Ebay profiting on tax collection
Frequent topic, yet to date it has no resolution.
Ebay profits by collecting from sellers a percentage on the taxes it collects on each transaction.
Defenders say it costs this amount for Ebay to remit taxes to the various states. For example, a $1k item with $100 in taxes costs Ebay $15 (15Ùª) to account for and remit those taxes? Doubtful. Further, there are economies of scale that being this cost way down when submitting taxes linked to many transactions to a single state.
In the end, discovery via class action
litigation will show that Ebay is profiting off the taxes it collects. Worse yet, the profits increase with the the size of the transaction. Ebay's effort to collect and remit taxes does not increase with the size of the transaction.
Lastly, this form of fraud discourages transactions by punishing sellers of higher priced items that are charged higher fees on taxes collected. The Internal Revenue Service can be expected to take issue with this.
My group may even assert discriminatory claims on this basis in our federal court Complaint. If you are an Ebay seller, I encourage you to join our class action filing.
kh_femi
·3 months agoHi everyone,
Due to the age of this thread, it has been closed to further replies. Please feel free to start a new thread if you wish to continue to discuss this topic.
Thank you for understanding.
inhawaii
·3 months agoThis thread is over a year old ... and it looks like ebay is still ripping up off on taxes. 😉
libertynumber1
·3 months agoAlso, Ebay seems to be charging sales tax on items that are sales tax exempt in some states. For example, in New Jersey, clothing is exempt from sales tax. I often sell men's sweatshirts on Ebay. When the buyer is in New Jersey, Ebay is still charging them sales tax (and charging seller fees to me on that amount).
I know that these items are in fact sales tax exempt in New Jersey because I live in this state, and the vendor I purchase them from doesn't charge sales tax to me. I've also bought a few of them at my local Dick's Sporting Goods and wasn't charged sales tax there either.
marnotom!
·3 months agoThe problem is that there are exceptions to the exemption on sales tax for clothing (particularly on sports wear) in New Jersey and eBay likely has not been given any guidance by the state on how to deal with sales of clothes that have been deliberately miscategorized in order to avoid taxation. Is there a process a buyer can go through to get a refund from the state treasury on erroneously taxed clothing?
For anyone who’s interested, info on this starts on page 20 of this document:
https://www.nj.gov/treasury/taxation/pdf/pubs/sales/su4.pdf
casey-86
·1 year agoI think what people don't understand yet is how vastly unpopular doing this is. Its not about whether its legal or good to grow their business. What matters is the user's view on it. Clearly this is not coming off well to a lot of users, especially when we went so long without having this.
rfmtm
·1 year agoMy main complaint is ebay already collects a processing fee from my state to collect and remit sales tax as a marketplace venue. I don't get a break when I collect and remit the tax and payment processors don't get this kickback either, plus only typically charge 3%, which is customary, while ebay charges the full FVF to the tax amount and still gets the kickback as well.
My state, and evidently some other states looked into this, but since it is only ebay doing it, not illegal, and nobody really complaining, as most don't even realize states pay this kickback, ebay gets away with it. So for now we can only just grin and bear it.
mam98031
·1 year agoThat is what I've always said and where the cost should be, with the states that require Marketplaces to collect and remit these taxes. The states should be paying for that service and most if not all actually do in one way or another. Some give a nice discount for paying within a certain period of time and others offer discounts once it reaches a certain $$ amount. Likely some other method too.
carlmarxx
·1 year agoI forgot also in that deal that Ebay turns over all sale tax collected from seller 's around the state of Ca. and San Jose get's 70% and get's 30 % of the take . and none of the other city's get a dime of it do to that tax loop hole . State Rep's got a bill to Gover's desk in Jan.2020 to close that loop hole never got signed do to coved 19 shutdown .
chapeau-noir
·1 year agoWell, I think the OP should go for it. Make it BIG, make it loud, make it beautiful.
bdmh-enterprises
·1 year agoI have an idea!
What if sellers could opt out of paying FVF on taxes and instead collect, save and remit on a quarterly basis the taxes from all of their customers themselves? I'm sure the thousands of different forms and rules will be no problem for all the keyboard lawyers complaining about this.
