Ebay to get a share of the Sales Tax Collected from San Jose

[twnpopcards]

One more bit of information that will probably effect our online Sales as Ebay now is monetizing the collection of Sales Tax it collects into more revenue for their pockets from the Sales TAx that is collected.  I will lay odds that CA is not the only state where these type of agreements are going to start popping up.

Just read an article that Ebay is now going to get to keep some of the Sales Tax it collects from CA residents.  Californians not only have State Sales, but also County and some have District Sales Tax as Well.  The City of San Jose and Ebay have come to an agreement whereby Ebay will consider all of the CA (at least) as having originated in San Jose so that city will get all of the district revenue collected by Ebay and in return has agreed to give 30% back to Ebay on any amounts collected over $5 million in a year.  So not only does not the money not get allocated correctly to the tax districts that both the buyer and sellers live in, but Ebay is now going to get keep part of the money that they collect!!!!

So not only is Ebay NOT the Seller of Record and starting November 1 is pushing the Sales Tax processing fees off on the individual Sellers they are now not even going to remit the money to the proper tax authorities while basically claiming they are now the Seller of Record.  The Governor already has a bill on his desk that will make such deals illegal  and now has a good indication of why such a law is needed.  Ebay is going to get 30% of the 1% Sales tax over $5 million per year that San jose is going to now try and claim as theirs even though Ebay has no inventory to sell or that is located in San Jose.  I see a nice court battle opening up over this one in the very near future as well as more and more buyers deciding to buy locally so at least their Sales Tax money goes where it is supposed to and not in Ebays pockets.

Here is the link to the article i read.

https://www.mercurynews.com/2019/10/01/editorial-california-sales-tax-kickback-schemes-should-be-ban...

[mam98031]

Ebay is a for profit company.  I have no clue as to why so many members thing Ebay should just be doing things for free with no way to make money off the process.  Why is it wrong for Ebay to be paid for their services?  I don't get it.  

Sellers want to be paid for their services.  Sellers want to make a profit.  Sellers complain with Ebay financials are announced and they aren't as profitable as they would like.  Yet those same people complain about stuff like this.

Ebay has every right to be paid for their services.  The states should be paying Ebay for processing these taxes.  It give the states an effective and efficient way to collect taxes they would otherwise be very challenged to collect, if they could collect them at all.

If for any reason you feel your state has gone too far and is compensating Ebay and other marketplaces too much.  You need to go to your state representatives and make sure they know your opinions and concerns.  You have to change it at the state level.

[jobs-7]

Ebay has a "right" to be paid for collecting sales tax?  Does every other company that collects sales tax have that same right?  Ebay also collects and remits federal income tax, state income tax, medicare, and social security withheld from their employees' payroll.  Do you think they should get a chunk of that too?  Collecting and remitting certain taxes is a "cost of doing business" for MOST businesses, not something they get a windfall from.  The fact some are OK with a company sharing in the taxes they collect is shocking, but not surprising.

[twnpopcards]

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@mam98031 wrote:

Ebay is a for profit company.  I have no clue as to why so many members thing Ebay should just be doing things for free with no way to make money off the process.  Why is it wrong for Ebay to be paid for their services?  I don't get it.  

Sellers want to be paid for their services.  Sellers want to make a profit.  Sellers complain with Ebay financials are announced and they aren't as profitable as they would like.  Yet those same people complain about stuff like this.

Ebay has every right to be paid for their services.  The states should be paying Ebay for processing these taxes.  It give the states an effective and efficient way to collect taxes they would otherwise be very challenged to collect, if they could collect them at all.

If for any reason you feel your state has gone too far and is compensating Ebay and other marketplaces too much.  You need to go to your state representatives and make sure they know your opinions and concerns.  You have to change it at the state level.

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I completely understand that Ebay is a for profit company and have no problems paying them for the services that they are supposed to provide.  I also have no problem paying Ebay their commission when I make a sale, but I do have a problem when they are being paid with TAX DOLLARS from a city that does not even have the right to do what they have worked out with Ebay.  If Ebay was the Seller of Record, then San Jose might have the right to negotiate this deal, but they are not.  As to contacting my state Representatives, i already have and encourage others whose Taxes Ebay is managing to keep to also do so.  That is exactly why I made this post, to inform others in the community of what is happening and then they can make their own minds up as to what they care to do.  Its bad enough when cities and states give these companies large tax breaks to bring jobs to their area, but at least the citizens of that state or city are getting some benefit from it.  But for San jose to agree to give Ebay monies they are not entitled to, and for Ebay to agree to misappropriate the Sales Taxes they are collecting, is just wrong, period.  If you feel that this is no problem, then contact your local government and tell them you would like to have Ebay take funds from their already short funded programs and arrange for Ebay to have those funds.  These State Sales Taxes were not imposed on buyers so that Ebay could take a portion of them for their bottom line, unless they are also going to make the same arrangements with all other sellers in their state that are collecting Sales Tax on their behalf.

