Why is eBay collecting a comission on State and Federal Taxes?

[machinerynj]

I see eBay is collecting fess on total amount of the sale, which includes the item price, shipping and handling costs, sales tax, and any other applicable fees. I understand everything but sales tax. Sales tax is not in any way going into my pocket. I have no control over it. I AM BEING DUBBLED TAXED! OUT OF CONTROL UNFAIR WRONG!!!!!

[rock.star]

Ebays final value fee is charged on all monies paid by the buyer. 

There are no Federal taxes involved. 

[corvettestainless]

It's not unfair and it's not illegal. Processors have always charged on total sale. It's just a simpler way to charge a fee; on the total. If they were to increase to say, 20% like most other selling sites charge (that actually get sales). 

Already proven that on a $100 sale, ebay way is cheaper than paying 20% of them item even without charging a fee on shipping & tax.

[alcoforever]

It costs ebay a considerable amount of money to collect, report and remit taxes for the 43 states that require such.   For ebay to charge their normal FVF on that tax seems to me a small price to pay to keep us individual sellers from having that tax reporting burden.   

Besides, if ebay didn't charge FVF on taxes, ebay would have to raise the FVF on the item, probably to around 15% or so.

So get used to it and adjust your business model appropriately.

[valueaddedresource]

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@alcoforever wrote:

It costs ebay a considerable amount of money to collect, report and remit taxes for the 43 states that require such.   For ebay to charge their normal FVF on that tax seems to me a small price to pay to keep us individual sellers from having that tax reporting burden.   

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@alcoforever  Most of the states that have passed some kind of remote sales tax law put the minimum at $100,000 in sales or 200 individual transactions in that state - some are up to $500,000.

In a hypothetical situation where eBay didn't have the legal obligation to collect that tax but individual sellers did, it's very unlikely most sellers here would meet those minimums in all 45 states which have remote tax laws.  Many sellers likely would only have to worry about their home states, like it used to be, or at worst a handful if there are some states where they do a large percent of their business.

So if we're going to make the argument that it's better for eBay to do it than us, I think it's important to realistically and honestly represent what the burden on sellers would be if eBay wasn't doing it.

It may work out to be a great deal for larger sellers who would have to bear the burden for all those states themselves, probably not so much for smaller sellers who likely wouldn't.

Here's a link to a list of all the states and their thresholds for remote sales tax laws https://blog.taxjar.com/economic-nexus-laws/ 

If you think it's better for eBay to do it than for sellers to have to- please post a list of how many states (excluding your home state) where your business would meet the threshold and be required to collect remote sales tax if eBay didn't do it.

[alcoforever]

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@valueaddedresource wrote:

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@alcoforever wrote:

It costs ebay a considerable amount of money to collect, report and remit taxes for the 43 states that require such.   For ebay to charge their normal FVF on that tax seems to me a small price to pay to keep us individual sellers from having that tax reporting burden.   

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@alcoforever  Most of the states that have passed some kind of remote sales tax law put the minimum at $100,000 in sales or 200 individual transactions in that state - some are up to $500,000.

In a hypothetical situation where eBay didn't have the legal obligation to collect that tax but individual sellers did, it's very unlikely most sellers here would meet those minimums in all 45 states which have remote tax laws.  Many sellers likely would only have to worry about their home states, like it used to be, or at worst a handful if there are some states where they do a large percent of their business.

So if we're going to make the argument that it's better for eBay to do it than us, I think it's important to realistically and honestly represent what the burden on sellers would be if eBay wasn't doing it.

It may work out to be a great deal for larger sellers who would have to bear the burden for all those states themselves, probably not so much for smaller sellers who likely wouldn't.

Here's a link to a list of all the states and their thresholds for remote sales tax laws https://blog.taxjar.com/economic-nexus-laws/ 

If you think it's better for eBay to do it than for sellers to have to- please post a list of how many states (excluding your home state) where your business would meet the threshold and be required to collect remote sales tax if eBay didn't do it.

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Ok.   I won't use that argument any more.   But the other one still applies:   FVF raised to ~15%.

[kensgiftshop]

@machinerynj 

Just like Pay Pal, credit cards and other payment processors, their fee's are based on the total amount the buyer paid.

[machinerynj]

I understand.  When eBay started people padded the the shipping so they did not half to pay the fee. Well they got smart and fixed it. So its the total through ebay. Taxes on the other had is a goverment imposed and cant be padded. So now we that live in sates that are taxed on intersate trade through the intenet again are TAXED by eBay. This is not fair!

[dugoldstuff]

It costs ebay a considerable amount of money to collect, report and remit taxes for the 43 states that require such.

So why isn't it the STATES that pay eBay for this service, since eBay is collecting the taxes for THEM?

Why should I foot the bill for the collecting of taxes that don't enrich me but enrich some state government somewhere?

Hmmm?

[jda11121]

Now that is funny.....

[donsdetour]

Well PP charged you for it also.

Why went you gripping about that???

That of course is because you just did not know it was happening.... Now you do.

Better to pay the fee than have to do 40 plus states my self......

[mybigsale]

You are right. Those making the claim that other processors also charge a processing fee are "off" on their assessment because others do not include a commission in their rate.

Other processors "low" fee reflects that their charge is for processing the transaction (not making a commission on what you are selling) - for instance credit card processors. PayPal's low fee includes the cost of dealing with credit cards, banks, other payment systems.

eBays MP Fee is really their combined charge (they just added there transaction fee + Commission rate) to come up with their higher rate).

eBay justifies charging the higher rate on shipping because they know some users may charge a High Shipping cost and lower the Item Price so they Must to make sure they get  their commission (when in actuality they know how much the actual shipping cost is for sellers using eBay shipping).

To make it easier for us sellers they just use the combined rate for sellers.

It would be too complicated for sellers to understand:

T = Tax

S = eBay Shipping Cost (purchased through eBay)

C = Item Price + Shipping and Handling Charge (OR) C =  Item Price (free shipping included)

=======

Commission = (C - S)  X CommissionRATE

TransFee =  (C + T) X Transaction Fee Rate 

eBay charges Commission + Transfee (and of course their added 30cents)

CommssionRate is 9% or whatever

TransactioFeeRate is 2% or whatever

TransFee would cover total sale. Commission would only cover item price and shipping and handling that is over the eBay calculated shipping rate.

eBay's current MP rate DOES charge a commission on the tax and shipping. Breaking out Commission and Transaction rates would eliminate this issue quite simply. MP is not like other processors - MP must get their commission on the items we sell to support the eBay Platform.  Does eBay need to earn a commission from Shipping and Tax. If so - then stop complaining about high prices sellers need to charge so they can pay the commission on Shipping and Taxes and other fees to eBay.

[forward-motion]

They handle all the sales tax and I don’t have to? Yeah I’m happy to pay a fee for that headache. 

[valueaddedresource]

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@forward-motion wrote:

They handle all the sales tax and I don’t have to? Yeah I’m happy to pay a fee for that headache. 

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@forward-motion  - out of curiosity, how many states would you meet thresholds to have to collect tax for under remote sales tax laws if eBay wasn't required to do it?

[forward-motion]

I don’t know, I don’t care. I am just happy I don’t have to do it or know these answers. 

I have enough profit built in to make the margin I need. That’s all I need to know.