Personally though I'll let eBay handle it 'cause 13% is a FREAKING BARGAIN for doing all that! Nobody likes fees, but this is NOT the one to complain about.
Imagine the complaints on this board if eBay DID NOT do all this for us LOL.
youn2240
·1 year agoThat's what is also funny about the guy wanted ebay to be sued. if you go to real life places and sell like an antique mall they charge both rent and 15%-20% with also waaaaay less traffic so ebay beats that in value for what I sell. You can go to the flea market that probably costs 25-50 dollars and you will be constantly lowballed by people like me and your stuff will lose value every single time you set up through being slightly damaged by packing it up and setting it in the dusty area and sitting in the sun when it's 105 degrees out or 30 degrees out. so not only is that actually harder your items lose their value from the jostling. I also set up outside of ebay so I sure like the value that ebay is worth to me because I am well aware of the alternatives that are out there. One thing I do like is ebay it is pretty good time.
kensgiftshop
·1 year agoI had a booth at a resell shop for a little while.
It was like $25 a month for the spot, 25% on the sale and a minimum of $10 a month.
So I was out $35 a month without selling anything.
I'll gladly pay the little fee from Ebay.
chapeau-noir
·1 year agoYes I go to these antique malls and there is so.much.stuff (mostly glass and figurines) that just sit , getting covered with dust. There's just not enough foot fall.
mam98031
·1 year agoIt is more likely that less and less people are collecting that kind of stuff anymore. Sad but true because that is likely some beautiful stuff. But younger collectors collect different things than Baby Boomers.
mam98031
·1 year ago@bdmh-enterprises
While an interesting idea, one that actually has been discusses many times on the threads, it is something that currently can't be done unless each state that has a MFL amends their law.
kensgiftshop
·1 year agoHave you seen all the complaints from sellers having to claim their income on their income taxes?
I can't see them wanting to file the state taxes either.
jerseyboymusic
·1 year agoHere we go again...
youn2240
·1 year agoseriously though why is it always people with like under 20 items listed that really want to take ebay to court? I want you to shut up and not f with my money. I think that is preferrable for my household that people with essentially no vested interest are able to set the policy for another entity. you have 17 items listed.
farmalljr
·1 year agoSo if I showed up to your house and said, you are going to give me $100, despite having no reason for it, that's cool?
I have been part of eBay for decades. I no longer sell here like I used to. But I still buy here and am a "high value buyer" according to eBay's standards. I'm not just some dude passing by throwing rocks to be mischievous.
The point is, if eBay is taking money from sellers "just because they can", that makes no sense. If it's not legal, I don't want them doing it, like I do not want other people and companies doing things that are not legal.
Your fees going up have more to do with profits eBay wants to make and nothing to do with how it treats sellers. You sell on eBay at your own pleasure, there are many other places to sell your wares. One thing is for sure, fees will eventually go up no matter what anyone says or does. Fees are how eBay makes money on sales. If your sales are limited to only eBay and you are that dependent on it, you may want to rethink all that. It generally does not pan out well for people who rely mostly on eBay for sales. All it takes is one glitch, and it all can go away.
youn2240
·1 year agoIf I had agreed for you to provide me a service and your fees you received from me were 100 dollars short I would then pay you what I agreed to and apologize for shorting you. If you just showed up demanding an extra 100 dollars I may have to show you my karate skills with swift kicks and kung fu judo flip tricks. It's an entirely different scenario you are proposing than what is happening. you're proving to be out of touch with reality and you're the one who is hoping a random court case comes about where ebay gets sued. but at least now you're admitting this is based on your feelings and not anything that will ever coagulate to be regurgitated out in a court room.
youn2240
·1 year agoI get the frustrations though if I viewed reality like you guys ebay owes me about 100 dollars from last year. it is breaking my business to keep that from me. I can't overcome this and that 2 dollars a week is why it's so hard for me as a seller.
doc-holmes
·1 year agoAll I ask is that you please return and update us on your success. Many people come on here threating to sue ebay with a can't miss lawsuit and not one single solitary person has updated us. I have even asked, ahead of time, that they come back and let us know how it goes so we can one day too be successful, and every time it's crickets. So please, return after speaking to the lawyers and let us know how it went.
squinkercat59
·1 year agoThere are over 13,000 tax districts in the United States. I surely don't have the time to keep records, fill out forms and send payments to every district every month from where I had a sale. My accountant would charge me a heck of a lot, to do that for me every month (and I don't even know if he would). So the extra "fee" I pay Ebay for doing that for me is certainly a bargain, in my opinion.
