eBay is charging residents of PA sales tax on non-taxable items.

[lateforbingo]

I live in Pennsylvania and just purchased a hat today. When the seller sent me the invoice I was charged tax. The thing is PA does not charge sales tax on clothing. I can go to the mall and buy a baseball hat and there is no tax. I can order a hat online from any retailer and no tax. How do I get this fixed? 

[7606dennis]

Have you called eBay customer service about it?  Since eBay recently has begun to collect sales tax as required under that state's market facilitator law, it is possible that they haven't gotten all of the non-taxable items programmed into their system. 

Frankly, I'm wondering what they are going to do with things like temporary no tax days on certain items like my state runs at times. 

Of course, you may need to file a claim with your state's taxing authority to get your overpaid taxes back.

[pburn]

You can contact your state's Department of Revenue to determine what documentation is required for a refund of sales tax paid in error.

https://www.revenue.pa.gov/Pages/default.aspx

[soh.maryl]

Thanks, Dennis, for bringing up the topic of "no tax days".

Ohio, also, has, for the past several years, offered an entire weekend in August when school supplies and clothing can be purchased without charging state sales tax.  As a grandma and great grandma, I often use that time to help the children when I can with crayons, notebooks etc.  I hope eBay can figure out how to not charge state sales tax at that time.  

[mudshark61369]

@lateforbingo,

  "When the seller sent me the invoice I was charged tax. The thing is PA does not charge sales tax on clothing".

Maybe the state the seller is located in is charging the sales tax. The following is a quote from eBay's current sales tax policies.

"If your shipping address isn’t in one of the marketplace responsibility states, but the seller has a responsibility to charge sales tax, the applicable taxes will be included at checkout".  eBay's policy which includes the quote, is in the link below

https://www.ebay.com/help/buying/paying-items/paying-tax-ebay-purchases?id=4771

What pburn & 7606dennis wrote about possibly being able to deduct the taxes later on may work, but not if the seller's state is the one charging the tax.  The Market Place tax responsibility is causing the Facilitators (eBay and other sites) fits. Each state that starts collecting taxes has its own tax code including which items are exempt. 

[computeraidllc]

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@mudshark61369 wrote:

@lateforbingo,

  "When the seller sent me the invoice I was charged tax. The thing is PA does not charge sales tax on clothing".

Maybe the state the seller is located in is charging the sales tax. The following is a quote from eBay's current sales tax policies.

"If your shipping address isn’t in one of the marketplace responsibility states, but the seller has a responsibility to charge sales tax, the applicable taxes will be included at checkout".  eBay's policy which includes the quote, is in the link below

https://www.ebay.com/help/buying/paying-items/paying-tax-ebay-purchases?id=4771

What pburn & 7606dennis wrote about possibly being able to deduct the taxes later on may work, but not if the seller's state is the one charging the tax.  The Market Place tax responsibility is causing the Facilitators (eBay and other sites) fits. Each state that starts collecting taxes has its own tax code including which items are exempt. 

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Currently eBay is collecting tax for PA. I would contact them to let them know that clothing isn't taxed in this state. New York it is more complected as there is no state sales tax on clothing that costs less than $110 but many counties have their local tax on clothing. It is something eBay needs to deal with this special category because many states have clothing not taxed or at a different tax rate. Clothing tax is also called a garment tax. Another category that will give ebay trouble is food. It is even more complicated then clothing because some food is and some isn't depending on what is in the item.

[mudshark61369]

@computeraidllc,

Did you read the quote in my last post about the tax possibly being seller's state charging sales tax?  

  "Currently eBay is collecting tax for PA. I would contact them to let them know that clothing isn't taxed in this state. New York it is more complected as there is no state sales tax on clothing that costs less than $110 but many counties have their local tax on clothing. It is something eBay needs to deal with this special category because many states have clothing not taxed or at a different tax rate".

Some of the states also have the state's sales tax, and taxes levied by counties or communities. Some have authorized the Market Place Facilitators to collect the highest total rate even for people who do not have a local sales tax. 

The states themselves have to authorize eBay NOT to collect taxes on certain items that are exempt, or at a lower rate. If they do not eBay cannot unilaterally make the change. Each state has its own code and tax rates, and they can be confusing as most people know. I'm sure all of the Marketplace Facilitators are having issues with what items are taxed and how much they have to collect and at what rate.

Let's face it is in each State's best interest to collect taxes even when items are exempt, or the rate could be lower. So they aren't in any hurry to lower the income stream.  Trying to get politicians to repeal a source of tax revenue, is like trying to get blood out of a rock. They always seem to forget it is OUR money they are dealing with. 

