eBay

thehonorabletrader · ‎11-05-2019

I have seen many posts where people are upset about not knowing there will be sales tax and what the amount is until the checkout screen. There is a very good and very logical reason for this...

Sales Tax is calculated by your SHIPPING address. Not your account address, not your return address, and no other addresses on file. I know many people that have a registration address in a different state or area than their checkout address. I also know many people that purchase gifts for others on eBay and have them sent directly to the person receiving the gift.

Since the tax is based on the shipping address, eBay doesn't know with any certainty the shipping address on a specific transaction until the checkout screen.

Remember, if you "commit to buy" something you are committing to the purchase price and the shipping. You have already committed to the sales tax based solely on where you live. You don't have control over that and not following through with a transaction because the sales tax is not a valid cancellation reason as the seller nor eBay has control over where you choose to live or what taxes your state chooses to charge.

I just wanted to provide some context....

mudshark61369 · ‎11-06-2019

@thehonorabletrader,

Your explanation does make sense and it is so simple. Proof that sometimes we can't see the trees through the forest. Unfortunately, we're looking into a jungle.

If what you wrote is true, explain why I bought an item a few weeks ago, as a gift for my sister, from my state which doesn't charge a sales tax yet,then had it shipped to my sister in a state that does charge a sales tax, but there was no tax on the purchase.

Tax facilitators do apply taxes based on the buyer's location, not on the shipping address. Taxes are assessed based on where the financial transaction took place, not where an item is being delivered.

"THERE IS NO SUCH THING AS FOOLPROOF, BECAUSE FOOLS ARE SO DARNED INGENIOUS!" (unknown)

mudshark61369 · ‎11-06-2019

@thehonorabletrader,

I meant to add this to my last post. Many have asked why ebay does not display the tax up front, when other companies do? The only explanation I have been able to come up with is that eBay let them selves get caught behind the 8 ball. They didn't start developing a program that could display the tax when a member looked at an item based on state, county etc., when the Supreme Court made its ruling, and now they are playing catch up, and because some states apply taxes beyond their base tax, or after a certain amount of selling is done by a seller. They have a job ahead of them.

We've heard from members who live in states that have a base sales tax, but allow Counties and Municipalities to add to the base tax. If a member lives in one of those states, but not in an area that has an added tax, they often end up paying the higher rate. Supposedly, if they use a + 4 zip code they do not get charged the added tax. Not living in a state that charges a sales tax, I cannot say for sure if that is true or not.

"THERE IS NO SUCH THING AS FOOLPROOF, BECAUSE FOOLS ARE SO DARNED INGENIOUS!" (unknown)

thehonorabletrader · ‎11-06-2019

@mudshark61369 wrote:
@thehonorabletrader,

I meant to add this to my last post. Many have asked why ebay does not display the tax up front, when other companies do? The only explanation I have been able to come up with is that eBay let them selves get caught behind the 8 ball. They didn't start developing a program that could display the tax when a member looked at an item based on state, county etc., when the Supreme Court made its ruling, and now they are playing catch up, and because some states apply taxes beyond their base tax, or after a certain amount of selling is done by a seller. They have a job ahead of them.

We've heard from members who live in states that have a base sales tax, but allow Counties and Municipalities to add to the base tax. If a member lives in one of those states, but not in an area that has an added tax, they often end up paying the higher rate. Supposedly, if they use a + 4 zip code they do not get charged the added tax. Not living in a state that charges a sales tax, I cannot say for sure if that is true or not.

The laws that run local sales tax are not the same laws for these states that run online sales tax. These states are making the laws, and they decide what tax will be charged on what items based on what criteria. Some states even exempt certain categories so that there are no taxes on certain items such as food items (My state for example).

There is no uniform 1 size fits all law for online sales tax. It is 37 different laws that were created independently of each other with not very much in common. This is something brand new to the world of eCommerce. In the past the local sales tax law was all the sellers and eBay had to worry about.

eBay is the one on the hook if the taxes are properly collected and remitted. So I am sure their high priced attorneys and accountants have helped them set up this program in a way to reduce their liability and insure they are following the laws.

I have read many posts where people post a link to a local sales tax law and say "my state collects this percentage or in this manner and eBay is doing it wrong" only to find a more recently passed law showing that what eBay is doing is absolutely correct. Some states charge more sales tax in certain categories just like some charge fewer sales tax in certain categories.

If someone is truly concerned they need to read the actual law in their state or go back to their local state representatives and bring it to their attention that perhaps eBay is not doing something right.

Basically standing in front of a brick wall and yelling at the wall isn't going to get the wall to change itself. People need to do their research for their specific law in their specific state instead of trying to do broad one-size-fits-all research.

manchez · ‎11-06-2019

Really not sure the advantage of buying items on Ebay now that the buyer has to pay the purchase tax? Why would i not go to a brink and mortar store to make my purchases if they both are charging tax now, AND i don't have to pay shipping?

Ebay will lose a TON of business by doing this.

7606dennis · ‎11-06-2019

@manchez wrote:
Really not sure the advantage of buying items on Ebay now that the buyer has to pay the purchase tax? Why would i not go to a brink and mortar store to make my purchases if they both are charging tax now, AND i don't have to pay shipping?
Ebay will lose a TON of business by doing this.

Actually, there are a lot of reasons to shop online as opposed to going into a brick & mortar store for everything. However, not having to pay sales tax on purchases has never been one of them. Buyers having their online purchases delivered to them in a state that has sales/use tax laws on the books have always been subject to the tax and were suppose to have been paying it themselves to the state all along.

I agree that if the item is available locally at a reasonable price, it is foolish to pay shipping. However, sales tax shouldn't be a factor.

