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View Full Version : Is This Logical Thinking Regarding Tool Sales?



Mike Shields
12-06-2010, 11:41 AM
For no other reason than just something to do, I browse classifieds for tools. I'm always amused at the asking price (even if it's my own tool), especially when compared to what else is for sale in the market and also the price when new.

When someone lists a used tool (or anything material) for sale, and provides an itemized list and includes tax...what? I'm failing to see how tax should be considered in the selling (asking) price of a used anything?

I'm selling a used $45,000 vehicle. KBB or Edmunds does not include whatever taxes I paid in the retail/wholesale price they list.

I see no difference with that vehicle and a tool.

Am I thinking illogically?

Dan Hintz
12-06-2010, 11:49 AM
I don't believe I've ever seen a listing that was itemized, not to mention seeing tax...

Rich Neighbarger
12-06-2010, 11:55 AM
Indeed you are. I would ask the seller, to whom he reports his tax collections from his sales? As a matter of accounting, businesses do not keep the taxes they collect as all sales tax is collected for the state. The business must report the sales periodically to the state, and fork over all taxes. So, again, I would ask the seller, to whom he reports his tax collections for sales.

David Weaver
12-06-2010, 11:56 AM
I've seen them with tax on here for CL, along with lists of things sometimes that shouldn't even be included with the tool, or something like a comparable price for a commercial stand when someone decides to include a 2x4-made homemade stand with their tool.

People are goofy, but those of us who have tool problems are probably a lot more likely to understand the give and take of buying tools and then selling to upgrade or trade for something else than is a retiree who bought tools 15 years ago and didn't use them much, and feels like they should get all of their money back out of them (including taxes). It'd be nice if they could only list them once, though!

Mike Shields
12-06-2010, 12:02 PM
Indeed you are. I would ask the seller, to whom he reports his tax collections from his sales? As a matter of accounting, businesses do not keep the taxes they collect as all sales tax is collected for the state. The business must report the sales periodically to the state, and fork over all taxes. So, again, I would ask the seller, to whom he reports his tax collections for sales.

I not following you. Maybe I'm still being illogical as you indicated.

I did not indicate a private individual or a business.

Surely, your comments are not based on a private seller.

???????

Mark Bolton
12-06-2010, 12:16 PM
I am not sure I follow. Is the seller stating that tax will be charged on the sale? OR are they using it as a way to indicate what their out of pocket expense was (or what yours would be) if bought new?

I have seen sellers list the cost of an item if it were new or what they paid and included the tax in the total. This always seemed to me a way for an extremely "tight" individual to try to squeeze every dollar out of used item for sale.

I somewhat understand the logic as being in the construction business we on rare occasion have had conversations with customers who look at an invoice item and say "I can get that at XXX for 42.00" and I say yah, what about the tax? What about the fuel and time to go get it? These are of course out of pocket expenses for a business owner AND an individual but most always the individual is willing to discount these expenses.

That said, I have never thought of adding what I paid in tax into a used item for sale, or what I may have paid for shipping for that matter. But then again I commonly see items listed for sale here an on CL for 5% or 10% below retail and sometimes less than that. When I sell something I am almost always a 50% retail firm guy.

Mark

David Hostetler
12-06-2010, 12:17 PM
Businesses are required to collect sales tax on new, and used items here. Now private sales are another matter. The county tax assessor / collector (where we get our yearly vehicle registrations) collects sales tax directly as part of the cost of transferring a vehicle title.

Mike Shields
12-06-2010, 12:22 PM
Businesses are required to collect sales tax on new, and used items here. Now private sales are another matter. The county tax assessor / collector (where we get our yearly vehicle registrations) collects sales tax directly as part of the cost of transferring a vehicle title.

So, are you saying it's illogical for a private seller who's listing a used tool, to use the tax he paid in determining the asking price?

Mike Shields
12-06-2010, 12:32 PM
I don't believe I've ever seen a listing that was itemized, not to mention seeing tax...

If you did see it, would you think it illogical?

