Coming late to ebay's sales tax boondoggle.

[khentiamentiu]

I just discovered that ebay applies it's 12.9 % final value fee not only to the final sale, and shipping and handling, but to California SALES TAX! Yes, I know that many of you already knew this, and I'm sorry to bring it up again, but I do have a related question. If one thinks that this is price-gouging on ebay's part, whom does one contact other than ebay to get a legal opinion on this?

[r_lresale]

For a couple of years marketplace facilitators such as ebay have been required to collect sales tax and remit to the state. Many online sellers were not collecting and or remitting to each state they made sales in. Marketplace facilitator laws came about because of this and 3rd party facilitators must now collect state sales tax (if that state has sales tax) on behalf of sellers at the time of the sale and also remit to the taxes to each state on behalf of seller. If you would like to learn more about the laws just google "marketplace facilitator laws"

Ebay as well as most other 3rd party facilitators charge their seller fees based on the total amount of sale which now includes sales tax as required.  Ebay provides this information in the TOS you read and acknowledge when signing up to be a seller. This is not illegal or price gouging. Price gouging refers to sellers increases prices on necessary goods and commodities to an unreasonable level when there is a shortage of that item after natural disasters or civil emergencies. 

price gouging

[price gouging]

NOUN

NORTH AMERICAN

1. the action or practice of overcharging customers for something by sharply increasing its price, especially in order to take advantage of sudden high demand:

   "in the coming weeks the medication will be running out, leading to shortages and price gouging"

[annadryl]

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@khentiamentiu wrote:

If one thinks that this is price-gouging on ebay's part, whom does one contact other than ebay to get a legal opinion on this?

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A  lawyer. Also ask them what price gouging is, which is something not related to this at all.

The fees are the cost of doing business with someone with well-established and documented fees.

[fab_finds4u]

You're late to the game! It's not just California SALES TAX.

The fee is on the total cost the buyer pays. Item cost, shipping & handling and sales tax the buyer paid.

[ebooksdiva]

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@khentiamentiu wrote:

I just discovered that ebay applies it's 12.9 % final value fee not only to the final sale, and shipping and handling, but to California SALES TAX! Yes, I know that many of you already knew this, and I'm sorry to bring it up again, but I do have a related question. If one thinks that this is price-gouging on ebay's part, whom does one contact other than ebay to get a legal opinion on this?

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Final value fees
We charge one final value fee when your item sells, and you don't have to worry about third-party payment processing fees. This fee is calculated as a percentage of the total amount of the sale, plus $0.30 per order.

The total amount of the sale includes the item price, any handling charges, the shipping service the buyer selects, sales tax, and any other applicable fees. If you offer 1-day or international shipping as well as a cheaper or free option (like domestic shipping), the total amount of the sale is calculated based on the cheapest domestic option you offer. If you only offer 1-day or international shipping but no cheaper option like domestic shipping, the total amount of the sale is calculated based on the service the buyer chooses.

If you're in China, Hong Kong, Indonesia, Israel, Japan, Macau, Malaysia, Philippines, Singapore, Taiwan, Thailand, or Vietnam and your item isn't located in the US, the total amount of the sale is always calculated based on the shipping option your buyer chooses.

An order is defined as any number of items purchased by the same buyer at checkout with the same shipping method.

If you need to refund the buyer or cancel the sale, you may be eligible for fee credits as per our fee credits policy.

You will find the above in HELP & CONTACT to find it for yourself or click this link Selling fees | eBay to the policy. You agreed to the policy when you signed up by signing eBay User Agreement which by the way, is written by a team of lawyers.  

It is very legal.

[stainlessenginecovers]

There is nobody to contact (except a lawyer who will happily take your money and in return, give you nothing but this information):

Since this information is clearly and transparently shown at the bottom of EVERY listing you make and since processors have been charging their fee for the TOTAL at the Cash Register since the advent of credit cards in the 1940s, I'm sure the legal beagles at eBay have already made sure this was perfectly legal. 

List it for free.

A final value fee- applies when your item sells.

By selecting List it, you agree to pay the above fees......

List it

Final value fees

We charge one final value fee when your item sells, and you don't have to worry about third-party payment processing fees. This fee is calculated as a percentage of the total amount of the sale, plus $0.30 per order.

The total amount of the sale includes the item price, any handling charges, the shipping service the buyer selects, sales tax, and any other applicable fees. 

[valueaddedresource]

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@khentiamentiu wrote:

I just discovered that ebay applies it's 12.9 % final value fee not only to the final sale, and shipping and handling, but to California SALES TAX! Yes, I know that many of you already knew this, and I'm sorry to bring it up again, but I do have a related question. If one thinks that this is price-gouging on ebay's part, whom does one contact other than ebay to get a legal opinion on this?

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@khentiamentiu in your state it gets even better.

eBay cut a sweet 15 year tax sharing deal with the city of San Jose to designate all sales on the site that ship anywhere in California as having occurred at eBay HQ - thus allowing the city to collect the local tax that would normally be spread out amongst various cities in the state where buyers actually reside.