It never ceases to amaze me, that people complain about this (how many threads have there been on this topic? hundreds?) when they agreed to the fees and policies when they signed up.
luckythewinner
·1 year agoFrequent topic, yet to date it has no resolution.
The resolution is simple and has always been available to you. If you do not like the fees here, don't use the site.
For example, a $1k item with $100 in taxes costs Ebay $15 (15Ùª) to account for and remit those taxes? Doubtful.
Where did eBay ever claim that the fee on sales tax only covered the cost of collecting and remitting it, and that they were not making a profit from it?
In the end, discovery via class action litigation will show that Ebay is profiting off the taxes it collects.
No "discovery" is necessary, since eBay freely admits they collect fees off tax collection. They announce it right on the fee page! What you seem unable to grasp is that is it not against the law to make a profit on a service you provide.
Ebay's effort to collect and remit taxes does not increase with the size of the transaction.
eBay's effort to collect and remit payment for the item does not increase with the price of the item, either. There is no law that says eBay cannot make a profit from running their business, and there is no law that says you cannot calculate fees based on the size of a transactions. Payment processors like eBay have been doing it ever since payment processors existed.
The Internal Revenue Service can be expected to take issue with this.
The IRS has no jurisdiction over commerce.
My group may even assert discriminatory claims on this basis in our federal court Complaint. If you are an Ebay seller, I encourage you to join our class action filing.
Hundreds of others have come here announcing their class action lawsuits, but they always end up being self-important blowhards making empty noises. I am not confident you will be the exception.
youn2240
·1 year agoThis seller might be serious 2 of the 8 items listed are law books. Hes going to be loaded when this is over.
tobaccocardyahoo
·1 year agoPrint out a copy of the Business Agreement which you and Ebay have agreed to.
Tell your lawyer about your complaint and ask him if he would like to take your case on a contingency fee basis as a class action.
When he stops laughing, ask him how large a retainer he would require, and what he would estimate the costs of bringing such a suit might be. When you stop crying, consider where you should be selling online.
gloryglorygifts
·1 year agoYou are under no obligation to sell on ebay. You can create your own website, collect your taxes yourself, and pay them to the various states and local economies that will require you to pay, as well as any VATs that you may have on international sales. You can also monitor those states, local economies and countries for any changes in their laws and adjustments in the taxes that you have to pay. Every state and local economy also has thresholds for reporting. Further compounding that is that not all taxes are due at the same time. I'm sure that you can find software or website hosts to do that for you. I know Godaddy has a tax table that you can use to create your site and have them tack on taxes. You have to file with the states yourself though and make manual changes to the tax rates.
Or, you can pay the fees padded into the fvf on ebay and have them do all that work for you. As someone that had to pay taxes in 4 states in the past for our various locations, I would GLADLY have ebay take care of it for us.
Good luck to you in your lawsuit.
cityslickercreations2004
·1 year ago"Or, you can pay the fees padded into the fvf on ebay and have them do all that work for you. As someone that had to pay taxes in 4 states in the past for our various locations, I would GLADLY have ebay take care of it for us. "
I am rarely happy when I am charged fees, but I am so grateful ebay takes on this job.
Other threads have accused ebay of trying to get rid of small sellers. Not providing this service would be a sure fire way of accomplishing this. And we all know ebay is such a great communicator...
I would be gone in a New York minute. Just hopefully not running from the IRS....
theteamsetguy
·1 year ago@the_mobile_store_36551 ,
Have you found a lawyer to take your case?
glorybells
·1 year agoGo back and read the eBay User Agreement. Find the part about eBay members agreeing to not file a lawsuit against eBay, and agreeing that any disputes would be resolved through arbitration.
