Final Value Fee includes Sales Tax Collected by ebay...WHY?

[northcarolinaquilter]

Why would ebay charge a fee on sales tax paid by the customer? It is bad enough to pay fees on shipping.

[fab_finds4u]

Maybe eBay wants to get paid for the service they perform.  They have to make  sure the money they collect goes into the right pockets.  Or would you rather collect the sales tax from your buyers and remit the payments to their states?

[metaltech1]

But....

Does eBay perform the "service"?

I heard it was a Dutch company called Adyen that performs the "service" for eBay.

[fab_finds4u]

Doesn't Adyen keep their fee and give the proceeds to eBay and eBay remits taxes and sends USPS the $ for labels and takes out the  ffv and give the proceeds to the seller?  Adyen isn't  remitting tax money to individual states or paying for labels.

[north40sales]

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@metaltech1 wrote:

But....

Does eBay perform the "service"?

I heard it was a Dutch company called Adyen that performs the "service" for eBay.

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Adyen is a payment processor.  They get buyer payment info from eBay, verify the funds and approve the transaction, and then when eBay closes the batch Adyen withdraws the funds from the buyer's funding source (bank or card) and transfers it to eBay according to their established business practices.  

Some people believe that Adyen does everything, collect the funds from the buyer, send the payouts to the buyers, and remit the taxes to the appropriate states (and counties, and cities where applicable), but have zero information or proof to support that belief.   

My opinion is that Adyen follows the same method as every other card / payment processor company and their piece of the transaction is limited to the buyer's funding approval and funds transfer from the buyer's bank to eBay and eBay handles the rest of the transaction streams via their Managed Payments program and their bank.  

[yes_treat_yourself]

Frankly, I think it's unlawful and needs an investigation or court challenge.  Contact your Congressional representatives to get their take on it.

eBay would tell you to go somewhere else if you don't like it, that their Seller Agreement claims the rights to your first-born should they opt to go that route.

The truth is that eBay pays the taxes only because they calculated early on that they'd go out of business if this was left to sellers, because sellers would quit rather than risk heavy fines or jail time.  They then CHARGE sellers a fee on taxes that a seller will never see.  How convenient.

I have no doubt that another company would have risen up with an app that sellers could use to process and charge/pay tax for every sale they made, perhaps for a small transaction fee.  eBay wanted to keep those fees and that control in-house.  In the old days the tax $$ went directly to us, and it was our obligation to send it to the proper authorities.  Many sellers simply kept the $$ as extra profits and never paid their state or local tax agencies.

We joined PayPal back in 1999 or 2000, when they were an independent new company whose slogan was 'Always Free'.  eBay quickly came up with their own payment processing app that they called 'Billpoint', for which they charged a fee.  We all saw them as terribly greedy, that the listing fees were bad enough, and Billpoint soon bombed which led eBay to buy PayPal.  They IMMEDIATELY placed the bad PayPal transaction burden on the sellers rather than themselves, penalizing sellers over something that we had absolutely no control over.  Typical eBay ideology.

They did the same with photos.  We were all linking our pics to independent photo hosting companies.  eBay soon started to provide their OWN photo hosting service, for which they charged a fee while forbidding us to link to other apps.  That quickly bombed as well.  They then went to the first four photos free, and finally the current dozen.  That's how they quickly earned the title of 'FeePay'.  

Perhaps a 2.5% transaction fee would be justifiable.  But another 10% on top of that?  

No thanks.  

Sleeping much better now that we've severed our selling ties with eBay.  

Just trying to figure out what to do with the remaining inventory at this point in time.  Running an ad on CL as I type...

[kensgiftshop]

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@northcarolinaquilter wrote:

Why would ebay charge a fee on sales tax paid by the customer?

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Why does Pay Pal, credit cards and all other payment processors?

They all base their fee's on the total paid by the buyer.

[north40sales]

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@yes_treat_yourself wrote:

Frankly, I think it's unlawful and needs an investigation or court challenge.  Contact your Congressional representatives to get their take on it.

eBay would tell you to go somewhere else if you don't like it, that their Seller Agreement claims the rights to your first-born should they opt to go that route.

The truth is that eBay pays the taxes only because they calculated early on that they'd go out of business if this was left to sellers, because sellers would quit rather than risk heavy fines or jail time.  They then CHARGE sellers a fee on taxes that a seller will never see.  How convenient.

I have no doubt that another company would have risen up with an app that sellers could use to process and charge/pay tax for every sale they made, perhaps for a small transaction fee.  eBay wanted to keep those fees and that control in-house.  In the old days the tax $$ went directly to us, and it was our obligation to send it to the proper authorities.  Many sellers simply kept the $$ as extra profits and never paid their state or local tax agencies.

We joined PayPal back in 1999 or 2000, when they were an independent new company whose slogan was 'Always Free'.  eBay quickly came up with their own payment processing app that they called 'Billpoint', for which they charged a fee.  We all saw them as terribly greedy, that the listing fees were bad enough, and Billpoint soon bombed which led eBay to buy PayPal.  They IMMEDIATELY placed the bad PayPal transaction burden on the sellers rather than themselves, penalizing sellers over something that we had absolutely no control over.  Typical eBay ideology.

They did the same with photos.  We were all linking our pics to independent photo hosting companies.  eBay soon started to provide their OWN photo hosting service, for which they charged a fee while forbidding us to link to other apps.  That quickly bombed as well.  They then went to the first four photos free, and finally the current dozen.  That's how they quickly earned the title of 'FeePay'.  

Perhaps a 2.5% transaction fee would be justifiable.  But another 10% on top of that?  