San Jose gets 1% of all CA sales and eBay gets a kickback of 30% of anything they collect over $5 million a year. 

https://news.bloomberglaw.com/daily-tax-report-state/no-strings-attached-tax-deal-shows-depth-of-eba... 

Don't let anyone around here convince you poor cash strapped eBay just has to charge 12.9% on the tax to cover their costs of compliance...there is a lot more to the story.

[fab_finds4u]

What is your point to single out Local tax that's added to the state tax? 

I live in FL.  Sales tax to my address  is 7%.  The state sales tax is 6%.  The extra 1% is a local tax. The local tax rate can vary.

I am more than happy to let eBay collect and remit the taxes. Imagine if you sell hundreds of items what a headache it would be for a seller to collect and remit the taxes from each of your sales.

It's really getting old reading posts accusing eBay of price gouging or acting improperly.

[valueaddedresource]

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@fab_finds4u wrote:

What is your point to single out Local tax that's added to the state tax? 

I live in FL.  Sales tax to my address  is 7%.  The state sales tax is 6%.  The extra 1% is a local tax. The local tax rate can vary.

I am more than happy to let eBay collect and remit the taxes. Imagine if you sell hundreds of items what a headache it would be for a seller to collect and remit the taxes from each of your sales.

It's really getting old reading posts accusing eBay of price gouging or acting improperly.

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@fab_finds4u my point wasn't about local tax in general (like your example in FL), my point was specifically about how eBay used their political ties to work out a deal to have all sales in the state of California considered to take place in San Jose so that the local government gets the local tax cut (which means other cities in the state where the buyers actually reside do not get their "fair share".)

That deal was estimated to be worth ~$440 Million to the city and ~$150 Million to eBay but of course it may be more or less, depending on how much tax revenue is actually brought in.

That is just one example of how eBay is profiting from sales tax, above and beyond just assessing fees on it.

No other marketplace (that I know of) assesses their full commission fees on sales tax amounts. Some do assess payment processing fees on those amounts, usually at about the 3% range, which is very different from 12.9%.

As far as eBay doing sellers a favor and "saving us from the headache" - how many states and jurisdictions would you actually legally be required to collect for if it wasn't eBay's obligation under Marketplace Facilitator laws?

My guess is for the large majority of sellers it would be 0-1, just like it was previously, with a few having more than that if they are large companies with physical nexus in multiple states or make enough sales to each state to pass the economic nexus thresholds.

If you don't know what economic nexus is, here's a breakdown, but generally speaking most states you would have to have a minimum of $100,000 in sales to that state in a year.

https://www.avalara.com/us/en/learn/guides/state-by-state-guide-economic-nexus-laws.html

eBay isn't handling sales tax on behalf of sellers, they handle it on behalf of buyers and the states.

Sales tax is and always has been the buyer's obligation to pay to their state - the seller (or now the marketplace) has simply been required to facilitate that collection in certain circumstances.

This isn't some service eBay is providing out of the kindness of their hearts or to make sellers' lives easier, they are doing it because they are legally obligated to do so, and they are charging significantly higher than industry standard rates in the process.

Make no mistake - eBay is making out just fine financially on this boondoggle.

Are they allowed to do it? For now at least the answer appears to be yes since there has not been a successful legal challenge to it.

But that doesn't mean it's unreasonable to ask whether or not it's ethical or point out that eBay is likely profiting off the practice.

[valueaddedresource]

Also, just FYI for @khentiamentiu  - if you sell that laptop to someone in California, you'll also pay 12.9% on the ewaste fee that eBay is incorrectly adding.

CA regulations specifically say the ewaste fee only applies to new and refurbished items, but eBay has been adding it for used and for parts as well for 2 months now and still hasn't fixed the issue.

https://community.ebay.com/t5/Buying/Ebay-is-wrongfully-adding-the-CA-ewaste-fee-for-electronics/m-p...

The official response has been that buyers can call support if they believe they've been charged tax/government fees in error....but of course that doesn't address the issue of sellers paying additional fees on those amounts that should have never been included.

[oldskoolmadskilz]

A class action suit lawyer.  In my opinion, ebay should charge 3% on tax and shipping and the full FVF on the item itself.

[oldskoolmadskilz]

Wow, that's super grifty.  Not shocked though.

[oldskoolmadskilz]

There's a lot of posts because it IS gouging.  I sort of get why they did it for shipping, but for the tax it should be capped at 3% like ANY OTHER PAYMENT PROCESSOR.  They could even cap the shipping at 3% considering they know what most people pay for shipping.

[oldskoolmadskilz]

I'm considering adding California to my do not ship list.  I've heard of people getting sued for not disclosing prop 65 items.

[tbest]

I also think this rediculous.  I need to raise my prices to try & make any money on sale.   And Shipping keeps going up  😞   Actually WE pay Close to 19% to sell an item.  My sales have gone wayyyy  downn & it has become NOT worth it anymore after selling on Ebay for 30 years.  And now with the $600 IRS, will come after us for even more money, even we are just selling as a hobby and NOT as a business.  Paperwork is crazy.