I’ll wait.
johnrj1226
·1 year agoLooks like you have all your ducks in a row. Would strongly suggest you go it a alone and keep all the settlement the that will be awarded less the lawyer(s) fees. You can find a good one on those bill boards along many of the roads throughout your neighborhood or other 'hoods or standing on top an 18 wheeler big rig and shouting out "One call that's all"
Or you "the seller" could distribute the sales tax to all the various taxing authorities (state, county, etc almost for got in Georgia, Fulton County as two different sales taxes - certain other counties do similar and each county in the state can ad have different rates - in Georgia they have 8 different sales tax rate and the can and do change from date to date. Sounds like fun eh?? and you need to do it multiple times per year like 4 times. Forgot one thing - Louisiana does not have counties - they have parishes 68 of them. and they are some what very "unique".
chariot_badges
·1 year agoI dunno about you, but when it comes to work ... I profit from EVERYTHING I do, or I don't do it.
So, if eBay can't collect your taxes for you then one of two things happens:
You collect and file your own tax returns, or
eBay (and you) go out of business.
And when eBay goes out of business, who are we going to sue and complain about?
Besides Trump, of course.
kensgiftshop
·1 year agoBefore you draw Ebays attention to your account, you might want to make sure you're following their policies, like the feedback policy.
monica-sells
·1 year agodon't forget that the fees on processing that sales tax for you is tax deductible, lowering your taxable income...
also, please come back and post the case number so some of us can make a informed choice to join the class action by reading the actual complaint....Thanks
annadryl
·1 year agoHow is everything discrimination all the time? It's the same for all of us. Will it be discrimination when your lawyer doesn't take the case because there isn't one?
itsjustasprain
·1 year agoCorrect...
No one is DEFENDING it but it is possible to explain how it works and why Ebay is charging a percentage.
Charging for it as a percentage lets big sales offset the lesser income from smaller sales (of which there are probably a lot more).
You don't need discovery - a calculator will do.
Right - see above.
Doubtful but let's continue.
Why?
Oh, please.
First of all - file your case and try to get it approved for class action status. You do not currently have a 'class action filing' or a 'federal court Complaint' yet. Tell us what you have done AFTER you have done it - not before - and be sure to provide the relevant details to allow us to find it on-line.
Telling everyone what you are going to do Real Soon Now makes you no different from any of the other posts threatening the same thing that we see here every week. The way to get yourself known and visible is to actually FILE your case and THEN come back here to tell us about it or try to sign up others and so on. So good luck and please keep us updated on your progress.
the_mobile_store_36551
OP1 year agoEbay has already settled this exact same claim more than once. Enough said.
itsjustasprain
·1 year agoEnough indeed. Bluster and one-line replies will not support your claims.
Now go and find an attorney who will discuss your claims with you. Many law firms offer a free one-hour initial consultation for this very purpose - to sort out who might have a valid case vs. those who are simply honked-off about some business dealing that went sideways (your feedback does indicate that you become easily upset) so it should not cost you anything up front.
Then come back and tell us what you have done AFTER you have done it. Dodging questions that have been asked of you here does not suggest that you have done any real preparation - so now is the time. Come back to us as soon as you have further details to report. Good luck with your consultation.
rfmtm
·1 year agoYes, 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.
Nothing illegal, but your complaint needs to go to your state's taxing authority as they already are paying a kickback to ebay for collecting the tax and maybe should reconsider doing so.
janet9988
·1 year agoThere is a guaranteed solution.
Quit selling on ebay.
the_mobile_store_36551
OP1 year agoOr sue and make money.
dryophelia
·1 year ago@the_mobile_store_36551
Is it your plan to use the website while you litigate?
the_mobile_store_36551
OP1 year agoWhy not? Ebay has a monopoly. Nowhere else to go.
mam98031
·1 year agoThat is absolutely not true. Do your homework. There are many sellers that sell on multiple sites.
theteamsetguy
·1 year ago@the_mobile_store_36551 ,
Ebay is no where close to a monopoly. There are many other places someone can sell their stuff besides eBay.
roccotacodad54
·1 year agoBetter call Saul.
monroe67
·1 year ago"Lastly, this form of fraud discourages transactions by punishing sellers of higher priced items that are charged higher fees on taxes collected. The Internal Revenue Service can be expected to take issue with this."
Seems that some "scholarly" research and "logical" thought went into your post.
