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Paying Sales Tax on a Grocery Exempt Item
I purchase some Kirkland Organic EVOO and was charged Sales Tax for it. I live in Pennsylvania and olive oil is grocery exempt in every part of the state.
I contacted the seller who said "Sales tax on eBay is automatically calculated and collected by eBay based on your shipping address and local regulations. As a seller, I do not control or add the sales tax.".
I contacted eBay support who, among other things, said "eBay collects and remits sales tax on behalf of sellers for items shipped to customers in certain US states, including Pennsylvania, as required by law. This means eBay may add sales tax at checkout even if the item, like olive oil, is generally grocery exempt in Pennsylvania. Tax laws and collection responsibilities vary by state, and eBay follows the applicable tax laws for your shipping address."
Sales tax was collected for my item when it obviously should not have been. Who has the money and how do I get it back? This sounds like a potentially significant money grift.
house*of*paws
Mentor6 months agoHi @cdarney
Taxes on online purchases do NOT follow the same rules/laws as taxes collected locally. Your tax money was sent to the Pennsylvania Treasury, which is from where you would have to try to get it back if you feel they are grifting from you.
cdarney
OP6 months agoWhy would eBay even collect sales tax for a grocery exempt item?
eBay collects and remits sales tax on behalf of sellers for items shipped to customers in certain US states, including Pennsylvania, as required by law.
According to Pennsylvania law, grocery items are exempt from sales tax.
How do I know the money was sent to the PA Treasury? It's not required by law and it should not have been withheld by eBay.
Again, this seems to be a potential money grift. In my case it's less than $3 but multiply that by a few hundred/thousand/million transactions per day.
house*of*paws
Mentor6 months ago@cdarney
eBay has about 1.7 billion listings at any given time. Most of eBay's procedures are performed by 'bots', since human beings are incapable of looking at every single listing for tax collection purposes, claims, etc. Your item was listed under Home & Garden > Food & Beverages. Not all food & beverages are exempt from tax, which I've learned from my own experience.
I Googled: Is cooking oil exempt from PA sales tax? ... and I received the following AI reply:
I also attempted to purchase your item to see whether or not I would be charged tax in California, which generally exempts food items. I also was charged tax on the product, but not on the shipping, which is NOT taxed in CA (but apparently is in PA).
I recommend you pursue this line of questioning with someone in PA government to be certain of your facts before making accusations of grifting. That only seems fair. 🙂
cdarney
OP6 months agoAsking various AI sites "Is olive oil exempt from PA Sales Tax?
Perplexity:
In Pennsylvania, olive oil is generally treated as a grocery “food item†and is exempt from the 6% state sales tax when sold as regular, unprepared food (e.g., a bottle from the grocery shelf).
ChatGPT:
Yes — olive oil is generally exempt from Pennsylvania sales tax when it’s sold as a grocery item for home use.
Grok:
Yes, olive oil is generally exempt from Pennsylvania sales tax when sold as an unprepared grocery item (e.g., bottled olive oil purchased at a grocery store, supermarket, or similar food retailer for home consumption).
From the PA Department of Revenue:
In Pennsylvania, olive oil qualifies as an exempt food item under state sales tax rules when purchased unprepared (e.g., bottled grocery store olive oil).
I think your query and answer from Google was referring to cooking oil for commercial use rather than home consumption. A 2L bottle of oil would not be well-suited for commercial use.
As far as the accusations, someone collected $2.94 to cover sales tax for an item that is exempt. I have no idea where the money is. I have no idea what will happen to the money. It's in someone's pocket - just not mine. Yes. I can make accusations of grift.
monroe67
Mentor6 months ago"How do I know the money was sent to the PA Treasury?"
Trust. You must trust that eBay follows all laws that apply to them, one of which is to remit -- send -- the money eBay collects as sales taxes to the sales taxation authority of the state* to which the item was delivered. *(State or District [Columbia] or Territory [e.g., Puerto Rico])
This is the same kind of trust in laws and in other people that you use every time you buy food or beverage from a restaurant. You trust that the restaurant will sell you products that meet all food preparation health and safety laws. That same kind of trust you use when you drive your car on public thoroughfares. You must trust that other drivers know and abide by the same laws that you abide by.
"It's not required by law and it should not have been withheld by eBay."
But it -- sales tax collection -- is required by law.
Because it is required by law, sales tax absolutely should have been withheld by eBay.
"Again, this seems to be a potential money grift."
These state laws about sales taxation on things purchased through online platforms -- of which eBay is only one of thousands -- these state laws all came into existence after the June 2018 US Supreme Court decision in the case of Wayfair, Inc., v. South Dakota.
"In my case it's less than $3 but multiply that by a few hundred/thousand/million transactions per day."
OK. Here's a slightly different spin on your rounded-up-to $3.00 "involuntary contribution" to Pennsylvania's sales tax revenue:
If you don't neeeeed those $3.00 for, say, part of your co-pay on a life-saving prescription drug, you could just let Pennsylvania keep them. The state government of Pennsylvania will surely use your $3.00 for a good purpose, don't you think? If you don't trust that Pennsylvania will use your $3.00 properly, you will probably need to request a sales tax refund from the State of Pennsylvania.
cdarney
OP6 months agoTrust that food quality/safety laws are followed or trust that other drivers abide by the laws of the road are very different. There are legal entities charged with enforcing those laws and regulations.
I've bought many grocery items on various website and have never been charged sales tax but am charged sales tax on other non-exempt items. Why is it that eBay can't figure out how to do this?
I don't feel it should be my responsibility to spend time and effort to collect money that should never have been withheld in the first place. I'm not sure how the PA Department of Revenue would be able to tell my transaction form any of the others. I don't imagine the state gets a breakdown in the level of detail necessary to process a refund for me on one item.
Slightly off topic - I know I could make a whole bunch of money by going to the county government office and getting a mailing list of all county residents. I would make an official looking form with an official sounding name telling everyone they own a Per Capita tax of $3. There are about 575,000 residents in my county and if only a small percentage of them sent me the money, it would be significant. Who would complain about just $3? Who would complain about eBay collecting just $3 without accounting for it?
monroe67
Mentor6 months ago"Trust that food quality/safety laws are followed or trust that other drivers abide by the laws of the road are very different. There are legal entities charged with enforcing those laws and regulations."
The legal entity charged with enforcing all laws and regulations of the Commonwealth of Pennsylvania --
including laws and regulations of Pennsylvania's sales taxation --
is the Attorney General of the Commonwealth of Pennsylvania.
The current Attorney General is David W. Sunday, Jr. The website is: attorneygeneral.gov
"Submit A Complaint" is an option that appears directly beneath his portrait on that website.
Wishing good luck to you in your future (legal) endeavors.
wooden_flower
Mentor6 months ago@cdarney
eBay determines what tax should be applied based on the category the item is listed in. If, for example instance, your seller listed the oil under health and beauty, then it would not be viewed as food.
All tax collected is remitted to the state.
What is the item #?
cdarney
OP6 months agoItem number: 177576347773