seller fee on sales tax

[btjfitter]

The Final value fee charged to the seller on sales tax is a bit over the top. I get the final value fee on shipping as early on people were selling 100.00 items for .99 and then adding 99.00 shipping. not happy with it but i understand it.  A lot of states give you a 2% timely discount on the  sales tax payment when you pay the sales tax to the state on time. Is Ebay also getting the 2% plus the final value fee. 

[classynottrashylingerie]

That’s a great question…..plus corporations pay quarterly.  That means they can invest that money in the meantime.  More $$$ for eBay, less for us sellers. 

[dbfolks166mt]

     The application of the FVF to the sales tax, the discounts they receive and the interest they earn is simply smart business practice. I would suspect a lot of that revenue is offset by the administrative costs associated with the collection, and remittance of the sales tax to the individual states, counties, municipalities, etc. on a periodic basis. The same applies to any VAT or other foreign taxes they have to collect on internationals sales. I for one am glad eBay handles this in the wake of the Supreme Court decision on Wayfair. I had enough overhead in trying to collect the sales tax for one state prior to the SC decision. 

     There is no way that I would want to handle that for every single state and have to determine what the tax %  may be depending on where the individual lives in each state. Illinois probably has the most complex state tax laws and sales tax can range from 6-10% depending on where the buyer lives. Pretty cheap accounting from my perspective. The FVF on the sales tax for the sale of a $100 item for a state that has a 6% sales tax rate would be $.75. 

     Then of course if the individual sellers were collecting and remitting the sales tax of course the sales tax would contribute to the Gross on your 1099 which you would have to offset by keeping track of and deducting all the sales tax you paid to the individual states. Even if you got the 2% discount for paying early that would cut into your deduction and of course you would pay tax on those savings. 

     I am a small seller and would rather not have to deal with the nightmare all of this would present. 

[fab_finds4u]

if you were collecting your buyer's total  payment you would expect to be paid a fee to make sure all the money you collect goes into the right pockets.  They're performing a service. It's not a free service. Maybe you would rather figure out what tax you should charge the buyer and you collect and  remit tax to all the different states.

[fab_finds4u]

What interest?  eBay has declared they do not earn interest on the buyer's payment, on money being paid out. It's  in the Q&A section in Managed Payments.

[forward-motion]

The fact that I do not have to handle sales tax and keep up with the laws is well worth the small fee that eBay charges. Furthermore, I don't pay the fee's the buyer does. 

[solidguitar1961]

Before Ebay started doing that they had a higher fee ,they lowered it to compensate for it .

Example before 10% Ebay 2.9% Paypal . $100 item plus $6 tax = $10 Ebay fees. $3.07 Paypal plus $.30 = $13.37.

Now Ebay 11.7% x $106 total $12.40 plus $.40 = $12.70 .

[solidguitar1961]

Edit  $.30 on last not $.40

[stainlessenginecovers]

Yes; ebay is charging another $1 for a $100 item to have a company collect, create reports for up to 3600 counties (45 states) and remit the $. 

Well worth it compared to what was brewing before the USSC Decision 

[luckythewinner]

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@btjfitter wrote:

The Final value fee charged to the seller on sales tax is a bit over the top.

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I charge shipping at the actual cost, so my selling price is the only portion of the buyer's total payment that I would be able  to keep even if eBay's fees were zero. 

So IMHO, the only meaningful measure of how much of "my money" eBay takes is to compare the eBay fees to my selling prices. Here is what percentage for the past 5 years: 

2021 total fees were 20.26% of my selling price

2020 total fees were 23.24% of my selling price

2019 total fees were 20.23% of my selling price

2018 total fees were 18.93% of my selling price

2017 total fees were 18.57% of my selling price

2016 total fees were 19.31% of my selling price

2015 total fees were 19.58% of my selling price

Obviously if I offered free shipping, I would subtract the actual cost of shipping from my sales price and compare eBay's fees to that. 

[soh.maryl]

You seem to have been charged a significantly greater percentage in final value fees.

Since the FVF is a percentage of the item price, the shipping cost and the state sales tax, if any,  (plus that 30  cents), can you show us the figures you used to arrive at those percentages?

And, at those levels, why are you not expressing significant outrage? 

[luckythewinner]

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@soh.maryl wrote:

You seem to have been charged a significantly greater percentage in final value fees.

Since the FVF is a percentage of the item price, the shipping cost and the state sales tax, if any,  (plus that 30  cents), can you show us the figures you used to arrive at those percentages?

And, at those levels, why are you not expressing significant outrage? 

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I'm confused by your post.

If I sell an item for $10 and the shipping is $4 and the sales tax is $1, my fees are 30 cents plus 12.55% of $15. That comes to $2.18 which is 21.8% of my selling price of $10. 

Please explain why this "seems significantly greater percentage" than what any other seller would be charged for the same transaction, and why I should be "expressing significant outrage".

Isn't that exactly what eBay's fee schedule says they would charge, and exactly what I agreed to?

[maxine*j]

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@btjfitter wrote:

The Final value fee charged to the seller on sales tax is a bit over the top. I get the final value fee on shipping as early on people were selling 100.00 items for .99 and then adding 99.00 shipping. not happy with it but i understand it.  A lot of states give you a 2% timely discount on the  sales tax payment when you pay the sales tax to the state on time. Is Ebay also getting the 2% plus the final value fee. 

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This is the industry standard.  Payment processors charge theri fees based on the total amount the customer is charged -- the total for merchandise, handling, shipping, surcharges, sundry costs, sales tax.  PayPal did, too, in case you never noticed that.

As for what discount eBay may or may not get, that varies from state to state.  Some give a discount, and some do not.  Discounts are usually a fraction of 1%.  There is nearly always a cap on the allowance.  Sometimes the discount is only on the state portion of the tax but not on the "tag-ons" added by local taxing authorities.  And so on.  Here, since you're interested, are some good examples:

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

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[monica-sells]

@classynottrashylingerie 

You are obviously an astute and talented seller....but we don't want to mislead the sheeple who will read your statement and get in a huff. Do you really think the GOV would let ANY entity "sit" on money for a full 3 months? They DON'T....

All Sales Tax Collectors are guided by State Laws....almost ALL of them require remittance BASED ON THE AMOUNTS THEY COLLECT DAILY.......

Quick and Dirty examples

Mom & Pops General Store collects $5.00 a day on average (150.00/month) They are required to file EVERY MONTH

Joes Bar collects $10.00 a day on average (300.00/month) They are required to file WEEKLY

Target collects $10,000/day on average...they are required to file DAILY

State Laws dictate filing frequency based on volume. Some states offer a measly percentage discount for paying 'on time' some don't....

Just an FYI for people who may read into your statement.....

[stainlessenginecovers]

There is confusion because you are doing your math differently than how ebay charges their percentage.

You are comparing all fees against just the ITEM price, which is fine if that is how you want to look at it. 

As you know; ebay uses all 3 collectables for their fvf. 

$10 item with $5 shipping and $1 tax is $16. 12.55% of $16 is $2 Fee. 

Doing your math, $2 is 20% of just the $10.

The reason doing the math this way is incorrect for most is because they may have a $10 item for sale as well as a $300 item for sale.

$300 item with $40 shipping and $28 tax is $368

12.55% of $368 is $46

$46 to a $300 item is 15.3%

A difference of almost 5%.

But again, for 'business purposes' if a person wants to figure their 'average true cost of an "items ONLY sold', then it does work for that person/business.