My seller fell was calculated with sales tax included, why?

[bullfish777]

Hello community, I just sold an item (iPad tablet) first time in many years.  I was surprised at the total cost to sell it (12.55%+$.30 of total sale), but the cost of the listing also included the taxable amount of the product... and I'm not a store, just a standard user selling to another standard user - the item had actual tax paid when it was originally purchased several years ago.  Is this normal?  Seems like a way to get a few more dollars on the post, or is someone getting tax money for something that already had tax paid?  Appreciate insight on this. Thank you.

[doc-holmes · Accepted solution]

There will be tax charged on every transaction where you sell to someone in a place that charges sales tax. . It's a sales tax, not an item tax. You will pay fees on the total amount of the sale, including taxes and shipping? Why? It's standard, and they can do it. Is it legal? Yes. 

[fab_finds4u]

The state the buyer is in charges sales tax on online sales. eBay collects it from the buyer's payment and forwards it to the buyer's state. You don't have to anything. eBay charges the ffv on the buyer's total payment.

[bullfish777]

So, I do pay an extra fee based on the tax.  So in my case it was an extra$37 bucks I'm paying on.  I really need to get out of NY.  They are making money on used/preowned/tax already paid items.  What scoundrels!   😞

[maxine*j]

Sales tax is a kind of consumption tax.  It is a tax on the transaction.  It is not a tax on the merchandise.  That's why there is sales tax on used cars, and on the things in thrift shops and antiques stores.

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[nobody*s_perfect]

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@bullfish777 wrote:

So, I do pay an extra fee based on the tax.  So in my case it was an extra$37 bucks I'm paying on.  I really need to get out of NY.  They are making money on used/preowned/tax already paid items.  What scoundrels!   😞

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The sales tax is based on the buyer's location.  Over 40 states have implemented "marketplace facilitator" laws which require eBay to collect and remit sales tax for items that are shipped to those states. So relocating from NY will only affect what you pay for your own eBay purchases.

[bearswatching]

Please advise what a “seller fell” is! Can’t find this term anywhere!! Can someone clarify?

[fab_finds4u]

If your iPad was sold to a state that charges around 8% sales tax then that would be a sales tax of $36.90. 12.55% of the sales tax is $4.63. I would just look at it as a service fee for eBay collecting and remitting the buyer's sales tax, a chore I would not like to take on.  

[maxine*j]

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@bullfish777 wrote:

...I really need to get out of NY.  They are making money on used/preowned/tax already paid items.  What scoundrels!   😞

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It doesn't matter where you live.  As I said previously, sales tax is a consumption tax, so it is levied on the consumer at the place where the consumption occurs -- and that is at the buyer's location, not the seller's. 

If you sold it to someone who lives in a state without a sales tax, none would have been levied on the transaction.  The amount that was levied depended upon your buyer's location, since the sales tax rate varies from state to state and from place to place within each state that has a sales tax.

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[eleanor*rigby]

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@bearswatching wrote:

Please advise what a “seller fell” is! Can’t find this term anywhere!! Can someone clarify?

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It's a typo. OP meant "seller fee."

[7606dennis]

It doesn't matter if sales tax was paid on a used item when it was purchased originally.  The sale is subject to sales tax based on the where the buyer had it delivered.  With marketplace facilitator laws enacted by all the states that charge their residents eBay is required to collect it.  Of course, even before the passing of marketplace facilitator laws the buyer would have most likely have been subject to the tax only wouldhave been required to pay it to their state themselves.

By the way, it doesn't matter if you have a store or not, selling on eBay is a business enterprise.  Your turn to pay tax on the sale is at income tax time.

[theteamsetguy]

Most states have went to collecting sales on used items also like New York. There is only a handful of states left that have not enacted marketplace faciliatator laws required eBay to collect taxes every sale doesn't matter if it is new or used or the seller is a business or not.