[pburn]

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@mudshark61369 wrote:

What pburn & 7606dennis wrote about possibly being able to deduct the taxes later on may work, but not if the seller's state is the one charging the tax.  The Market Place tax responsibility is causing the Facilitators (eBay and other sites) fits. Each state that starts collecting taxes has its own tax code including which items are exempt. 

---

I spent some time on PA's DoR site reading FAQs and whatnot. It looks like PA has a form to complete and submit if a PA citizen feels s/he paid sales tax on exempt items.

This has to be a nightmare for a lot of online retailers that sell diverse items. Looking through just PA's list of exempt items, it is incredibly complicated. I don't know how a marketplace facilitator would ever program the assignment of sales tax to the myriad of products sellers offer on a website like eBay.

https://www.revenue.pa.gov/FormsandPublications/FormsforBusinesses/SUT/Documents/rev-717.pdf

To be clear, I don't advocate any entity collecting and remitting tax on items that are exempt from sales tax in any given member's state. 

[the*dog*ate*my*tablecloth]

I read on a State DOR site the other day (cannot remember which one) that a bunch of the States are participating in a tax streamlining program that makes tax function the same way across multiple States. Hopefully we'll start to hear more about this because it seems Ebay is reluctant to share the details of how their tax handling works.

[lovett-1000]

Yes you are so right. I think it is the State they live in they are collecting taxes for.  That is crazy E Bay could never get it right.  To distinguish items one by one to see if a Tax applied to it.  It is getting worst. And very hard for online trade. So many States charging their residents tax for anything they buy online. Then the State that the seller lives in now is wanting some Tax.  Thinking of Double Tax and the worst part about it is. Postage that is already high. Is every State that dose the Tax.  Its there Gravy Train.  E bay better keep all there ducks in a row when it comes to the Tax.  Just hope they enjoy it. They say its gonna give us better roads.  Well if that's the case before its all done. Georgia sure needs to cash in. Because where I live lots of pot holes. Still lots of dirt roads. Will knock your car out of aliment if you are not careful in places.  In my County  politicians are trying to push a large Trash dump on us. Say they gonna fix the roads. All we have to do is agree to except trash from 12 other Counties.  I say the roads are not worth the trash.   And agree with you all this tax tax tax is wrong. 

[computeraidllc]

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@mudshark61369 wrote:

@computeraidllc,

Did you read the quote in my last post about the tax possibly being seller's state charging sales tax?  

  "Currently eBay is collecting tax for PA. I would contact them to let them know that clothing isn't taxed in this state. New York it is more complected as there is no state sales tax on clothing that costs less than $110 but many counties have their local tax on clothing. It is something eBay needs to deal with this special category because many states have clothing not taxed or at a different tax rate".

Some of the states also have the state's sales tax, and taxes levied by counties or communities. Some have authorized the Market Place Facilitators to collect the highest total rate even for people who do not have a local sales tax. 

The states themselves have to authorize eBay NOT to collect taxes on certain items that are exempt, or at a lower rate. If they do not eBay cannot unilaterally make the change. Each state has its own code and tax rates, and they can be confusing as most people know. I'm sure all of the Marketplace Facilitators are having issues with what items are taxed and how much they have to collect and at what rate.

Let's face it is in each State's best interest to collect taxes even when items are exempt, or the rate could be lower. So they aren't in any hurry to lower the income stream.  Trying to get politicians to repeal a source of tax revenue, is like trying to get blood out of a rock. They always seem to forget it is OUR money they are dealing with. 

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I did read your post but I wasn't commenting on that post. I was commenting on the post I quoted. 

Usually clothing is one of those items that has always been complicated because many states have a garment tax on clothing not a sales tax. It falls under a totally different set of laws like gas tax or cigarette tax. It usually is on the same form as sales tax but on a different line or different part of the states form. But eBay needs to set up there system for certain categories to have a different tax rate. The one at the top of the list is clothing. I have already run into issues buying clothing in New York on eBay. They charged the full 8% when it should have been only 4% because the item was less than $110 so only local garment tax should have applied. 

Any state that has a Marketplace Facilitator law made it so eBay has to collect tax like a brick and mortar business or a business that has a physical presence in there state so any sale tax or any tax in that state must be collected on the item. eBay is required to collect the correct amount and remit the correct amount to that state. They could face very serious fines for collecting the incorrect amount or collecting on items that are not suppose to be taxed. Other eCommerce sites I have bought on don't seem to be having this issue, it is pretty much just eBay.