Can you help me understand how the Internal Revenue Service of the United States is concerned with or has any authority over sales taxes that are imposed by individual States and/or Territories?
the_mobile_store_36551
OP1 year agoRe IRS, it wants tax dollars, right? Does it want its tax inflows to be limited or diacouraged because of fees being charged on top of tax revenues?
Put another way, if ebay scares sellers away by lopping fees on top of taxes collected, ebay discourages transactions, thus lowering tax revenues....ALL BECAUSE EBAY WANTS TO MAKE PROFITS ON TAXES COLLECTED.
mam98031
·1 year ago@the_mobile_store_36551
Yes there is a resolution, it is just that you don't like it. There is a difference.
Ebay is a for profit company. Why should they no be paid for services rendered? Are you of the opinion that Ebay didn't spend any money developing the software to maintain sales taxes across the website and for each state. Not to mention having to maintain it with the 1,000's of counties within the states that change their sales tax all the item. Then the state to manage and keep everything rolling along the way it should. None of this is free and it all costs Ebay real money.
Not everything is a lawsuit, even when it is difficult to understand.
the_mobile_store_36551
OP1 year agoYou underestimate the ability of off the shelf bookkeeping software. Ebay doesn't have hundrrds of workers maintaining spreadsheets with individual transactions. Don't be so naive.
Do just a little bit of math and you'll see ebay's inflows for "tax collection" fees far exceed this administrative cost.
inhawaii
·1 year ago@the_mobile_store_36551
You remind me of every other seller who comes here once a week to announce they are suing ebay.
Good luck!
mam98031
·1 year agoDang you sure ASSUME a lot, don't you. I have no idea what brings you to that conclusion. Twisting what I said to meet your needs isn't helpful either. I said absolutely NOTHING about Ebay using "spreadsheets". But if you want to REALLY acknowledge what I said, was they had to WRITE programs that would plug into existing software with the ability to update as necessary as sales tax rates change regularly across the nation.
It would be helpful if you could find a way to step back for a moment, take a breath and put all that anger at Ebay aside so you can absorb what many very experienced seller are telling you here.
YOU likely need a little more respect and understanding that some off the shelf program was never written for sites as large as Ebay, Amazon, etc. Or the unique needs of these sites.
Not sure why you expect to be paid for services rendered as a seller but the site that allows your stuff to be seen around the world has no right to charge for their services. Rather myopic isn't it.
monica-sells
·1 year agothis........
"...Does this 'attorney' also plan on suing every processor that has processed credit cards since the 1940's for EVERY Brick & Mortar Store in the country since the time it takes to process 1 transaction is the exact same, (they get $82 to process that credit card for a $2500 TV yet only get 60c when processing a $21 sale for Toilet Paper)..."
couldn't explain it better myself
your argument holds no water...although you did sling around some official sounding phrases
the_mobile_store_36551
OP1 year agoBut they don't charge you profit on top of the taxes collected. Can you not see that?
bonjourami
·1 year agoWhy shouldnt they make a profit when they do all the work? As do all other major outlets that are collecting state taxes. At least you didnt scream 'illegal', so thank you for that!
the_mobile_store_36551
OP1 year agoHow much work does ebay really do? It's a stupid ad website. Their costs are primarily fixed.
mustang707
·1 year agoMake sure you also notify Walmart, Target, McDonald's, Home Depot and all companies that accept credit cards because those companies are also paying a fee on sales tax. It's what payment processors do.
the_mobile_store_36551
OP1 year agoNot apples and oranges. You misunderstood the intricacies involved.
farmalljr
·1 year agoTrue, PROCESSORS do charge that fee on the total. Not disagreeing. Does Wal-mart, Target, ect charge fees to buyers? Nope. Somehow I doubt these other platforms charge third party sellers, just the same as eBay in a typical transaction on their platform. Though since it's been forever since I have sold on Amazon, I can't really say.
Is eBay the credit card processor, or is Ayden? eBay is the "seller of record" right? As in not a payment processor.
It would be an interesting case to see to be heard in court, but since no links are provided to join or even track this "lawsuit", I doubt it ever materializes.
