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Final value fees on shipping and taxes

Does anyone else find it odd that ebay is charging a final value fee on shipping and sales taxes.  I understand that some people May charge excessive shipping in order to make up for a low selling price. But no one has any control over sales taxes. That's money that never under any circumstances goes to the cellar, and as a matter of fact the cellar has no hand in determining what the sales taxes are.  

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Re: Final value fees on shipping and taxes


@doc-holmes wrote:

@oregonactionfiguresllc wrote:

Ebay will do whatever they can, in any scenario, to take a bigger slice of the pie away from the Seller.

It's absolutely repulsive.


Repulsive...capitalism. Whatever. 


Well then the sellers would fall into that definition too as we are all here to make a profit.  Not sure why some see Ebay making a profit is bad and seller it is great.


mam98031  •  Volunteer Community Member  •  Buyer/Seller since 1999
Message 31 of 58
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Re: Final value fees on shipping and taxes

I find it a Ripoff!

Message 32 of 58
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Re: Final value fees on shipping and taxes

I will agree on one thing - charging a percentage on sales tax is not proper on any level  and has legal ramifications - just no one has done anything about it. It should be on Total sales minus sales tax -

I just deal with it anyways and will work it out on my taxes at end of year 

 

Now - I do not fault eBay as to the fact people were making money on shipping and handling to skate paying fees at one point - hell - I loose on shipping all the time - I know I can print labels and so on  - I go direct to Postal Office and FedEx and so on I have done that with my restoration business for over a period of 38 years - it is just extra stuff I sell off anyways - and I buy a lot on eBay for my Restoration business - which is Clocks- Watches and Antiques 

 

Enough with that part - Moving on - As far as I'm concern being a Florida Space Coast Business

When I sell or repair - sales tax should go direct to Florida

Why? In theory buying from my business in Florida - My Tax ID is Florida - I list pack -sell - ship and repair in Florida 

If you come to Florida and buy from me locally you pay Florida State Tax / NOT your home state tax code ? So in reality who ever started this tax game did it wrong, makes sense if you really think about it. My eBay business is based in Florida

My Restoration business is web based in Florida - and any restoration work is Florida Based and taxes should and do go to Florida 

So why is sales tax being paid to other states ? Think about it. 

 

And lower sales price - that is the choice the seller made not eBay - - You have to learn to hold out for the right buyer - I have had stuff I pull and just take it to a Local train show and get three time or at least more taking to a local show - we get a lot of traffic for tourist here in Florida  

 

Not everyone is on eBay - there are a lot of sites - I know people who use FB market place - I will never use FB market place - can't stand FB anyways - OK now you get the point - there are millions of buyers who won't use one system or another - Like stocks you have to be diversified with your business operations, again making a point I restore many different items so being diversified pays my bills. 

 

I tired to make point on your whole statement the OP

 

Sale Tax Amount

Now as far as control over how much your buyer pays in sales tax is set by state and county - each state and county taxes vary and reflect the demographics - same with gas prices - if your near a high supply and demand area - such business raise the price / like gas being on a highway off ramp  - they also pay higher prices for property taxes - the whole system is rigged and those people you put in office have bean counters and frankly know what the market will bare - during certain times of the year gas prices go high - - why ? travel / more gas sold / the higher the price - more money the higher the price the more tax revenue is made. 

 

So my friends Business 101 - in short the tax system does need an overhaul - And people are in General , most people are going to cheat the system - that is a given documented facts - they call it shrinkage and so on in the business world , how many people take things home from work - oh, it happens paper - pens and so on - little things add up to millions for business { Yah < I took business in college >} and my grammar still sucks - so suck it up , nothing is going to change until we all become the change we want to see - and that will never happen. Greed is a wonderful thing - Cheers 😁✌️

Message 33 of 58
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Re: Final value fees on shipping and taxes

@boxcarcharlie 

 

"...charging a percentage on sales tax is not proper on any level  and has legal ramifications"  What law?  Many have said this over the last 3 years, yet no one has been able to tell us which law is being broken.  Money Processing fees have been charged on sales tax for decades.  All credit cards do it as well as all money processor like PayPal and Ebay.

 

Loosing money on shipping is a choice.  One that most sellers don't make as it is totally unnecessary.