[pburn]

That makes so much sense for states to do, with the onset of online retailer sales tax laws. It wouldn't have been so important prior to the SCOTUS ruling, but coordinating sales tax laws certainly seems to make sense now.

One problem I see for states in trying to develop a uniform sales tax code is the "special interest" groups in specific states lobbying for and receiving sales tax exemptions for senators' constituents' products. I'm sure in my state there are corn-related exceptions, for example. LOL! Or, again, in my state, negotiations between our urban and rural senators that have resulted in certain sales tax exemptions for specific products.

Glad I don't have to be involved in working through that . . .

[computeraidllc]

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@pburn wrote:

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@mudshark61369 wrote:

What pburn & 7606dennis wrote about possibly being able to deduct the taxes later on may work, but not if the seller's state is the one charging the tax.  The Market Place tax responsibility is causing the Facilitators (eBay and other sites) fits. Each state that starts collecting taxes has its own tax code including which items are exempt. 

---

I spent some time on PA's DoR site reading FAQs and whatnot. It looks like PA has a form to complete and submit if a PA citizen feels s/he paid sales tax on exempt items.

This has to be a nightmare for a lot of online retailers that sell diverse items. Looking through just PA's list of exempt items, it is incredibly complicated. I don't know how a marketplace facilitator would ever program the assignment of sales tax to the myriad of products sellers offer on a website like eBay.

https://www.revenue.pa.gov/FormsandPublications/FormsforBusinesses/SUT/Documents/rev-717.pdf

To be clear, I don't advocate any entity collecting and remitting tax on items that are exempt from sales tax in any given member's state. 

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Physical stores never had an issue with this; Amazon, Walmart and Target sites never had an issue with this. Pretty much all the major sites don't have an issue with this. The exception is eBay. The could set a tax on a specific category like Clothing or set it based on an item by item using there catalog that we sellers have to use in certain categories. One place this would work great with is Food. So any listing for Kraft Macaroni & Cheese would be exempt in these states but a bottle of Coke would be taxed in these states. All they need to do is make the food category require the items listed to be in the catalog like some of the other categories and it would work just fine.

[the*dog*ate*my*tablecloth]

Physical stores only have to deal with the rules specific to that location. eBay has to deal with items shipping to the buyers location which could be anywhere. Also some states are derailing with this new streamlining. It will all be fine once the bugs shake out.

Some states are going online with NO notice. I’m fairly confident that all the marketplace facilitators are struggling with how fast things are changing.

[mansons2005]

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@computeraidllc wrote:

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@pburn wrote:

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@mudshark61369 wrote:

What pburn & 7606dennis wrote about possibly being able to deduct the taxes later on may work, but not if the seller's state is the one charging the tax.  The Market Place tax responsibility is causing the Facilitators (eBay and other sites) fits. Each state that starts collecting taxes has its own tax code including which items are exempt. 

---

I spent some time on PA's DoR site reading FAQs and whatnot. It looks like PA has a form to complete and submit if a PA citizen feels s/he paid sales tax on exempt items.

This has to be a nightmare for a lot of online retailers that sell diverse items. Looking through just PA's list of exempt items, it is incredibly complicated. I don't know how a marketplace facilitator would ever program the assignment of sales tax to the myriad of products sellers offer on a website like eBay.

https://www.revenue.pa.gov/FormsandPublications/FormsforBusinesses/SUT/Documents/rev-717.pdf

To be clear, I don't advocate any entity collecting and remitting tax on items that are exempt from sales tax in any given member's state. 

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Physical stores never had an issue with this; Amazon, Walmart and Target sites never had an issue with this. Pretty much all the major sites don't have an issue with this. The exception is eBay. The could set a tax on a specific category like Clothing or set it based on an item by item using there catalog that we sellers have to use in certain categories. One place this would work great with is Food. So any listing for Kraft Macaroni & Cheese would be exempt in these states but a bottle of Coke would be taxed in these states. All they need to do is make the food category require the items listed to be in the catalog like some of the other categories and it would work just fine.

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The tax rules are so complicated that doing it via catagory would be almost impossible. For example, in Illinois (Chicago) there is a tax on bagels bought in the grocery store - but the tax between SLICED bagels and UNSLICED bagels are different - one is considered a convenience food, one isn't. A Hersey ar is taxed because it is candy, a Twix bar is subject to a different tax because it contains flour - it is considered "food". Some stores even have problems getting it correct. The tax on plain milk and on flavoured milk can be different as well, depending on the product.

The easiest solution would be to find an average and create a flat tax...................but we don''t pay the politicians to do things easy in this country.