Roger Jensen
12-06-2010, 12:43 PM
I rarely see sales tax mentioned, and when it is it is because the seller is trying to make a compelling case for their used price, e.g. new Festool Domino sells for $800 + sales tax and I'll see you my used one for $700 without sales tax. I don't remember anyone charging sales tax on this board for used equipment.

Roger

sullivan mcgriff
12-06-2010, 12:53 PM
I do see it and love it, I paid 199.95 plus tax plus I drove 2 hours to get it and got a speeding ticket so my cost was $345.00 I only used it to build two houses and want 175.00

Eric DeSilva
12-06-2010, 12:58 PM
No, I don't think it is logical, but the question isn't either. You must draw a distinction here between a seller *valuing* something and a seller *marketing* something.

The actual value of a used product has nothing to do with how much one paid, whether sales tax or shipping was originally included, blah, blah. It has to do with what people are willing to pay for it used. If you find a dumb buyer who is willing to pay 120% of new cost for something, that is what it is worth. If you can only find someone willing to pay 1% of new cost, that is what it is worth. Definitionally, value is what something is worth, and something is worth what exactly what someone is willing to pay.

On the other hand, there are no limits to creativity in marketing, which I'll define as someone trying to induce you to buy. If I'm selling a gizmo for $50 and it cost $75 new, I might be inclined to say "this one is only $50, whereas if you bought it new, you'd pay $75 plus $3 tax and $10 shipping, so you aren't just saving $25, you're saving nearly $40!" But make no mistake. I'm not setting a value based on having paid taxes. I'm just marketing.

Dan Hintz
12-06-2010, 1:01 PM
If you did see it, would you think it illogical?
I wouldn't see it as illogical, I would see it as pointless. As others have said, it's most likely used as self-justification for a particular price point. But when I'm comparing two prices, I don't worry about tax... if the price is that close to new that 6% tax is a deal-breaker for them, I'll go buy new and be done with it. Savings of 25-50% are what get me to buy something from Craigslist... with such a wide range, 6% tax doesn't much figure into it.

Van Huskey
12-06-2010, 2:46 PM
I see it as a reminder for the thought challenged, though it might turn some people off like it may have the OP. Particularly for an expensive item and in areas that are upwards of 10% sales tax it might help justify the price to a buyer who may not have considered what the actual cost was/is to purchase a new one. I don't know how useful a selling strategy it is but I can say when I consider buying a used machine, for example, I compare the costs of a new machine with all associated costs of actually having it in my shop (shipping, tax etc) to the cost of having the usued one in the shop with all of its primary and secondary costs.

johnny means
12-06-2010, 7:09 PM
I live in Delaware, where we have no sales tax. Being a very small state, pretty much every area of the state is a state border. Lots of people are coming here as I type to do their Christmas shopping. They come here because our retailers make sure that everyone knows a about the absence of sales tax. I know I seldom shop in Philadelphia because of sales tax. So if sales tax has a bearing on peoples buying habits, why wouldn't a seller mention it. I know my entire state makes sure to mention it.

Mike Cruz
12-06-2010, 7:13 PM
This may be a little against the grain here, but let me pose a scenario for you. I bought some insulation for my shop a while back. 4x8 sheets of 3" thick foam with shiny aluminum backing on both sides. Great stuff. Loved it! But, I bought some extra. 9 sheets extra to be exact. Well, while cleaning out my shop today, I decided to finally get rid of it. Of course, I had to put a value or price on it. Here was my thinking...

I got the sheets for $19 each. I had to drive two hours in each direction to get it. Including load up time, it was 5 hours out of my day. Not to mention $40-50 of gas. Oh, and the guy I bought it from as a business, not some dude that had some extra, so yes, there was tax. Let's not even figure in wear and tear on my vehicle. At 35 or so sheets, my cost was about, or the "value" was about $21 each sheets.

