Why do we pay fees on taxes that eBay collects? ...or am I reading that wrong??

[5candycanes]

Why do we pay selling fees on taxes that eBay collects?

[5candycanes]

I'm very happy eBay is handling the tax money! Maybe I asked the question wrong...... I'm questioning why I am paying fees on money that I don't have anything to do with. That money goes straight to eBay. It's not the amount of expensive or inexpensive. Just curious why I'm paying fees on money that eBay is handling. Unless you are saying that is the fee for eBay to take care of the taxes for us. Just noticed it today, just curious...... Not being cheap or anything like that. Just curious!!!  

[stainlessenginecovers]

@5candycanes 

Seems like that has already been answered for you/to you numerous times...but let's try this:

When you check out at Walmart buying $300 worth of "doesn't matter"; the Processor Charges their FEE for you to use a Debit/Credit Card at the Register on the TOTAL amount. So if all $300 is 'taxable' and you live in a 'sales tax' state- then THAT is the answer. 

The fee is based on the TOTAL. 

But in reality, you should have known this going in:

[deltilogical]

When you use your charge card in a store a fee is paid on the sales tax, but by the store.  

The fee is on the total transaction.

The solution is to move to a state that doesn't charge sales tax.  

[soh.maryl]

Since the OP is presumably asking as a seller, how would his moving to a different state be the solution, since the state sales tax charged to the buyer is based on the buyer's location, not the seller's, and since the FVF charged on that state sales tax that's paid by the buyer is charged to the seller regardless of his location?  

[5candycanes]

I know about selling fees! I was just curious why on the sales tax. Actually, I regret asking the question. I did not think it was a stupid question.....I just wanted to know why on the sales tax. I did not need all the sarcastic and "smart" replies.  People implying I am stupid, I should have known going in, etc... 

These responses have  just taught me NEVER to ask a question again! 

Thank you eBay COMMUNITY!! 

[fern*wood]

It is strange in my mind that the taxes aren't included in the 1099k (which represents our proceeds), but they still are able to charge a fee on this. 

[jerseyboymusic]

Thread number 868,543,712 in a series... 

[monroe67]

"I'm very happy eBay is handling the tax money! Maybe I asked the question wrong...... I'm questioning why I am paying fees on money that I don't have anything to do with. That money goes straight to eBay. It's not the amount of expensive or inexpensive. Just curious why I'm paying fees on money that eBay is handling. Unless you are saying that is the fee for eBay to take care of the taxes for us.  Just noticed it today, just curious...... Not being cheap or anything like that. Just curious!!!"

Yes, those words in purple are your answer.  

BTW, the few state laws that I have researched indicate that Marketplace Facilitators, such as eBay, are allowed to charge and receive "consideration" (payment) for, as you say, taking care of the sales taxes for their sellers.  

[dbfolks166mt]

It is strange in my mind that the taxes aren't included in the 1099k (which represents our proceeds), but they still are able to charge a fee on this. 

     Makes perfect sense. Sales taxes represent state, county, city.... revenues. EBay receives the tax money but rather than give it to the seller to pay those states, counties, cities....... they handle that process.

     It's actually the same with shipping but, in most cases eBay is not doing the shipping, there are some exceptions on the foreign shipments if you use one of the eBay services.  Since the seller receives the money and has to expense it to ship the package it is included in the 1099 but it is also a tax deduction. The actual revenue is the carriers USPS, UPS, FedEx......  

[soh.maryl]

Sorry you were offended by the replies.  Pretty sure we were all just trying to explain the reasoning behind that FVF.  No one implied you were stupid and we are sorry you felt like we did.  

[714ricki]

Ebay isn't doing anything abnormal when charging the seller fees on the taxes collected for each transaction. Just look at it from another perspective, all credit card companies also collect fees on the taxes collected by businesses. Most sellers are OK with ebay collecting the fees because ebay in turns remits the collected taxes to the correct state revenue collection agency on our behalf. Imagine all of the administrative costs that you're saving. 😎🙏

[isaiah53-57 · Accepted solution]

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@5candycanes wrote:

Why do we pay selling fees on taxes that eBay collects?

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Nope @5candycanes  ...you are reading it right... ebay charges approximately 13% fees on the sales taxes collected - Whereas most payment processor companies(Credit cards) collect 3% to 5% on those same taxes - You would also be paying approximately 23% on those same taxes if you were promoting your listings at 10% - Sad thing is, due to minimum state thresholds, my guess is a large majority of people selling here wouldn't need to be collecting any sales taxes on their sales at all...

Why do they charge fees on sales taxes collected?...Because they run the site and they can charge what they want... But more so, because people just allow it by continuing to list and sell as though nothing is amiss....Hope this clears things up a bit...

[coolections]

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@heckofagame wrote:

Wow. Who is paying 22-24%? 

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@heckofagame   You are if the shipping is a heavy item. Sell an item for $11.00 and ship it for $8.00. Ebay will collect on your sale price, your ship price, the tax the buyer paid, and an addition 30 cents processing fee. In this case the item you sold for $11.00 Ebay will take $2.82 (25.64%) leaving you with $8.18

[heckofagame]

Well, anything can be made to look any way we want if we apply the numbers to make our point. 

They are not charging 25.64%, but if you apply the fees taken for the total to only the item price, then it can be made to look as if it's true. 

[coolections]

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@heckofagame wrote:

Well, anything can be made to look any way we want if we apply the numbers to make our point. 

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I agree and those who think it is 13% will do just that.