Do I need to pay taxes on a silent auction item I won?

Question

I won an item at a charity fundraiser (silent auction). I went up to pick up the item and the 'donator' wanted to charge me sales tax on the retail price of the item. The taxes are almost the same as the price I won the auction. Is this normal?

Answer 1

NO it is not and you should not have to pay.

The charity that auctioned the item did not pay taxes for it, it was most likely donated to them for free, or if they bought it, they did not have to pay tax.

if the DONATOR is asking for the tax, NOT THE CHARITY, they are just trying to get money out of you, and you should report them to the charity. The donator gets a tax deduction for the item they donated, they don't need to collect tax on it.

Answer 2

Sounds like a rip off to me. In most states that have sales tax you are required to pay only the amount of taxes you paid for the item not the amount it would have sold for in a store. If you buy an item in a store that has reduced the price of the item, you pay taxes for the price you paid for that item.
Hope you didn't pay for it.

Answer 3

Some states have strange quirks in their sales tax laws, so maybe this is legit. However, in general the sale tax is based on the price actually being paid for the item, not the regular retail price. I'd suggest you call the state's revenue officials to inquire on this.

Answer 4

if it's for charity then yes. charities often have very strict tax laws that keep them as a non-profit. if they're charging you sales tax it's because they have to, not because they want to. you can probably still write off the entire cost as a charitable donation, though.

Answer 5

no....that then takes it out of the realm of charity i.e. not for profit and unless it was revealed prior to the auction that sales tax was due...the seller is in the wrong.....tell them you want to see the forms whereby they are actually sending that tax to the state