eBay commits tax fraud against Washington consumers

[direwolf]

Washington State Law requires internet retailers to charge sales tax at the same rate as your local tax rate. For residents of unincorporated Snohomish County, this rate is 7.8%.

eBay charges all Washington residents 10.4% - the highest rate in WA. They will not respond to complaints, they will not refund your money, and neither will their partners in crime - PayPal. The good news is that you can apply for a refund via the Dept. of Revenue: https://dor.wa.gov/file-pay-taxes/apply-tax-refund. I'll follow up to this post & let you know if it works.

Another thing you can do is contact your financial institution and file the proper form for overcharges. (This is legit: You agreed to pay sales tax, you did not agree to OVERPAY sales tax) The good news here is that your bank won't do a partial refund, they'll give you the entire sales tax charge back. I got a refund of $75 on a large purchase - where I was only overcharged about $20. This time, eBay's refusal to respond worked in my favor, but your mileage may vary.

This is tax fraud; it's a felony but so far neither the Department of Revenue or the Attorney General has done anything about it. It's up to we-the-people to take action. File the form above, complain to the AGO: https://fortress.wa.gov/atg/formhandler/ago/ComplaintForm.aspx, complain to the DOR: https://dor.wa.gov/contact-us/reporting-washington-state-tax-and-license-fraud alert your neighbors and kindly repost this on Facebook, etc (I don't Facebook)

Longer story: I called eBay's "help" line on this, they said someone from their tax department would call back within 24 hours. (They didn't - no surprise) I've repeatedly written to their tax email address US_sales_tax@ebay.com - no response or surprise there, either.

I complained to the Washington AGO, and eBay's response was, "We're just a poor little website, and we don't understand all these complicated tax laws." uh, yeah, right. I'll bet they have it all figured out by the time they remit those taxes. Even if they do hand over all their ill-gotten gains, they've still collected interest in the interim.

PayPal is the entity that actually steals the money from your account. Complaining to them is a trip to Bizzaro World. Their responses range from "We investigated and determined that you were not billed twice for the same item" (Wha-a-a-a?) to explaining how sales tax works (I already know that) to flat out pretending not to understand what the complaint is about.

Note that if you complain to PayPal, they will contact the seller rather than eBay. It's not the seller's fault, and I suspect they know it. I always make sure to contact the seller and explain the situation beforehand. Their TOS says they'll investigate - but after dozens of interactions, they've never once contacted eBay about it. And why would they? They're profiting from Tax Fraud and they believe they're above the law. So long as the people and the authorities let them get away with it, they'll be right.

[7606dennis]

I'm not sure but I think you legislature set it up that Market Facilitators have a set rate they are suppose to collect instead of the rate that would apply to individual taxing districts within the state.  You will probably be able to get more precise information from your department of revenue or your state representative's office.

By the way, it is possible that some Washington buyers have been guilty of failing to pay their use tax  on sales delivered within the state from out of state.  I believe it is this that had a big influence on the passing of the MF law by Washington's legislature.

[mudshark61369]

@direwolf,

7606dennis is right it is the state who decided on a fixed rate tax for internet sales, not ebay.  If you ask me the fraud is in the rate being set as high as it was, without a vote of the people.  After all you may buy something from a seller in the same tax district, who does not allow local pick up, but you end up paying the highest rate.  Then you have to apply for the credit when filling out your taxes.

[direwolf]

Mudshark & Dennis-

Here's a link to the WA DOR site:

https://dor.wa.gov/find-taxes-rates/retail-sales-tax/marketplace-fairness-leveling-playing-field/rem...

Under the heading "Collecting retail sales tax," it explicitly states, "You must collect sales/use tax based on the delivery location " (emphasis mine)  Moreover, I've recently received confirmation from the DOR itself in regard to this matter, confirming that my rate is 7.8%.

[7606dennis]

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@direwolf wrote:

Mudshark & Dennis-

Here's a link to the WA DOR site:

https://dor.wa.gov/find-taxes-rates/retail-sales-tax/marketplace-fairness-leveling-playing-field/rem...