So, in my mind, to sell this to someone else, if the buyer were to go get the sheets him/herself, the tax and delivery DOES enter into the equation because I don't charge tax, but it tax was part of what I paid. So, if I were selling them on CL, I probably would have charged $21 per sheet to recoup my money. BUT, I sold them to a friend (my sawyer) for less than $15 each because he was doing me a favor by taking them TODAY. And I didn't have to hold on to them any longer, make up an ad, deal with a million questions, have no shows, and have a stranger off CL come by my house and haggle me down.

In short, the value, in my mind, comes from what it cost me vs what it would cost someone else to get it.

When bidding on a piece at an auction, you HAVE to factor in the tax and fees (if any) in your bidding price. Otherwise, that $850 bid turns into $1000. And maybe you could have gotten it for $1300 NEW...delivered. So, why wouldn't delivery and tax be part of the equation IF someone chose to put that into the "value". Think about it. If someone advertised their used TS for $500 and you say, heck, I could get a new one for $700 from Company X next week on their "sale", could you really get it for $700? No. (Unless they are offering free shipping...but ingore that for a moment.) With tax and delivery, you are probably up to more like $850 to $900. In my mind, you HAVE to factor that in. In which case, $500 with no tax and around the block is significantly less than $900 new, delivered.

Chip Lindley
12-06-2010, 7:34 PM
For no other reason than just something to do, I browse classifieds for tools....

And I thought I was spending too much time on CL!! But, I am persuing my quest of actual woodworking bargains. Being retired, I usually spend a half hour, twice a day, browsing CL, if nothing interrupts! Not only the 9 areas of Missouri, but also parts of Kansas, Nebraska, Iowa, Illinois, Indiana, Kentucky, Tennessee, Arkansas and Oklahoma!! (just in case....)

No way do I read every ad, but scan the Tools listings for key words that jump out at me like "Powermatic" or "Rockwell" or "Porter Cable" or "Big Wood Joiner"! Many asking prices are far too rich for my blood, as the OP mentions. Some are clearly demented, like an old Sears 6" jointer around Columbia MO for $995!! lol But, some ligitimate offerings are breathtakingly cheap! I just missed an old Delta/Crescent 8" Jointer with cast iron base for $50 in Independence MO!!! Who cares if it only had a 1/2hp motor on it.

The general public has some very wide ideas on pricing tools. Some ads are patently fishing expeditons, and others are almost free give-aways. As mentioned, some tightwads are trying to squeeze a new price out of a tool bought 30 years ago. If a seller charges sales tax, I must assume he is in business selling on CL--not just cleaning out his cellar. There is no editor or proof-reader on CL, so what we see is what we get! Oh No! Not another Seers Crafmen Radio-Alarm Saw!!

Bottom line is...what the tool is worth to me...and how badly do I want to drive to get it. All else is irelevant!

Bruce Wrenn
12-06-2010, 11:28 PM
I love it (NOT!) when seller can't even describe hat he is selling. Last week on CL was a 6" Grizzly jointer for $225, new and in excellent condition. Ad included four pictures, one of which was a stock Grizzly ad photo, another of a mid to late ninties machine (when they were dark green) with mobile base, and two of an early ninties machine (based upon the color) with rust covered beds and fence. Care to guess which was the actual machine he was selling?. After contacting seller about pictures of three different machines, the two photos of the rusty jointer are gone, but ad still says new and in excellent condition. I wonder if seller would consider my 1990 Honda Civic to be new and in excellent condition? It only has 300,000 miles on it, is 20 years old, and left side has been hit. But it does get 38 - 42 miles per gallon.

Rich Neighbarger
12-07-2010, 11:53 AM
I did not indicate a private individual or a business.

???????

No you didn't and exactly my point for the question.
If he answers the question as to whom taxes are reported, he is making the sale as a business, which explaines the tax (used tool or not). If he does not report taxes, he is a private seller trying to inflate the value of a product by adding the cost of taxes he paid.

Either way, if it looks like a deal to you, take it. Personally, I'd rather pay a little more for shipping to a private company than tax to the government...but that's just me.