I doubt a lawsuit would gain traction, but the OP has a bit of a point here. Your fees are based on the total, that includes tax. But no processor I am aware of, charges what eBay does for processing.
mam98031
·1 year ago@farmalljr
Credit card processing on Ebay works very similar to how it did when we used PayPal. Neither Ebay nor Paypal are banks, so they have a bank they use to process the credit card payments.
farmalljr
·1 year agoSeveral events have changed. 1 being the requirement to even collect sales tax. Back then, not required or done. 2 Sales tax was treated as a separate line item when they first started collecting it, not charged the same fees.
When eBay switched to Ayden, that's when sales taxes were fee'd the same. Before if Paypal collected it, it was only the paypal fee, which was lower than FVF's. There were several posts about how the new fees were now being collected for sales tax, adding even more fees seller's were not paying before. Lots of people were upset then, and all this time later, people are still honked off. Again, I would honestly like to see some kind of court case, to at least make it either lawful to do, or not. Everyone agrees that PROCESSING fees on sales tax are normal and legal. No one has challenged yet if FVF AND processing fees are legal. Because at eBay's scale, it adds up to a lot of money. It's a huge windfall of cash that either is a profit center for a business, or unfair and illegal fees for third party sellers.
mam98031
·1 year ago@farmalljr
Several events have changed. 1 being the requirement to even collect sales tax. Back then, not required or done. 2 Sales tax was treated as a separate line item when they first started collecting it, not charged the same fees.
First ALL I said was how credit card payments are processed back when PayPal was our processor and now that Ebay is our processor. I did not go any further with a comment to your earlier post.
With that said, States started passing their MFLs [Marketplace Facilitator Laws] in 2019. The first state was effective January of 2019. As the year progressed more and more states passed their MFLs. Paypal was the Money Processor for most sellers until Managed Payments went site wide.
The onboarding of all those sellers started in July of 2020 and was substantially complete by the end of 2021. But before all those sellers were onboarded, PayPal continued to be their money processor.
Before a seller entered Managed Payments, Ebay did NOT charge ANY fee on sales tax paid by the buyer. But once the seller enter Managed Payments is when the fee on the entire transaction started, to include sales tax.
mam98031
·1 year ago@farmalljr
When eBay switched to Ayden, that's when sales taxes were fee'd the same. Before if Paypal collected it, it was only the paypal fee, which was lower than FVF's. There were several posts about how the new fees were now being collected for sales tax, adding even more fees seller's were not paying before. Lots of people were upset then, and all this time later, people are still honked off. Again, I would honestly like to see some kind of court case, to at least make it either lawful to do, or not. Everyone agrees that PROCESSING fees on sales tax are normal and legal. No one has challenged yet if FVF AND processing fees are legal. Because at eBay's scale, it adds up to a lot of money. It's a huge windfall of cash that either is a profit center for a business, or unfair and illegal fees for third party sellers.
Ebay did NOT "switch" to Adyen. Ebay became the Money Processor instead of PayPal. Neither Ebay or Paypal are banks, so BOTH require a bank to do their actual money processing. Ebay uses Adyen and PayPal I believe now uses Synchrony Bank. So while you always try to make the two money processors seem different, their basic set ups are the same.
YES, once sellers entered MP, then fees were charged on the entire amount received from the buyer. BEFORE sellers entered MP, sales tax was still required for certain states and Ebay did NOT charge ANY fees on sales tax, but PayPal did as they were the money processor.
The remedy for any seller that doesn't want to pay these fees is simple, they don't have to sell on this site. It isn't more complicated than that, nor should it be.
"Everyone agrees that PROCESSING fees on sales tax are normal and legal." So you now speak for everyone??? What law are they breaking. I know I've asked you that before, but you never have answered that question. And how do you know that "no one" has challenged it? Where are you getting your information? You certainly don't speak for me.
I realize that some are of the opinion that it doesn't cost Ebay anything to collect, remit and manage sales tax, but they are just mistaken. It has a cost to the site.
With all that said. I don't like having a FVF on sales tax anymore than anyone else does. But Ebay is not breaking some unidentified law. I do wish Ebay would get more in line with what other sites do. I'm not defending what Ebay does but rather trying to explain how it actually works.
mustang707
·1 year ago@farmalljr The big corporations do not directly charge that fee to buyers but it does become an expense that is added to all the other operating expenses which ultimately gets passed on to consumers. There are smaller businesses who do pass on the processing fee directly to buyers either by directly assessing the fee or using a "discount if paid with cash" option.
farmalljr
·1 year agoTrue, but the issue at hand is not if somehow someone is paying the fee. I too pass along processing fees to my clients who choose to pay by card, and they know it upfront. It's a straight 3%.