Personally i am not in favor of the newly imposed Sales Taxes being imposed on all buyers regardless of where the Seller is located, but that is what the politicians that were voted into office by the majority of the population wanted, so it is what it is.  But this wrongful appropriation of funds from other districts in the State of CA and who knows how many other agreements are in place, needs to be fixed as i should not be paying Taxes on items so that Ebay can keep 30% of what should be going to my city for the needs it has. 

[the*dog*ate*my*tablecloth]

Yes eBay has a right to keep some of the sales tax. In many States companies get a discount on their sales tax payment when they pay early or online. Why should EBay be denied something millions of other companies get?

https://blog.taxjar.com/state-sales-tax-discounts/

[scratch*post]

I am NOT a fan of the current ebay,  but I don't understand why people blame them for collecting sales tax and being compensated for it. All online seller marketplaces are obligated by law to  collect sales tax in the appropriate states and municipalities. It's NOT an ebay thing, it's a government thing.

My state does not currently have a marketplace facilitator law in place but it does have use tax which I am obligated to pay for my untaxed online purchases.  My state is due the taxes for all online purchases and it does compensate those who collect sales tax by letting them keep a percentage of those taxes.  Again, this is for ALL businesses, not just ebay.

[thehonorabletrader]

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@twnpopcards wrote:

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@mam98031 wrote:

Ebay is a for profit company.  I have no clue as to why so many members thing Ebay should just be doing things for free with no way to make money off the process.  Why is it wrong for Ebay to be paid for their services?  I don't get it.  

Sellers want to be paid for their services.  Sellers want to make a profit.  Sellers complain with Ebay financials are announced and they aren't as profitable as they would like.  Yet those same people complain about stuff like this.

Ebay has every right to be paid for their services.  The states should be paying Ebay for processing these taxes.  It give the states an effective and efficient way to collect taxes they would otherwise be very challenged to collect, if they could collect them at all.

If for any reason you feel your state has gone too far and is compensating Ebay and other marketplaces too much.  You need to go to your state representatives and make sure they know your opinions and concerns.  You have to change it at the state level.

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I completely understand that Ebay is a for profit company and have no problems paying them for the services that they are supposed to provide.  I also have no problem paying Ebay their commission when I make a sale, but I do have a problem when they are being paid with TAX DOLLARS from a city that does not even have the right to do what they have worked out with Ebay.  If Ebay was the Seller of Record, then San Jose might have the right to negotiate this deal, but they are not.  As to contacting my state Representatives, i already have and encourage others whose Taxes Ebay is managing to keep to also do so.  That is exactly why I made this post, to inform others in the community of what is happening and then they can make their own minds up as to what they care to do.  Its bad enough when cities and states give these companies large tax breaks to bring jobs to their area, but at least the citizens of that state or city are getting some benefit from it.  But for San jose to agree to give Ebay monies they are not entitled to, and for Ebay to agree to misappropriate the Sales Taxes they are collecting, is just wrong, period.  If you feel that this is no problem, then contact your local government and tell them you would like to have Ebay take funds from their already short funded programs and arrange for Ebay to have those funds.  These State Sales Taxes were not imposed on buyers so that Ebay could take a portion of them for their bottom line, unless they are also going to make the same arrangements with all other sellers in their state that are collecting Sales Tax on their behalf.

Personally i am not in favor of the newly imposed Sales Taxes being imposed on all buyers regardless of where the Seller is located, but that is what the politicians that were voted into office by the majority of the population wanted, so it is what it is.  But this wrongful appropriation of funds from other districts in the State of CA and who knows how many other agreements are in place, needs to be fixed as i should not be paying Taxes on items so that Ebay can keep 30% of what should be going to my city for the needs it has. 

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Perspective

As stated, many states allow businesses and sellers to keep a small portion of sales tax collected as a way to pay for the cost of the collection. So eBay isn't the only company benefiting from this. In fact, if you are a business and you are collecting sales tax and you are not taking advantage of programs like this I would argue you are not the smartest business owner.

