Why am I paying VAT?

[7-l]

So I’m in US and have bought 3 separate items from a Great Britain seller and have been charged VAT on each one. The 1st two are under the 800.00 threshold  and I should not have been charged and I was charged on the 3rd even though it’s being shipped to US. Why am I being charged VAT?  

[marnotom!]

Is the “VAT” you’re being charged the same amount you’d be paying in state and regional sales taxes?

[7-l]

No. It’s separate. 

[lacemaker3]

@7-l 

What country and/or state were the items being shipped to?

Can you please  share a screenshot of the order details, that show you were charged VAT? Block off or crop out all personal details.

You said the VAT was separate from state sales tax -- were you charged both?

[7-l]

Items from UK  to US, Louisiana.  Here’s the issue I think - I got a reply from eBay. They said it’s “tax” , not VAT…. The very confusing part is that in the eBay email I get to pay the invoice, tax line is not even shown, but IS included in total. When I hit email link to pay invoice, tax shows as VAT! BUT when I then go to look at paid invoice it shows as tax. This is confusing & misleading - to me at least. Why would a certain tax be show or NOT show 3 different ways?  The sequence of laying the invoice , I did not screen record and the attached is all I have showing not no tax is itemized.  I’m guessing that if any authorities come after me for tax , I at least have a receipt showing I paid some tax - but what - local, state or federal?

[lacemaker3 · Accepted solution]

@7-l,

I agree, that it is very confusing how the tax is shown when you are dealing with an international sale between the UK (or Europe, for that matter) and the USA.

It depends on which eBay website you are on at the time, whether it's eBay USA or eBay UK. Part of the problem is because VAT (in the UK and EU) is always supposed to be included in the purchase price, it is never supposed to be shown as a separate line item, the way sales tax is in the USA.

eBay does not really resolve these differences very well, and that has caused the confusion, which is very understandable.

From your screenshot, it looks like the purchase price was GBP 1,500, and shipping was GBP 12.90, for a subtotal of GBP 1,512.90.

Then the total was GBP 1,650.90, so the additional (unspecified) amount was GBP 138.00. 

138.00 / 1,512.90 = 0.0912 = 9.1%, which would be the sales tax that you were charged. The base sales tax rate in Tennessee is 7%, but with local/municipality taxes, that can range up to 10%, so without knowing exactly where it was delivered, that is a very reasonable amount to be charged. I doubt that anyone will ever ask you about this, because I'm not aware of any state that enforces unpaid sales/use tax. You can use your Order Details page to show you paid it, if you need to.

You mentioned an $800 limit earlier -- that is the threshold for being charged customs and duties on an imported purchase. Those are completely separate from the sales tax, and are not collected by eBay. You may be charged customs and/or duty on the package before the courier will deliver it to you. Sometimes, the customs office will waive the amount, but I have no idea when or why that might happen, so it's best not to count on it.

[7-l]

Thanks much. I’m just going to hang on to receipts - and we’ll see. 

[lacemaker3]

Try going to your purchase history on eBay USA: My eBay - Purchases, and open the Order Details page from there. You can use that as a receipt, if you need one.

Here's an example from a purchase I made from the UK last April, so about a year ago. The summary on the right hand side has a line item for "tax" which is the state sales tax that eBay collected. That is the same way your sales tax is shown on purchases from the USA.

For purchases delivered to the USA, the state sales tax is pretty much the only tax that eBay collects. (A rare exception is that some states have a recycling/disposal charge for some items, like electronics.)