But what we are talking about is a unique situation here. The total of fees are charged on the sales tax, not a "processing" fee of 3% or so that is typical. That fee on sales tax can be from the lowest fee eBay charges (12% or so right?) up to however much someone may use promotions at or at minimum the category fee. That's quite different than the standard 3% or so anyone else charges. If you promote at 10%, you pay an additional 10% fee on sales tax, that someone who does not promote, does not pay.
If you typically pay in the neighborhood of 20% to sell here, you are paying a 20% processing fee on sales tax. No other card processor is charging a 20% fee to process the sale or sales tax. As far as I know, eBay is the only place that is doing that. I can see charging 3-5% on just the sales tax portion. but it's a windfall for anyone getting 20% to process sales tax, a HUGE windfall, especially on the scale that eBay is processing sales tax. It might be small on the individual sale scale. But when you are moving billions of dollars, it's very significant. As in multiple millions of dollars, scale. This also says nothing about the percent of sales tax collected, they let eBay keep from each state. Most states allow a collector at this scale to keep a small percent of the sales tax collected.
theteamsetguy
·1 year ago@farmalljr ,
If I recall right eBay has said they went with same rate for the whole transaction route instead of charging a different FVF on product/shipping and a different one sales for simplicity. Would you prefer 10.5% FVF on item/shipping and 2.9% on taxes? Based on the some of the postings on this board many sellers can’t even figure out what what their fees are now.
Before managed payments eBay charged 10% FVF in most categories and PayPal charged 2.9% for a total of 12.9% plus 30 cent swipe fee. PayPal charged their fee on the total transaction including taxes. For top rated plus sellers like myself at that time I pay less in FVF because of the 10% discount. Top rated plus sellers currently pay 11.61% instead of 12.9%.
farmalljr
·1 year agoA few things here... You don't pay less in fees then you did then. The whole structure of fees has changed. It is slightly more, but the way sellers pay fees now is simplified. Taxes did not use to be under the FVF and were only charged a processing fee. This has been done by any other processor for forever, and it's normal and legal. I'm not complaining how much eBay charges for FVF's, I see the point however, that many sellers have stated about charging FVF's on sales tax itself.
Honestly, I don't think they should be collecting FVF's on sales tax. A reasonable and normal processing fee? Sure. This is an industry standard and anyone who processes card payments, pays the fee on the total of the sale, including sales tax. I have never heard of ANY business paying fees of 10-15-20% to process payments. Sales tax is a taxation tool of the states and local municipalities. Retailers are collecting that tax, and remitting it to the state. I know of no state that allows retailers to charge "FVF's" on that tax collection. Even local auction houses who charge buyer fees, are not charging them on tax, only the items bought. If they charge a fee for cards (all of them do) then that's the only fee on sales taxes.
IMO, this is akin to someone collecting taxes they do not pay to the state. A 10% tax turns into a 12% tax. And it's not even the buyer in this case that pays it, it's the seller. Can you imagine if states directed sellers to collect 7% from buyers, but charged them 9%? This is similar to what is happening. All sellers would expect to pay a small fee overall for processing, but the fees here are over the top excessive compared to any other business. If you as a business charged buyers a higher sales tax rate then was required, that would lead to legal problems. This is the same thing.
Again, I would like to see a case like this played out in court. There needs to be clarity on the situation. eBay is doing it, but I know of no other business that is. Sure seem like on the surface, it's not legal and a LOT of money would be owed to sellers if it were in fact illegal. Might be a multiple million dollar mistake.
youn2240
·1 year agoI have a theory that between ebay and the payment processors such as visa and mastercard and banks. That they more than likely have a legal team that follows the law to the best of their advantage. but maybe not take em to court and find out.
mam98031
·1 year ago@farmalljr
You are correct with this statement "... I don't think they should be collecting FVF's on sales tax". Other sites don't do this, but Ebay does. In fact sites such as Etsy and Amazon don't charge any fees on sales tax. But Ebay is the only site I know of that charges their FVF on sales tax. Instead of a much smaller fee on the sales tax and then their FVF on the sale price of the product to include shipping.
