittle fish like myself, would far outweigh the amount of revenue that they would create by trying to tax me on my sales. Fact is at this point I am still building my collection, so I am currently not making any money. However, when I do decide to sell off my collection, the IRS can kiss my white a$$ if they think that they will be having their grubby little hands in my pocket, because they will have to prove that I am actually making money based on the amount I actually spent in order to obtain my collection.

"The IRS can feel free to try and figure out if I am making money on my Ebay transactions."

I know what you mean. And I believe you get to add all of your gains and losses together for a year. But the only problem is the way I understand it, if they audit you, they will place the burden of proof on you to document your purchase prices and gains and losses, etc. Otherwise, they may assume that whatever you sold is profit, and tax you accordingly. But I agree they will probably not come after anyone with small number of sales - unless they have some evidence you are hiding a larger number, etc.

This discussion comes up every April, and every April I say the same thing: relax, at least for another year.

For individual sellers (not businesses who also happen to be involved with eBay), here's three things to remember:

1. The IRS has traditionally not taxed what could be called "hobby" or "non-dependent" income, unless, for some reason, both parties wish to be taxed. Dependent income would be a full-time job, or major freelancing projects, etc. — income needed to live and eat. Non-dependent income is just what it sounds like.
2. eBay has NOT provided buyer and seller data to the IRS (at least not yet), so the horror stories you've heard about paying back taxes from 1998 are simply not true.
3. All sides involved here have a LOT of details to work out before any of us start paying eBay taxes. There's state laws, federal laws, interstate commerce laws, the dependent-vs.-non tradition mentioned above, the "who pays?" and "how much?" questions, etc.

Bottom line: if you are making the majority of your income on eBay, need eBay to eat and pay rent, or are running an eBay-based business, then, yes, it's probably a really, really good idea to claim your eBay sales as income. If you're just a D&D fan who wouldn't mind making a buck or two on eBay, then don't give it a second thought (and stop believing everything you hear from those fine reporters on the Today Show).

Tax Man

Frequency: Rare
No. Appearing: 1
Armor Class: 10
Move: 12"
Hit Dice: 1-4 Hit Points
% in lair: 0%
Treasure Type: Incidental
No. of Attacks: 1
Damage/Attack: 1-2
Special Attacks: Audit
Special Defenses: See Below
Magic Resistance: Standard
Intelligence: Very
Alignment: Lawful Evil
Size: M
Psionic Ability: Nil
   Attack/Defense Modes: Nil


One of the most feared creatures in the realm, the Tax Man usually appears as a nondescript, well-dressed human, but is in fact a resident of the Nine Hells. Controlled by the ArchDuke of Hell, Uncle Sam, it is drawn to wealth and power; the more of these an individual has, the greater the chance of being detected by the Tax Man. Once it has selected its quarry, the Tax Man will appear at the prey's lair or place of residence. Once arriving, it will subject the victim to an Audit, a merciless attack that drains the individual of will and reason, leaving only an empty, worthless shell. Once the victim is destroyed, the Tax Man will collect any valuables it can find, and bring them back to Uncle Sam, who adds them to his bottomless vault. There is no saving throw versus an Audit.
Attacking a Tax man usually results in disaster. If a Tax Man is damaged or slain, Uncle Sam will release other minions to deal with the offender, such as the FBI Man and Police Man. These creatures will hunt down the offender and attempt to capture him. If successful, they will transport the individual to Jail, located on the seventh plane of Hell.