There are over 30 states that have sales tax collection laws for online sales. Each state has a completely different and 100% unique law that has nothing to do with the other 29+ state laws. So eBay has to for each state, pay attorneys to review the laws, then pay employees and designers to design a sales tax collection system for that specific state, then pay programmers to actually write the software that does it all, then pay staff members to reconcile for each state and ensure each state is getting the funds they are supposed to for the sellers. I wouldn't be surprised if this was 6-figures each month for each state. So yes, I certainly hope they can recoup some of these costs from the states that are making them do all this in the first place.

[thehonorabletrader]

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@twnpopcards wrote:

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@mam98031 wrote:

Ebay is a for profit company.  I have no clue as to why so many members thing Ebay should just be doing things for free with no way to make money off the process.  Why is it wrong for Ebay to be paid for their services?  I don't get it.  

Sellers want to be paid for their services.  Sellers want to make a profit.  Sellers complain with Ebay financials are announced and they aren't as profitable as they would like.  Yet those same people complain about stuff like this.

Ebay has every right to be paid for their services.  The states should be paying Ebay for processing these taxes.  It give the states an effective and efficient way to collect taxes they would otherwise be very challenged to collect, if they could collect them at all.

If for any reason you feel your state has gone too far and is compensating Ebay and other marketplaces too much.  You need to go to your state representatives and make sure they know your opinions and concerns.  You have to change it at the state level.

---

I completely understand that Ebay is a for profit company and have no problems paying them for the services that they are supposed to provide.  I also have no problem paying Ebay their commission when I make a sale, but I do have a problem when they are being paid with TAX DOLLARS from a city that does not even have the right to do what they have worked out with Ebay.  If Ebay was the Seller of Record, then San Jose might have the right to negotiate this deal, but they are not.  As to contacting my state Representatives, i already have and encourage others whose Taxes Ebay is managing to keep to also do so.  That is exactly why I made this post, to inform others in the community of what is happening and then they can make their own minds up as to what they care to do.  Its bad enough when cities and states give these companies large tax breaks to bring jobs to their area, but at least the citizens of that state or city are getting some benefit from it.  But for San jose to agree to give Ebay monies they are not entitled to, and for Ebay to agree to misappropriate the Sales Taxes they are collecting, is just wrong, period.  If you feel that this is no problem, then contact your local government and tell them you would like to have Ebay take funds from their already short funded programs and arrange for Ebay to have those funds.  These State Sales Taxes were not imposed on buyers so that Ebay could take a portion of them for their bottom line, unless they are also going to make the same arrangements with all other sellers in their state that are collecting Sales Tax on their behalf.

Personally i am not in favor of the newly imposed Sales Taxes being imposed on all buyers regardless of where the Seller is located, but that is what the politicians that were voted into office by the majority of the population wanted, so it is what it is.  But this wrongful appropriation of funds from other districts in the State of CA and who knows how many other agreements are in place, needs to be fixed as i should not be paying Taxes on items so that Ebay can keep 30% of what should be going to my city for the needs it has. 

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Also I would not say anything is misappropriated. For each state, eBay collects the sales tax, eBay then sends the sales tax to that state. That state then gives funds to the company collecting the tax....more accurately it says "keep a certain percentage". The physical exchange of the funds to the state and the funds back from the state does not change the fact that the STATE is using tax payer dollars to compensate companies for this. Basically it can't be misappropriated because the state law is what dictates how the funds are used.

Again, you can be upset and I recommend you voice your opinion, but don't spin it as something eBay or anybody else is profiting off of. Nobody wants this tax including eBay. eBay has lobbied against it for years and has asked all their members to sign petitions against it and they have actively tried to stop it and still are actively trying to stop it.

I get frustrated by people thinking eBay is a co-conspirator in a scheme to take money away from buyers and sellers when in reality the States are trying to make it more fair for their local business.

[myangelandmyprincess]

I'd say my only issue is that some of the cost of collecting taxes will be put on the sellers starting November 1st but they won't get any compensation for that.  

[whatmorefabric]

Every state that collects sales tax compensates large vendors  in some way .       Large retailers organize and pay the sales tax in an orderly fashion and get some compensation for it.      In other words,  states pay Walmart,  Amazon etc a fee for doing the bookkeeping for them.

Good grief.

[southern*sweet*tea]

In my state, as long as the tax is paid on time, the discount is 2%, not to exceed $50. I'm assuming the $50 is per sale and not total. I'm really not sure .  We are NOT a market facilitator state, so y'all don't have to worry about Ebay keeping any money away from MS.

