Why does eBay Tax Shipping and Handling Fees?

[wes3-37]

I'm a very active eBay buyer and recently I looked into the 'sales tax' that eBay charges.  It turns out that eBay not only taxes the item sales price, but also adds in the shipping and handling charges prior to calculating sales tax.  I believe this need to be addressed as there is nothing taxable about S&H fees. 

[campanaelia]

I read the exceptions you pasted and it says as long as the s/h  service is stated separately from the item price it is not subject to being taxed in MO. Having local p/u as an option does not make a difference. Sounds pretty cut and dry to me.

Ebay makes many mistakes in their programming of taxes and fees, they did it here in CA on the electronic ewaste fee and even after many complaints from buyers they did not fix it until the state got involved.

See my thread below on that fiasco...

https://community.ebay.com/t5/Buying/Ebay-is-wrongfully-adding-the-CA-ewaste-fee-for-electronics/td-...

And another thread here:

https://community.ebay.com/t5/Buying/WHY-IS-EBAY-CHARGING-5-00-FOR-A-CALIFORNIA-TAX-ON-ELECTRONICS/m...

[woodland_gnome]

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@campanaelia wrote:

I read the exceptions you pasted and it says as long as the s/h  service is stated separately from the item price it is not subject to being taxed in MO. Having local p/u as an option does not make a difference. Sounds pretty cut and dry to me.

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It is "cut and dry" but exactly the opposite of what you took from it.  You left out the part that makes the difference:

If the purchaser is not required to pay the service charge
as part of the sale price of tangible personal property, the
amount paid for the service is not subject to tax if the charge
for such service is separately stated.

If there is no local pickup option the buyer is "required to pay the service charge" and it is taxable.

[myangelandmyprincess]

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@woodland_gnome wrote:

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@campanaelia wrote:

I read the exceptions you pasted and it says as long as the s/h  service is stated separately from the item price it is not subject to being taxed in MO. Having local p/u as an option does not make a difference. Sounds pretty cut and dry to me.

---

It is "cut and dry" but exactly the opposite of what you took from it.  You left out the part that makes the difference:

If the purchaser is not required to pay the service charge
as part of the sale price of tangible personal property, the
amount paid for the service is not subject to tax if the charge
for such service is separately stated.

If there is no local pickup option the buyer is "required to pay the service charge" and it is taxable.

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This ^^^ several states actually do it this way.  

And it often confuses people. But if means that shipping is often still taxable in Missouri. 

[campanaelia]

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@myangelandmyprincess wrote:

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@woodland_gnome wrote:
If there is no local pickup option the buyer is "required to pay the service charge" and it is taxable.

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This ^^^ several states actually do it this way.  

And it often confuses people. But if means that shipping is often still taxable in Missouri. 

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Well I'm glad I live in CA, we don't pay tax on s/h and when they  write a bill here average Joe can understand it easily.

[frankenhobbit]

Sorry man, but I can't say I've ever seen something that essentially says 'Glad I live in CA because of their taxes' 🙂

[campanaelia]

Most of what you hear are just political talking points.

https://itep.org/is-california-really-a-high-tax-state/

https://www.desertsun.com/story/news/politics/elections/2024/04/30/are-california-taxes-higher-than-...

[frankenhobbit]

That's actually interesting, though our family would definitely be paying more in taxes (and I am in Texas) even by their numbers. 

What I can't fathom though is that it says Texas charges their 'poor' more than CA charges it's 'rich'.

Texas has no income tax and a base sales tax of 6.25 percent.  California's base Sales tax is 7.25 percent. A city like Houston is a total of 8.25 if you live inside the city limits, but San Fran is 8.63 percent.  So how can Texas be charging it's poor more than California's rich? If it's not sales tax or income tax? And it's not gas tax (something that affects the poor to a greater degree with regards to percentage of their income), I paid $2.89 a gallon when I filled up this week. 

Both those links cite the same study. which on the surface of it, appears to be flawed given that Texas doesn't even have an income tax, a comparable sales tax to CA and lower gas taxes. Only thing I can think of is perhaps CA has more items that are not taxable? Shipping isn't going to be the tie breaker.