"It is an intelligent man that is aware of his own ignorance."

lacemaker3 · ‎11-06-2019

@mudshark61369, I have tested the sales tax calculator with many different items, and with shipping addresses in many states.

eBay consistently charged the appropriate sales tax for the shipping address, in spite of the fact that my registered address and default shipping address were never changed. I could change the shipping address on the checkout page, and see the sales tax changing, it was always the rate for the shipping address that was in place at the time. Not based on my registered address or default shipping address (which is in a state where eBay is not currently collecting sales tax).

Once I had "chosen" a shipping address, eBay continued to use it for the rest of that session, until I changed it again. So if a buyer is searching with the correct shipping address they intend to use, then they will see the correct sales tax when they put an item into the cart and view the checkout page to see what the sales tax is.

I did see the rate changing sometimes based on the 5-digit zip code versus the zip+4. A zip code covers a large area and may include several municipal organizations (towns, cities, townships), so there may be different sales tax rates within a single zip code. However a zip+4 includes only a few houses/buildings. Usually less than ten houses side by side, sometimes just one house. So the zip+4 will zero-in very closely on the location, and allows the sales tax rate to be determined accurately.

thehonorabletrader · ‎11-07-2019

@manchez wrote:
Really not sure the advantage of buying items on Ebay now that the buyer has to pay the purchase tax? Why would i not go to a brink and mortar store to make my purchases if they both are charging tax now, AND i don't have to pay shipping?
Ebay will lose a TON of business by doing this.

@manchezare you saying eBay should not be following the laws these states are creating?

eBay is not doing this by their own choice

eBay has petitioned against this

This is because of a Supreme Court Ruling last year

If eBay or Amazon or Etsy or any other service does NOT do this, then they can be fined or worse yet they could be blocked from doing business in a specific state.

Also, I want to point out that you as a buyer have always been legally required to pay sales tax for items you purchase online. Every state that has a sales tax has laws that require buyers to account for their online purchases when filing their end of year tax returns. My state was one of them. However many buyers were not doing this and there really isn't a way to audit and enforce it. This is why South Dakota started requiring Wayfair to charge sales tax for anybody in its state....which lead to a court battle....which leads to the Supreme Court stating that a state can dictate laws for businesses that are not physically located in their state but that does business with citizens of that state.

To recap, you say eBay is going to lose a lot of business. Knowing that this is not unique to eBay, I assume you mean many online retailers are going to lose a lot of business. Then I assume you mean that to say "well since now I can no longer evade my sales tax, I am just going to buy locally".

Or am I not understanding your comment correctly?

tt455 · ‎11-07-2019

I agree, why should I buy on ebay if I have to pay shipping and sales tax? I'll go buy new, pay the tax and I know it won't be damaged in shipping. Why am I paying tax on 50 year old parts or any antique when they have been taxed already? I mean I understand the tax laws, but I might as well stick to craigslist and swap meets. Also if you BIN it will show you how much tax before you commit to buy. I know it's not ebay, but it will hurt retailers somewhat.

7606dennis · ‎11-07-2019

@tt455 wrote:
I agree, why should I buy on ebay if I have to pay shipping and sales tax? I'll go buy new, pay the tax and I know it won't be damaged in shipping. Why am I paying tax on 50 year old parts or any antique when they have been taxed already? I mean I understand the tax laws, but I might as well stick to craigslist and swap meets. Also if you BIN it will show you how much tax before you commit to buy. I know it's not ebay, but it will hurt retailers somewhat.

Why are you "paying tax on 50 year old parts or any antique...?" Probably because your state legislature levied a sales/use tax at some point and deems them to be taxable. I'm sure that there are many antique collectors out there that wish it were otherwise.

With regard to Craigslist and swap meets, I do believe that if the seller doesn't collect sales tax at the time of the sale, you are required to pay it in the form of use tax to your state yourself. Of since you understand the tax laws you are probably more familiar with your local statutes than I.

"It is an intelligent man that is aware of his own ignorance."

netlumens · ‎11-08-2019

I came from another sales tax thread and can only partially agree with you. What you stated is simply the result of what ebay is unwilling to provide at the current stage.

Ebay can easily address this issue by letting you put in the "Intended ship to" address at the Shipping Detail area and display the amount of tax to be collected based on the BIN price or current bid price, including shipping, and display it as your final total for reference. Then of course ebay can let you put a default shipping address in your profile and since you have to login to bid, use it as the default for tax calculation purpose and let you override in the "Intended ship to" address if you are to ship to a different place. Given that said, ebay has well published all the states that they are collecting sales tax for and the buyer should be aware of their local sales tax and factor it in to their bidding price. It is now a fact that whether you buy from ebay or amazon or any online market facilitator, sales tax will be collected, no exception. Unless you are buying directly from a vendor that is not required to collect your state sales tax, don't even think otherwise.

Why are people still buying from ebay, amazon or other online market facilitors? Because not everyone lives in a metro area that have access to big retailers and brick and mortar stores. Then odd/special/limited editions/vintage and etc things that you don't find locally and maybe someone has it for sale hundreds of miles from you. Then those who just want to buy used items to save some bucks. Then those who are too lazy to go shopping and want everything delivered to their door. Many many other reasons.

While many have been escaping sales tax by shopping out of state, that technically does not relieve you from your tax liability. You just choose to break your tax law. The states are now doing catch up.

Winners, losers, gainers? IMO, buyers who live in sales tax free states are the winners. The have a bidding advantage because they don't have to factor in sales tax in their final cost. Losers are the sellers because most bidders (who are outside of the 5 sales tax states) are likely going to place a lower bid because they have to factor in sales tax as their final cost. Gainers are obviously the state government because they are recouping a very large amount of sales tax they people have escaped.