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WHY IS EBAY CHARGING SALES TAX ON SHIPPING?
I am trying to make an offer on an item. My combined state and local tax rate is 8.125%
After making the offer, the breakdown is:
Your offer
$500.00
Shipping
$103.37
Tax *We’re required by law to collect sales tax and applicable fees for certain tax authorities.
$49.02
Road improvement and food delivery fee
$0.50
Total
$652.89 if offer accepted
So tell me why is ebay also taxing the shipping?
5 comments
monroe67
Mentor2 weeks agoThe question at the end of your post is:
"So tell me why is ebay also taxing the shipping?"
This statement by eBay in the payment breakdown tells you the reason why:
"Tax *We’re required by law to collect sales tax and applicable fees for certain tax authorities.
$49.02"
Apparently the "tax authority" that governs the zip code in your delivery address
requires eBay, as it states: "to collect sales tax and applicable fees."
One of those applicable fees is also shown in the payment breakdown:
"Road improvement and food delivery fee
$0.50."
All of this checks out with readily available info:
The State of Minnesota requires buyers to pay sales tax on shipping costs when those sales taxes are listed separately from the item price. This applies to purchases from online marketplaces such as eBay, Etsy, Vinted, as well as to retailers' websites, catalog purchases, such as Lands End, and TV retailers, such as QVC, and many many others.
AND
The State of Minnesota requires buyers to pay a $0.50 delivery fee when a purchase of more than $100 is delivered to an address in Minnesota.
If eBay did NOT collect that sales tax and delivery fee from you, eBay could be in trouble with the State of Minnesota.
ten_o_nine
Mentor2 weeks agoWhy Shipping Is Taxed?
State Laws: A majority of U.S. states legally define shipping and handling charges as part of the total taxable purchase if the item itself is taxable.
Marketplace Rules: eBay acts as a marketplace facilitator, meaning the law forces them to automatically calculate, collect, and send state and local sales taxes for transactions on their platform.
State Differences: If you do not see a tax on shipping, it means the delivery address is in one of the minority states that exempts shipping costs from sales tax.
jason_cress
OP2 weeks agoThanks. It's bad enough to even pay sales tax on basically garage sale person-to-person transactions, but to pay sales tax on shipping is another level altogether.
May ebay be one day disrupted to irrelevance and oblivion.
glorybells
·2 weeks agoThis stems from the Wayfair vs. South Dakota decision several years ago. The supreme court of SD went after Wayfair (and then other online states) and forced these places to begin paying the state sales tax. Other states took notice, and said “Count us in”, and changed their laws to force these places companies to collect sales tax. Now all 45 states that have a sales tax charge it, and most of them (but not all), also charge the tax on shipping.
You’re missing the point. EBAY has nothing to do with this. The state governments of the United States have TOLD eBay, you WILL do this. If you’re ticked off about it, complain to your state legislature. They’re the only ones who can do anything about it.
monroe67
Mentor2 weeks ago"May ebay be one day disrupted to irrelevance and oblivion."
As stated above by several eBay Community Mentors,
eBay is legally required to collect the sales tax and the delivery fee that it does.
The LAWS of the State of Minnesota require eBay to collect those taxes and fees.
If you had your purchases delivered to Iowa, just one state south of you, you would not have to pay sales taxes on shipping prices nor a 50 cent delivery fee.