eBay overcharged me on sales tax. I just bought an HP Printer for $50.99 and Checkout charged me $3.71 sales tax. I paid with PayPal. My tax rate is 5.225%, which would make the sales tax $2.66. How do I get a refund on the overcharged sales tax? The shipping was $20.00, but Missouri does not charge sales tax on shipping.

Sales tax on purchases | Ask a Mentor

romrodtechgen

OP7 months ago

eBayers,

I appreciate all the Replies, but according to the letter I received from the Missouri Department of Revenue in August of 2017, a copy of which I keep with my tax records, "Senate Bill 16, effective August 28, 2017, provides that usual and customary delivery charges that are separately stated from the sale price of the item are not subject to sales or use taxes. Charges for delivery will not be subject to tax if they are separately stated from the price of the item. Charges for delivery that are included in your sales price remain subject to tax."

The shipping cost was listed separately in the Ad from the Item price, so sales tax does not apply to the shipping. If the Item price said "Shipping included" or "Free shipping," then sales tax can be charged on the total Item price.

So, as for my original question -- How do I get a refund on the overcharged sales tax?

Rodney

inceptions

Mentor7 months ago

27596 View listings

@romrodtechgen

You are misunderstanding. The shipping cost is part of the total bill (even if a separate line item), and so it is taxed. If you received two bills, one for the item and one for the shipping, then the shipping would not be taxed.

romrodtechgen

OP7 months ago

389 View listings

I am not misunderstanding. I quoted you what MDR sent me. There have been no revisions to the law since 2017. And separate bills are not required -- just separate charges.

Reply #4 from myangelandmyprincess looks like an AI Overview:

"Handling and shipping charges for taxable goods are generally taxable in Missouri when included in the sale price. In other words, if the purchaser is required to pay for shipping as part of the sale price, the entire sale price is taxable. Separately stated transportation charges are generally exempt provided the purchaser is not required to pay for the service. "

If it is, it's wrong. I've had a lot of AI errors lately.

It says you've been buying and selling on eBay since 2004. I've been doing the same since 2003, and have had my own Missouri business since 1987, complete with tax compliance.

inceptions

Mentor7 months ago

27596 View listings

https://www.sos.mo.gov/cmsimages/adrules/csr/current/12csr/12c10-103.pdf

Page 18, Basic Application, (C) All other transactions

If the purchaser obtains a service as part of a transaction in which the true object is the purchase of tangible personal property, the entire sale price is taxable even if the charge for the service is separately stated.

The reason you are charged tax for shipping & handling on your eBay purchases is because your state requires eBay to collect it.

myangelandmyprincess

Mentor6 months ago

3035 View listings

@romrodtechgen wrote:
I am not misunderstanding. I quoted you what MDR sent me. There have been no revisions to the law since 2017. And separate bills are not required -- just separate charges.
Reply #4 from myangelandmyprincess looks like an AI Overview:
"Handling and shipping charges for taxable goods are generally taxable in Missouri when included in the sale price. In other words, if the purchaser is required to pay for shipping as part of the sale price, the entire sale price is taxable. Separately stated transportation charges are generally exempt provided the purchaser is not required to pay for the service. "
If it is, it's wrong. I've had a lot of AI errors lately.

It says you've been buying and selling on eBay since 2004. I've been doing the same since 2003, and have had my own Missouri business since 1987, complete with tax compliance.

That is a quote from avalara which also has a link to the gov site. This is what the actual law from the gov site is.

(3) Basic Application.

(A) Shipping, Handling, Minimums, Gratuities and Similar

Charges.

1. If the purchaser is required to pay for the service as part

of the sale price of tangible personal property, the entire sale

price is subject to tax.

2. If the purchaser is not required to pay the service charge

as part of the sale price of tangible personal property, the

amount paid for the service is not subject to tax if the charge

for such service is separately stated. If the charge for the service

is not separately stated, the entire sale price is subject to tax.

I know to you that sounds like if it's on a separate line it doesn't have to be paid but that is not what it means and this is a common way this is written for many states. The part to take away from it is if the purchaser is required to pay or if the purchaser is not required to pay at the front of each part. If you are required to pay the shipping in order to receive the item it is considered part of the value of the item and therefore taxable.

@romrodtechgen

monroe67

Mentor7 months ago

199 View listings

"So, as for my original question -- How do I get a refund on the overcharged sales tax?"

You would have to request a refund from the State of Missouri.

IF the State of Missouri asks you to file a state income tax return, they might have some line where you can claim a credit for -- your phrase: "overcharged sales tax."

(BTW, I tend to agree with the posts, plural, from "inceptions", above. You were required to pay the shipping ("delivery") price shown in the eBay listing. eBay would not have accepted your payment of only the price of the item. Moreover, eBay would not have instructed the seller to send your purchase if you had not paid the shipping ("delivery") price shown in the listing. Therefore, it seems that sales taxes on your shipping price were appropriate.)

inceptions

Mentor7 months ago

27596 View listings

Hi @romrodtechgen

Missouri does charge tax on shipping when it is part of the total sale. Only if shipping is billed separately (which doesn't happen on eBay or on most other websites where you might shop) is shipping not taxed.

monroe67

Mentor7 months ago

199 View listings

" . . . but Missouri does not charge sales tax on shipping."

That appears to be true, per a quick Google search within the last five minutes.

eBay collects sales taxes based on the laws of the state in the delivery address.

This may sound like an odd question but -- was that purchase delivered to an address in Missouri?

Or was it perhaps delivered to one of your neighboring states, Kansas or Arkansas or Illinois?
Those states do collect sales taxes on shipping.

myangelandmyprincess

Mentor7 months ago

3035 View listings

@monroe67 wrote:
" . . . but Missouri does not charge sales tax on shipping."

That appears to be true, per a quick Google search within the last five minutes.

eBay collects sales taxes based on the laws of the state in the delivery address.

This may sound like an odd question but -- was that purchase delivered to an address in Missouri?
Or was it perhaps delivered to one of your neighboring states, Kansas or Arkansas or Illinois?
Those states do collect sales taxes on shipping.

Missouri seems to be one of the States that doesn't have sales tax on shipping if it's a separate charge that you don't have to pay in order to receive the item.

"Handling and shipping charges for taxable goods are generally taxable in Missouri when included in the sale price. In other words, if the purchaser is required to pay for shipping as part of the sale price, the entire sale price is taxable. Separately stated transportation charges are generally exempt provided the purchaser is not required to pay for the service. "

In order to receive most items on eBay you'd have to pay for the shipping so it's considered part of the value. If there was an option for pick up not requiring shipping to be paid for then it would might not be taxable.

myangelandmyprincess

Mentor7 months ago

3035 View listings

Tax on shipping for Missouri would be applicable for most eBay purchase. Missouri does like many states and charges tax on shipping if you have to pay shipping to get the item then it is considered part of the value.