Under the heading "Collecting retail sales tax," it explicitly states, "You must collect sales/use tax based on the delivery location " (emphasis mine)  Moreover, I've recently received confirmation from the DOR itself in regard to this matter, confirming that my rate is 7.8%.

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It will probably take some time to review the information that you provided from your link.  As with most things dealing with taxes and governmental agencies, it is as clear as mud.

Following some of the other links in the site's data I came across this one regarding use tax.

https://dor.wa.gov/find-taxes-rates/retail-sales-tax/consumer-use-tax-marketplace-purchases

I found it interesting that they seem to still have certain times when use tax could still be applicable even with the Marketplace Facilitator law in place.

I also noticed that on July 1, 2019 there are scheduled changes but they aren't going to update the site regarding those until that date.  Interesting!  Apparently Washington State politicians are closer to Illinois politicians than I realized.

Regarding what you consider to be fraud on the part of eBay regarding their compliance with Washington State's MF law, perhaps you need to contact the state's Attorney General and file a complaint.  That would probably get the ball rolling toward a court ruling regarding the state's MF law correct implementation.

[mudshark61369]

@direwolf, @7606dennis ,

I find it interesting that in the laws you do find the quote DW posted  "You must collect sales/use tax based on the delivery location"  but in the section instructing sellers on how to collect the taxes based on the delivery location is not mentioned that I could find. Though by the time I got to it, I was starting to go cross eyed.   I'm sure someone working on creating the legislation probably suggested setting up a program that would allow the tax rate on internet based purchases to be adjusted by zip code, so those in an area with a lower rate, would not have to overpay. They were probably shouted down by the tax and spend members of the committee.  

direwolf,

I would use the contact info on the site to find out if you are due a refund for the difference in the rate collected and what you should have paid based on your location, when you file taxes.

[direwolf]

@mudshark61369

Google is your friend.  There are plenty of resources available for sellers, including lookup tables and Web APIs.

[alicensedcontractor]

I hate eBay doing this. TBH I have started doing more biz at Amazon. At least they charge me my local tax rate. The worst part is when they charge me the large Seattle tax rate using the Seattle location code, that means that they reporting to the WA State DOR that local rate, (the amount OVER the State's flat 6.5%) that is supposed to be going to towards my local city and county by using my actual location code to support my local services, eBay is telling WA State it goes toward the Seattle location codes. I didn't even get a vote or have a say on those local sales tax rates because my vote only counts towards my city I live in.

[7606dennis]

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@alicensedcontractor wrote:
I hate eBay doing this. TBH I have started doing more biz at Amazon. At least they charge me my local tax rate. The worst part is when they charge me the large Seattle tax rate using the Seattle location code, that means that they reporting to the WA State DOR that local rate, (the amount OVER the State's flat 6.5%) that is supposed to be going to towards my local city and county by using my actual location code to support my local services, eBay is telling WA State it goes toward the Seattle location codes. I didn't even get a vote or have a say on those local sales tax rates because my vote only counts towards my city I live in.

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Frankly, I don't get to vote on my local tax millage either.  I do make it a point to vote in every election including those for seats on my city and county commissions.  I also attend commission meetings and voice my opinion when something I feel strongly about is on the agenda.  

I'm not sure exactly what Washington State's law regarding MF tax collections state.  If you feel that eBay is not complying with it correctly, I would advise you to address the issue with your state's department that oversees the collection of the state's taxes.  I'm sure that they would want to know if things are not being done according to their regulations.

[berserkerplanet]

I'm sure eBay and Washington State were in communication working out the details of the implementation, and it's likely this could be an implementation compromise they came to an agreement on.

[7606dennis]

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@berserkerplanet wrote:
I'm sure eBay and Washington State were in communication working out the details of the implementation, and it's likely this could be an implementation compromise they came to an agreement on.

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I tend to agree, since it would cover all the varied local taxing entities and probably allow for some compensation to eBay and the other market facilitators for the handling of the collection.  After all, most states allow an amount to be kept by merchants as compensation for their work in collecting and remitting of sales tax.