eBay charging final value fees on sales tax ?!

Question

spoke with eBay customer service today regarding this travesty. eBay cs says this policy is unpopular and is under review. NO KIDDING! is this policy even legal? better be prepared to issue refunds and retroactively. contacted my states tax commission/dept of revenue and registered a complaint. they are quite busy with tax season but still interested. curious to see the outcome.

rfmtm · Answer

Yes, ebay is charging its FVF on sales tax. While charging a payment processing fee is usual and common, it's generally around 3%, this higher commission for collecting the tax is an ebay original. Plus venues like ebay already get to keep a tax processing fee from marketplace states. So ebay gets the normal 3%, plus the additional FVF portion, and gets a kick back from the state to boot. Essentially ebay has figure a way to do the job once, but get paid three times.

It is legal, but some states like mine are looking into it since they already provide a payment for the service to the venue.

wooden_flower · Answer

Of course it is legal. All payment processors charge their fee on the total from the buyer, including sales tax.

eBay reduced the fee %s when they started processing the payments and the sales tax was included in the total. If they took it out now, which I highly doubt is being considered, the %s would go up - the fees would not go down.