As I explained in my earlier post, Ebay went to a Simplified Fee in August of 2020. That was one fee plus the transaction fixed fee for sales on Ebay. That Simplified fee was inclusive of the product sale, shipping and sales tax.
Still NOT illegal. And no one, to include you has ever provided a law that shows they are doing something illegal, even when asked to support your position.
theteamsetguy
·1 year ago@mustang707 ,
I’m starting to see more and more mom and pop restaurants charge 3.99% extra when using a credit card.
monica-sells
·1 year agowhich....according to the OP's logic/argument, means the mom & pop store is illegally making a "profit" off the sales tax portion of the "fee" when the processing rate is 3% (not 3.9%, resulting in a "profit" of .9%)...
theteamsetguy
·1 year ago@monica-sells ,
They charge more not to profit but recoup the credit card processing fees for the sales tax and tips.
mam98031
·1 year ago@theteamsetguy
This is exactly what the problem is for most that object to this. They don't understand that Ebay actually has COSTS, real costs to providing this service for states. Either that or they think that the computers just magically creates the software, updates it as necessary and no human intervention is necessary. When Ebay was originally required by law to collect and remit taxes, someone waved their magic wand and their computers had software loaded to their system that was compatible with Ebay's large. Any updates are handled the same way.
IDK why some think this service doesn't cost anything. It isn't logical and certainly not based in facts.
kensgiftshop
·1 year agoWhen I go pay for a car tag or pay my property tax and use my debit card, I'm charged extra for using it.
monica-sells
·1 year agoanother perfect example of why this class action has no teeth....
(surprised i forgot about such an obvious one because i just paid taxes)
according to the OP's logic, you can't collect a fee for paying taxes.....
I was just charged a 'convenience fee' to pay my property taxes
somebody is making a 'profit' of me paying taxes
kensgiftshop
·1 year agoSome places are doing anything they can to make a little extra money.
When I bought the car tag, there was a notary fee included, when there wasn't anything notarized.
Also charged an insurance verification fee. Car is blacked tagged so no insurance needed. I guess I had to pay the verification fee because she ask me if there was insurance on it.
stainlessenginecovers
·1 year agoSo are you the hired expert on how much a company should charge to keep track of and remit 14000 sales tax reports per year? (3600 counties 4 times a year)?
Does this 'attorney' also plan on suing every processor that has processed credit cards since the 1940's for EVERY Brick & Mortar Store in the country since the time it takes to process 1 transaction is the exact same, (they get $82 to process that credit card for a $2500 TV yet only get 60c when processing a $21 sale for Toilet Paper)
This company can charge you 400% of the total sale including anyone that sells something within 1000 miles of you within a 24 hour period.
They are private, they may not get any customers, but they can 'charge' as they see fit and since CC processors have been charging on the 'Total' a customer pays since the advent of the charge card....
the_mobile_store_36551
OP1 year agoWhen you charge profit on, and under the guise of, tax collections, things can get hairy.
mam98031
·1 year agoThat is likely the answer to your own question. You ASSUME the fee Ebay charges on Sales Tax that is collected and remitted to the appropriate states is ALL profit because you refuse to recognize the costs they have in this process. Your refusal to acknowledge that doesn't make it non existent, it just means you don't want to see the other side of the coin.
Ebay is a for profit company. Why should they no be paid for services rendered? Are you of the opinion that Ebay didn't spend any money developing the software to maintain sales taxes across the website and for each state. Not to mention having to maintain it with the 1,000's of counties within the states that change their sales tax all the item. Then the state to manage and keep everything rolling along the way it should. None of this is free and it all costs Ebay real money.
You ASSUME their Processing Fees are all profit as if it costs nothing to keep the lights on and run this site.
stainlessenginecovers
·1 year agoThere's no 'GUISE' about it. They charge on the Total.
But, I see you could not/would not comment on the rest of what I said as you must know it's true and you are barking up a cactus that has no branches.
bashort
·1 year agovery simple, they do it because they can
the_mobile_store_36551
OP1 year agoSo true. Until it costs them.