 

Sales tax has NEVER been about the state in which the Seller or business is in but about the state the item is being delivered to.  If that is in your state, then your buyer would owe sales tax to your state.  But if it was delivered to Texas, the sales taxes are due to the state of Texas.

 

It appears you don't understand how sales tax actually works and is calculated.  It is very easy.  Sales tax is due to the State in which the item is delivered to.  It is NOT any more complicated than that.

 

The desire to make a profit is not now nor has it every been "greed".  Every seller is here to make a profit as is Ebay here to make a profit.  It is how we all survive and how capitalism works.  


mam98031  •  Volunteer Community Member  •  Buyer/Seller since 1999
Message 34 of 58
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Re: Final value fees on shipping and taxes

Ok, I do understand sales tax and that delivered part - just think about what I have said 

 

That can and will change at some point and yes I do understand what your saying ,right or wrong or the way things are  - different points of views-  reread what I wrote about being based here in Florida - it does make sense - any Law can be challenged or changed  it is time consuming to do so - be it Lawsuits or Lobby at state and local levels { Washington is controlled by the rich , which is another bird on its own and those who are put in office who write the laws and tax codes and so on, laws written to protect their pocketbook  } - most people just deal with things the way they are right or wrong and simply choose not to get involved to make change 

 

Ramifications

plural nouna consequence of an action or event, especially when complex or  unwelcome 
  1. "any change is bound to have legal ramifications
     
    By this - is people making change in a court of Law and through hard fought Political action 
    In the not so distance future there will be changes made, 
     
    I enjoyed the few min's of chat this morning
     I have to get back to work and I will respond another day
     
    Cheers   😎👍 Have a great day all 

 

Message 35 of 58
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Re: Final value fees on shipping and taxes

I understood what you said.  It is unlikely that States will be willing to make changes you suggest.  They would be losing money, there has to be an upside for a change.  


mam98031  •  Volunteer Community Member  •  Buyer/Seller since 1999
Message 36 of 58
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Re: Final value fees on shipping and taxes

I will agree on one thing - charging a percentage on sales tax is not proper on any level  and has legal ramifications - just no one has done anything about it. It should be on Total sales minus sales tax -

I just deal with it anyways and will work it out on my taxes at end of year 

 

     Every CC company in the world charges merchant fees on the total amount of any purchase including the sales tax, tips at restaurants............... Been going on for years and is pretty much standard practice 

Message 37 of 58
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Re: Final value fees on shipping and taxes

Enough with that part - Moving on - As far as I'm concern being a Florida Space Coast Business

When I sell or repair - sales tax should go direct to Florida

Why? In theory buying from my business in Florida - My Tax ID is Florida - I list pack -sell - ship and repair in Florida 

If you come to Florida and buy from me locally you pay Florida State Tax / NOT your home state tax code ? So in reality who ever started this tax game did it wrong, makes sense if you really think about it. My eBay business is based in Florida

My Restoration business is web based in Florida - and any restoration work is Florida Based and taxes should and do go to Florida 

So why is sales tax being paid to other states ? Think about it. 

 

     Ecommerce has for sure make the concept of sales tax foggy to say the least. Ironically if buyers purchase from you in Florida you collect the sales tax and remit it to Florida without ever knowing whether the buyer was from Florida or not. Prior to the Courts decision in Wayfair vs South Dakota little to no sales tax was being collected on interstate ecommerce sales. 

     The Supreme Court that looked at the intent of the specific sales tax law in Wayfair vs South Dakota and in essence established that the seller regardless of location basically had a virtual store in the buyers state of residence and the sale was therefor subject to sales tax by that state. Even after the court's decision it took several years for the individual states to modify their state and local tax laws to allow sales taxes to be collected on interstate ecommerce sales. 

     The one thing that has not changed is the income tax laws. At the current time any income you earn from ecommerce sales is taxed in the sellers state of residence and is not based on where the buyer is located. I can't even imagine the implications if the ecommerce sales tax laws were applied to state income tax laws. 

Message 38 of 58
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Re: Final value fees on shipping and taxes

"charging a percentage on sales tax ... has legal ramifications?"

 

Care to expand on this theory?

Message 39 of 58
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Re: Final value fees on shipping and taxes


@dbfolks166mt wrote:

 

     Ecommerce has for sure make the concept of sales tax foggy to say the least. Ironically if buyers purchase from you in Florida you collect the sales tax and remit it to Florida without ever knowing whether the buyer was from Florida or not. Prior to the Courts decision in Wayfair vs South Dakota little to no sales tax was being collected on interstate ecommerce sales. 


