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Thread: Is This Logical Thinking Regarding Tool Sales?

  1. #1
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    Is This Logical Thinking Regarding Tool Sales?

    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?

  2. #2
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    I don't believe I've ever seen a listing that was itemized, not to mention seeing tax...
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  3. #3
    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.

  4. #4
    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!

  5. #5
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    Quote Originally Posted by Rich Neighbarger View Post
    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.

    ???????

  6. #6
    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

  7. #7
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    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.
    Trying to follow the example of the master...

  8. #8
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    Quote Originally Posted by David Hostetler View Post
    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?

  9. #9
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    Quote Originally Posted by Dan Hintz View Post
    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?

  10. #10
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    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

  11. 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

  12. #12
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    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.

  13. #13
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    Quote Originally Posted by Mike Shields View Post
    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.
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  14. #14
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    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.

  15. #15
    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.

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