No thanks.  

Sleeping much better now that we've severed our selling ties with eBay.  

Just trying to figure out what to do with the remaining inventory at this point in time.  Running an ad on CL as I type...

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You can always invest some money to create and host an online sales venue to list your wares yourself.  That way you have no final value fees at all.  

[mam98031]

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@northcarolinaquilter wrote:

Why would ebay charge a fee on sales tax paid by the customer? It is bad enough to pay fees on shipping.

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We all paid Paypal their fees on sales tax, why is it different when we pay it to Ebay?  Ebay is now the money processor.

[mam98031]

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@north40sales wrote:

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@metaltech1 wrote:

But....

Does eBay perform the "service"?

I heard it was a Dutch company called Adyen that performs the "service" for eBay.

---

Adyen is a payment processor.  They get buyer payment info from eBay, verify the funds and approve the transaction, and then when eBay closes the batch Adyen withdraws the funds from the buyer's funding source (bank or card) and transfers it to eBay according to their established business practices.  

Some people believe that Adyen does everything, collect the funds from the buyer, send the payouts to the buyers, and remit the taxes to the appropriate states (and counties, and cities where applicable), but have zero information or proof to support that belief.   

My opinion is that Adyen follows the same method as every other card / payment processor company and their piece of the transaction is limited to the buyer's funding approval and funds transfer from the buyer's bank to eBay and eBay handles the rest of the transaction streams via their Managed Payments program and their bank.  

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Adyen does NOT remit sales tax to the various states that require it.  The MFLs [Marketplace Facilitator Laws] are for the Marketplace, not the money processor.  Ebay collects and remits the taxes as require of them by law.  Just as Amazon, Etsy and the rest of the Marketplaces do it.

[mam98031]

"The truth is that eBay pays the taxes only because they calculated early on that they'd go out of business if this was left to sellers, because sellers would quit rather than risk heavy fines or jail time.  They then CHARGE sellers a fee on taxes that a seller will never see.  How convenient."

No.  Starting in 2019 MFLs [Marketplace Facilitator Laws] started getting passed.  Over the next couple of years lots of the states passed these laws which REQUIRE Marketplaces to charge, collect and remit sales taxes.

If left to the sellers, most sellers would not even likely qualify is many states to collect and remit sales tax because of their thresholds.  Some have pretty low thresholds while others are pretty high.  Those thresholds are based on the dollar value of sales you have being delivered into each of the states.  It is NOT based on a seller's overall sales.  So there would be lots of sellers that simply would not need to comply.

Likely if they didn't pass the MFLs, they would all just lower the thresholds in the states with high ones so that more of us would have to collect and remit sales.  That would be absolutely horrible.

[dq3141]

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@mam98031 wrote:

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@northcarolinaquilter wrote:

Why would ebay charge a fee on sales tax paid by the customer? It is bad enough to pay fees on shipping.

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We all paid Paypal their fees on sales tax, why is it different when we pay it to Ebay?  Ebay is now the money processor.

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We paid PayPal 2.9% on sales tax. We pay eBay 12.55% on sales tax. That’s why it’s different. 

The money processing portion of eBay’s fee is about 2.55%. I don’t think many people would complain about paying that % on the sales tax.

[mam98031]

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@dq3141 wrote:

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@mam98031 wrote:

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@northcarolinaquilter wrote:

Why would ebay charge a fee on sales tax paid by the customer? It is bad enough to pay fees on shipping.

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We all paid Paypal their fees on sales tax, why is it different when we pay it to Ebay?  Ebay is now the money processor.

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We paid PayPal 2.9% on sales tax. We pay eBay 12.55% on sales tax. That’s why it’s different. 

The money processing portion of eBay’s fee is about 2.55%. I don’t think many people would complain about paying that % on the sales tax.

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I get it.  You are preaching to the choir.  I have repeatedly stated that I don't like the FVF on sales tax either.

For those that do not have a store, in most categories they pay 12.55% FVF to Ebay less the 2.9% we use to pay to Paypal = 9.65% that we are now paying on sales tax that we are not use to paying on sales tax charged to the buyer.  So about 10 cents per dollar.  Which of course adds up as a seller may price their items.

I get it.  I always have. 

For sellers with a store in most categories they pay 11.7% FVF less 2.9% that was paid to PP = 8.80%

On sales that has NO sales tax on it, that means you are paying 9.65% on the FVF of that sale which is much lower than you paid before MP if you did not have a store and 8.8% if you had a store.

While sales with no sales tax is not as common as sales with sales tax, the savings adds up.  What ends up happening if you compare the numbers that are ACTUALLY IMPORTANT, the MONTHLY fees you normally pay, you will likely find that your Ebay fees have NOT gone up in MP.

I did a comparison on my sales for a 6 month period.  I found that in each and every month I did not pay any more in fees than I did before entering MP.  So for me, I'm not paying more, so I'm OK with this.  We certainly didn't get the savings that Ebay said we would in MP, but I'm not paying more and that is a big deal to me.

So you just need to figure out what is important for you.  How you are paying more on your comparison of a single transaction or your overall cost in any given month.  For me personally, the monthly totals is what matters to me.

[varebelrose]

"It is bad enough to pay fees on shipping."

But wait, theres MORE!

 You also get to pay FVF on the sales tax on the shipping itself, for the states that charge it.

[mam98031]

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@varebelrose wrote:

"It is bad enough to pay fees on shipping."

But wait, theres MORE!

 You also get to pay FVF on the sales tax on the shipping itself, for the states that charge it.

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I think that is understood by most.  It still doesn't change the numbers I represented or explained in my above post.