Remember, though, that most states did have a mechanism for collecting taxes on interstate ecommerce sales prior to "internet tax," however.  Most states did have some form of Use Tax on the books.  Unfortunately for those states, those mechanisms didn't have a lot of teeth and some if not many buyers were unaware or didn't care that they were supposed to pay Use Tax on most of their out-of-state purchases made online.

Use Taxes and "internet tax" are in place to discourage the practice of making a purchase out of state to avoid paying taxes at the local level.  Yes, this means that online sales are subject to different applications of sales tax than brick and mortar sales, but who says they have to work the same way?

Message 40 of 58
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Re: Final value fees on shipping and taxes


@mam98031 wrote:

@doc-holmes wrote:

@oregonactionfiguresllc wrote:

Ebay will do whatever they can, in any scenario, to take a bigger slice of the pie away from the Seller.

It's absolutely repulsive.


Repulsive...capitalism. Whatever. 


Well then the sellers would fall into that definition too as we are all here to make a profit.  Not sure why some see Ebay making a profit is bad and seller it is great.


My little comment wasn't very clear. I actually agree with you. Some people can't wrap their heads around the fact that they support capitalism when it benefits them, but get angry when it doesn't. I don't understand why some people think it's ok for them to make as much profit as possible, but not someone else. Consistency, please. 

Message 41 of 58
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Re: Final value fees on shipping and taxes

That can and will change at some point

 

any Law can be challenged or changed

 

If at some point in the future a law were to be passed preventing eBay from collecting a fee based upon a total payment amount that includes a sales tax portion, you can be certain that eBay would fully comply with the new law and from then on would only charge a fee percentage on the non-sales tax portion of payment just as the law required.

 

And at that time, you can also be certain that eBay would immediately raise the fee percentage so that the total fee amount that eBay would collect did not go down one cent.

 

So the direct result of that law would be that the fee calculation would change: the amount that fee percentage could be applied to would go down, the fee percentage itself would go up, and the total fees collected by eBay would remain the same as the status quo ante.

 

Why some think that would be preferable to the current situation remains a mystery.

 

Message 42 of 58
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Re: Final value fees on shipping and taxes

"I will agree on one thing - charging a percentage on sales tax is not proper on any level  and has legal ramifications - just no one has done anything about it. It should be on Total sales minus sales tax -

I just deal with it anyways and will work it out on my taxes at end of year"

 

I will assume this phrase -- ". . . charging a percentage on sales tax . . ." -- refers to eBay's imposition of Final Value Fees (FVFs) on the total paid by eBay buyers, which will most often include some sales tax. 

I truly believe that the Marketplace Facilitator/Facilitation laws do allow marketplace facilitators, such as eBay, to charge (or retain or impose) a percentage on the amount of sales tax they process.  I thought I found a provision in California law about this a few months ago, but I didn't save it and now can't find it quickly.  And it was phrased with a great deal of legalese and complicated sentence structure, which I couldn't fully grasp at the time I found it.  Maybe there's something in the Wayfair decision -- that's easy enough to find via Google.  

But here's an important thing about those Marketplace Facilitator laws:  they are laws.  They have been addressed upside down and inside out by attorneys and judges throughout the nation.  Sure, they can be still be questioned, and maybe you, boxcarcharlie, can find an attorney to look into this for you.  Be prepared to pay that attorney, and also be aware that the attorney might come back to you and tell you that what you think is improper  may not be illegal.  You are allowed to continue to believe eBay is acting improperly by keeping a fee for the work they do/did in processing sales taxes.  

But, as you say, you "just deal with it anyways and will work it out on my taxes at end of year".  Yes, eBay's fees on the sales taxes they process are (possibly) deductible by eBay sellers as business expenses on their own tax returns.   (I say "possibly" because there might possibly somehow somewhere be a situation in which an eBay seller cannot deduct eBay fees.)  So that's a positive for you.  If the negative is that, "OMG, eBay kept Four Cents from my most recent payout because they processed the buyer's sales tax!!" -- do a little math.  Consider it a type of preemptive accounting so that you can keep those four cents. 