[myangelandmyprincess]

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@southern*sweet*tea wrote:

In my state, as long as the tax is paid on time, the discount is 2%, not to exceed $50. I'm assuming the $50 is per sale and not total. I'm really not sure .  We are NOT a market facilitator state, so y'all don't have to worry about Ebay keeping any money away from MS.

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I'm in MS they love taxes I predict eventually they'll jump on board 

[twnpopcards]

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@whatmorefabric wrote:

Every state that collects sales tax compensates large vendors  in some way .       Large retailers organize and pay the sales tax in an orderly fashion and get some compensation for it.      In other words,  states pay Walmart,  Amazon etc a fee for doing the bookkeeping for them.

Good grief.

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If CA were to give this discount I would not be happy but at least it is coming from the State. In this case the City of San jose has joined with Ebay to state that ALL the Sales are occurring in San Jose so that the district Taxes that are due to all the various cities through out CA are being misappropriated and sent to San Jose who is then going to compensate Ebay.  CA is not one of those states where retailers get a discount or any money for collecting and remitting the Sales Tax timely and in fact are penalized if they do not pay timely.  So this is not the norm for a business in CA and again Ebay is making false statements that all the Sales are happening in San Jose when in fact they do not even own any inventory.  If Ebay wants to pay the processing fees that they are going to now force Sellers to pay (which we actually should be paying) then maybe they would have an argument that the Sales belong to them, but since they are not, they have no right to make this agreement and if you feel they should, then contact your city or State and tell them to allow Ebay to take the money from your tax dollars and see what services suddenly disappear from your region.  I am surprised by the number of people that feel Ebay is entitled to this money when other Sellers or businesses are not, but I guess you are hoping that this will satisfy Ebays thirst for additional revenue and you will not see additional price increases that you have to pay.  But for those who are now having their buyers pay sales tax to Ebay, watch in November when your processing fees to Paypal increase by about 3% on the tax collected as you are going to start having to pay that expense for Ebay also.

[southern*sweet*tea]

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@myangelandmyprincess wrote:

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@southern*sweet*tea wrote:

In my state, as long as the tax is paid on time, the discount is 2%, not to exceed $50. I'm assuming the $50 is per sale and not total. I'm really not sure .  We are NOT a market facilitator state, so y'all don't have to worry about Ebay keeping any money away from MS.

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I'm in MS they love taxes I predict eventually they'll jump on board 

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No, it's already in place here.  Tax is collected by an individual seller if the seller has sold $250,000 or more the previous calendar year, otherwise the onus is still on the buyer to pay the taxes they owe to their state. This is to lessen the burden for truly small sellers. We try to be small business friendly.

We have 7% state sales tax. A few larger cities have a 0.25% sales tax. A handful have tourism sales taxes (an extra 2% on premade foods and hotels). There are no county sales taxes that I know of. Overall I think our sales taxes are a lot lower than in a lot of places. Property taxes are stupid low, too. Tax and tag on new cars from what I understand is quite high the first few years, but I really don't know. Our "new" car is 17 years old and costs $36/year to tag.

[myangelandmyprincess]

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@southern*sweet*tea wrote:

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@myangelandmyprincess wrote:

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@southern*sweet*tea wrote:

In my state, as long as the tax is paid on time, the discount is 2%, not to exceed $50. I'm assuming the $50 is per sale and not total. I'm really not sure .  We are NOT a market facilitator state, so y'all don't have to worry about Ebay keeping any money away from MS.

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I'm in MS they love taxes I predict eventually they'll jump on board 

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No, it's already in place here.  Tax is collected by an individual seller if the seller has sold $250,000 or more the previous calendar year, otherwise the onus is still on the buyer to pay the taxes they owe to their state. This is to lessen the burden for truly small sellers. We try to be small business friendly.

We have 7% state sales tax. A few larger cities have a 0.25% sales tax. A handful have tourism sales taxes (an extra 2% on premade foods and hotels). There are no county sales taxes that I know of. Overall I think our sales taxes are a lot lower than in a lot of places. Property taxes are stupid low, too. Tax and tag on new cars from what I understand is quite high the first few years, but I really don't know. Our "new" car is 17 years old and costs $36/year to tag.

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My understanding is that many of the states who have begun the facilitatory laws already had laws just like MS in place. They did the new laws to ensure even more revenue since it's based on the facilitator sales in that state and not just the individual seller 

and yes a tag on a new car can be a couple hundred