Tax Invoice - Sales Tax On Fees (Where Applicable)

[valueaddedresource]

There seems to be a lot of confusion about the new "tax invoice."

Per eBay's help page this new report shows sales tax charged on fees, where applicable.

https://www.ebay.com/help/selling/fees-credits-invoices/reconciling-ebay-sales-transactions-managed-...

Some national/state/local governments consider digital services to be taxable - including possibly the services that online marketplaces provide to sellers. For example eBay UK applies VAT on seller fees, and back in 2019 Amazon announced they would be assessing sales tax on seller fees in some states too.

My understanding of the new report is it shows all fees paid to eBay (green section) and any taxes that may have been assessed on those fees (red section).

tyler@ebay brian@ebay  rebecca@ebay  - can you please have payments_team@ebay clarify this ASAP? An announcement and pinned post would really help when new reports like this are rolled out. 😊

[valueaddedresource]

Here's what the detailed csv view of the report looks like - again, showing fees paid to eBay and taxes paid on those fees (if any).

[rebell45]

Yes, some states charge sales tax on "service fees".

https://community.ebay.com/t5/Payments/What-the-heck-is-a-quot-tax-invoice-quot/m-p/31666561#M112638

[tyler@ebay]

Hi @valueaddedresource - I'm happy to make a request, but am a little unclear on exactly what I'm asking them for (your breakdown of the report seems remarkably thorough). 

Is there a specific question or something missing that we should have them clarify or is this more about getting the same information you've compiled put together and posted prominently?

[valueaddedresource]

Thanks tyler@ebay ! Yes the request is just for the payments team to have an official "FAQ" type pinned post about this report with links to the relevant help and policy pages, please.

There seems to be a lot of confusion, and from what some other posters are saying it may even be that this report has changed recently but I'm not sure.

Some examples

https://community.ebay.com/t5/Selling/what-is-a-tax-invoice/m-p/31663426/highlight/true#M1709308 

https://community.ebay.com/t5/Payments/What-the-heck-is-a-quot-tax-invoice-quot/m-p/31666486/highlig...

https://community.ebay.com/t5/Selling/Tax-Invoice/m-p/31759305/highlight/true#M1726806 

I've seen several posts saying this shows the sales tax collected and remitted by eBay as a marketplace facilitator (it doesn't) and also several referring to income taxes - including Griff and Rebecca on the most recent episode of the podcast.

While the total fees paid would also be useful for income tax filing purposes/record keeping, that doesn't address the fact that the tax (if any) listed in this report would specifically be taxes on the fees paid if you live somewhere that considers such services taxable.

Some sellers may not even be aware that such services may be taxable in some places, which could also be part of the confusion.  I think a pinned post from the payments team would help a lot. Thanks for passing it on!

[tyler@ebay]

Thanks so much for the context @valueaddedresource! I'll get this sent to the payments team and ask them to prioritize an explanation, breakdown of the report (with screenshots particularly) and some practical applications.

[nkpina2014]

If Ebay starts charging me taxes on FVF, I'm out as a seller.

Ebay already inflates the FVF based on the sales tax, now they'll want to charge a tax based on the FVF they collected? Yeah, seems shady! 

[valueaddedresource]

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@nkpina2014 wrote:

If Ebay starts charging me taxes on FVF, I'm out as a seller.

Ebay already inflates the FVF based on the sales tax, now they'll want to charge a tax based on the FVF they collected? Yeah, seems shady! 

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@nkpina2014  It's a tough subject - if that happens, it will be because of laws requiring eBay to do so.

Just like eBay having to collect sales tax because of Marketplace Facilitator laws, or when Amazon announced they would be collecting tax on fees in some states in 2019, there's a certain amount of this that is outside of the control of the marketplace.

If you live in a state that taxes digital services, or is considering doing so, you may want to contact your government officials to let them know about the impact this would have on your business - it may not go anywhere but ultimately they will be the ones making that decision.

That being said, I can absolutely understand how this would put sellers in a tough spot, especially with the recent fee increase in many categories.  I also absolutely agree that eBay including sales tax in the FVF calculation muddies the ethical waters here and makes a tough spot for sellers even tougher.

eBay may not have control over various tax laws, but they do control their own policies and procedures, so there are certainly ways they could help ease the burden for sellers if this becomes an issue - we'll just have to wait and see how it plays out.

[nkpina2014]

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@valueaddedresource wrote:

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@nkpina2014  It's a tough subject - if that happens, it will be because of laws requiring eBay to do so.

Just like eBay having to collect sales tax because of Marketplace Facilitator laws, or when Amazon announced they would be collecting tax on fees in some states in 2019, there's a certain amount of this that is outside of the control of the marketplace.

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My problem will be Ebay's model. They already collect a fee for sales tax as it's a part of the FVF, and if they tax the "service" of charging me a FVF, they are in essence collecting a tax for collecting a tax. That just doesn't sit right with me. 

If Ebay reduces their fees (unlikely), I might stick around. But there's no way I'm paying more than 20% in fees in exchange for Ebay. It's simply not worth it, and there are competing platforms. Currently, I hover at anywhere from 17-19% once shipping is factored in. Adding 10% on top of that (bringing it to 18.7% - 20.9%) is just too far. 

[valueaddedresource]

Just to avoid any confusion - I want to clarify that my screenshot of the detailed report above looks the way it does because I formatted it as a table as a personal preference just to make it easier to read and removed or minimized columns/rows that were not relevant or contained personal data of either the seller or buyer.

This is what the report looks like as downloaded from eBay without my formatting

[revenue-collector]

Sellers taxes on fees that are based (partly) upon taxes collected by a third party. Gotta love being taxed on someone else's income.

[valueaddedresource]

tyler@ebay  - bumping this request back up the list.

Sellers who are on the 1st of the month billing cycle are getting notice of their monthly tax invoice and again it seems to be causing confusion.

https://community.ebay.com/t5/Selling/what-is-a-tax-invoice/m-p/31840093/highlight/true#M1742739

https://community.ebay.com/t5/Payments/What-the-heck-is-a-quot-tax-invoice-quot/m-p/31839989/highlig...

https://community.ebay.com/t5/Selling/Ebay-s-New-Monthly-Tax-Invoice-Ebay-failed-again/m-p/31840107#...

[tyler@ebay]

Hi @valueaddedresource - thanks for these threads! I've bumped it with the payments team and have been told it's 'on the list' for a proactive post but don't have a more specific timeline than that. 

[valueaddedresource]

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tyler@ebay wrote:

Hi @valueaddedresource - thanks for these threads! I've bumped it with the payments team and have been told it's 'on the list' for a proactive post but don't have a more specific timeline than that. 

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Thank you tyler@ebay !

[valueaddedresource]

tyler@ebay  - there is still a lot of confusion with people thinking this report has something to do with sales tax being collected and remitted by eBay or the seller.

https://community.ebay.com/t5/Selling/what-is-a-tax-invoice/m-p/31905998/highlight/true#M1757157 

Any update from payments_team@ebay about an FAQ/sticky post for this?