Assume the worst, that a buyer will be paying 10% to 12% on the cost of your item and on the cost of postage/shipping. 
Do that calculation, and then figure the FVF on that estimated sales tax. 
Example:  Assume you sell a Thing on eBay for $150.00 and the buyer chooses/agrees to pay $20.00 to ship it to her home in a state which imposes sales tax on postage.  $150.00 +$20.00 = $170.00.

The sales tax rate in her zip code is 11%.  $170.00 x 0.11 = $18.70.  eBay will process $18.70 in sales tax on that purchase.

Assume eBay's FVF percentage on that transaction is the standard 13.25%.  $18.70 x .1325 = $2.47775.
Rounded up, that means eBay will keep $2.48 as their payment for processing the sales tax.  That also means you will (possibly) get to deduct $2.48 from your taxable income on your income tax returns.  
But YOU want those two dollars and 48 cents!  "It's improper !! for eBay to keep that $2.48," you might say.  

To mitigate your "loss", then, what you should do is add $2.48 to the item's price in your eBay listing.  Or maybe more, to cover eBay fees on the $2.48.  Heck, add $3.00 to the item's price.  

BTW -- I disagree with your statement that "most people are going to cheat the system."  Some people will try.  The best people will do everything they can to work within the system, any system, all systems.  

Message 43 of 58
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Re: Final value fees on shipping and taxes

@vidsolutionsllc ,

 

How would you feel if instead of charging the FVF on the sales tax they raise their FVF on the item sales price plus shipping to 14% from 13.25%? Which would come out about the same in the end. 

Message 44 of 58
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Re: Final value fees on shipping and taxes

Average sales tax is about 8 or 8.5%.  Very few if jurisdictions would have a 12% rate.

 

 

  State Base Rate Local Range

Alabama0%–7%0%-7% 4%-11%
Alaska0%0%–7.5%0%–7.5%
Arizona5.60%0%–5.6%5.6%–11.2%
Arkansas6.50%0%–5%6.5%–11.5%
California6.00%0.15%–3%7.25%–10.25%
Colorado2.90%0%–8.3%2.9%–11.2%
Connecticut6.35%N/A6.35%
Delaware0%N/A0%–0%
Florida6%0%–2%6%–8%
Georgia4%0%–5%4%–9%
Hawaii4%0%–0.5%4%–4.5%
Idaho6%0%–3%6%–9%
Illinois6.25%0%–4.75%6.25%–11%
Indiana7%N/A7%
Iowa6%0%–2%6%–8%
Kansas6.50%0%–4.1%6.5%–10.6%
Kentucky6%N/A6%
Louisiana4.45%0%–7%4.45%–11.45%
Maine5.50%N/A5.50%
Maryland6%0%6%
Massachusetts5.60%N/A6.25%
Michigan6%6%N/A
Minnesota6.88%0%–1.5%6.875%–8.375%
Mississippi7%0%–1%7%–8%
Missouri4.23%0%–5.875%4.225%–10.1%
Montana0%N/AN/A
Nebraska5.50%0%–2%5.5%–7.5%
Nevada4.60%0%–3.665%4.6%–8.265%
New Hampshire0%N/AN/A
New Jersey6.63%N/AN/A
New Mexico5.13%0%–3.9375%5.125%–9.0625%
New York4%0%–4.875%4%–8.875%
North Carolina4.75%0%–2.75%4.75%–7.5%
North Dakota5%0%–3.5%5%–8.5%
Ohio5.75%0%–2.25%5.75%–8%
Oklahoma4.50%0%–7%4.5%–11.5%
Oregon0%N/A0%
Pennsylvania6%0%–2.0%6.0%–8.0%
Rhode Island7%N/A7%
South Carolina6%0%–3%6%–9%
South Dakota4.50%0%–2%4.5%–6.5%
Tennessee7%0%–3%7%–10%
Texas6.25%0.125%–2%6.375%–8.25%
Utah4.70%0%–4%4.7%–8.7%
Vermont6%0%–1%6%–7%
Virginia4.30%0%–2.7%4.3%–7%
Washington6.50%0%–3.9%6.5%–10.4%
West Virginia6%0%–1%6%–7%
Wisconsin5%0%–0.6%5%–5.6%
Wyoming4%0%–2%4%–6%

 


mam98031  •  Volunteer Community Member  •  Buyer/Seller since 1999
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