Sales Tax Bug

[salebolt]

Sales tax is being rounded up to the next penny instead of rounding to the nearest penny. 

5.46 x .07000 = .3822

This should be .38 tax, but the system is rounding it up to .39

This requires an accounting adjustment to correct and balance accounts.

[berserkerplanet]

Not doing it here in a quick test involving California sales tax (applied to only the item price - not S&H also)

Added one $39.96 item to cart and it correctly computed $3.30 8.25% sales tax ($3.2959 rounds up to $3.30)
Added two $39.95 items to cart and it correctly computed $6.59 8.25% sales tax ($6.5918 rounds down to $6.59)

Two possible variants:
Do your sales tax calculations also apply to S&H?
Does your issue involve automatic eBay collected sales tax for WA or MN?

Where are you seeing the tax amounts? On the order details? Invoices? Packing slips? PayPal payments amount breakdown? Your own tests using the cart? All of the above? Some of the above?

(sometimes info is displayed incorrectly in one place - like Seller Hub - but is in fact correct in other places. IIRC a tax issue involving Tax on S&H included on invoices was happening last year)

[salebolt]

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@berserkerplanet wrote:

Two possible variants:
Do your sales tax calculations also apply to S&H?
Does your issue involve automatic eBay collected sales tax for WA or MN?

Where are you seeing the tax amounts? On the order details? Invoices? Packing slips? PayPal payments amount breakdown? Your own tests using the cart? All of the above? Some of the above?

(sometimes info is displayed incorrectly in one place - like Seller Hub - but is in fact correct in other places. IIRC a tax issue involving Tax on S&H included on invoices was happening last year)

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Tax applies to shipping and handling as well which is included in the 5.46 taxable total.  But that isn't meaningful for this rounding issue, because the tax on shipping wouldn't cause a fractional penny difference in any reasonable case.

Tax is IL Sales tax, it is set to 7.0000 as indicated.

2.50 item, 2.96 shipping, 0.39 tax appears in the cart, seller hub and on PayPal. 

I've tested in the cart with some other items, and the only place I've ever seen this error occur is on $2.50 items though that probably just due to the small sample.  

Example item: 163443421404  test dest zip code 60074 

at Qty 1, it rounds  .3822 to .39    At Qty 4 it rounds  .6748  to .68    I expect both to round down.  

eBay may be doing line based rounding and then totaling the taxes.  That would also give these results.  (2.50x.07 = 0.175 (0.18), 2.96x.07 = .2072 (.21),  0.18+.21 = .39    That method is often specifically excluded in tax rules, tax should be calculated on the total, not the individual lines.

There are some states that require rounding up, but I don't see that requirement in IL.  IL requires to the nearest dollar for summary reporting purposes.

[berserkerplanet]

>>eBay may be doing line based rounding and then totaling the taxes.

Now that you mentioned it, pretty sure they do - they do that for most calculations (FVF on item and shipping as an example)

My example wasn't affected by that, but your is, and I think that may be what is going on here. Whether it's right or wrong I do not know.

Let's see what tyler@ebay says (blues generally take weekends off so probably Monday for a response)

[tyler@ebay]

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@berserkerplanet wrote:
>>eBay may be doing line based rounding and then totaling the taxes.

Now that you mentioned it, pretty sure they do - they do that for most calculations (FVF on item and shipping as an example)

My example wasn't affected by that, but your is, and I think that may be what is going on here. Whether it's right or wrong I do not know.

Let's see what tyler@ebay says (blues generally take weekends off so probably Monday for a response)

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Thanks for the tag @berserkerplanet!

Hi @salebolt - can you get me an item number example for an item that charged the rounded up sales tax amount? I'm trying to isolate where the issue may be coming from. From what I can see at this point it may be a visual display issue on the view item page itself.

Knowing if buyers are being charged this amount will determine the scope of teams I get this reported to. Thanks!

[salebolt]

This is still occurring 7 months later. tyler@ebay Sorry for the delay I didn't see the prior response. I already provided an item number above for the prior report. This is not a display only issue. As I said it is billing thru to PayPal with the incorrect amount. I'll also tag brian.t@ebay here since it's been awhile and I don't know who is currently doing support.

Current item: 153621561320

Sales tax is being rounded up to the next penny instead of rounding to the nearest penny.

1.99 item + 3.36 shipping = 5.35 total

5.35 x .07000 = .3745

This should be .37 tax, but the system is rounding it up to .38

It is coming thru to PayPal at .38 tax

Paypal data:
Purchase Total $1.99 USD
Sales Tax $0.38 USD
Shipping Amount $3.36 USD
Gross Amount $5.73 USD

Again on this item, it is either rounding the total up, or it's calculating the tax per line, then adding them all up (as that would end up in the same place as rounding up in this case). That approach is often specifically excluded in tax rules.

[dtexley3]

Actually some states require the seller/facilitator to round up.  Check with your state sales tax authority.

[salebolt]

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@dtexley3 wrote:

Actually some states require the seller/facilitator to round up.  Check with your state sales tax authority.

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Yes I already mentioned that, and it doesn't apply to IL.

[shipscript]

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@salebolt wrote:

This is still occurring 7 months later. tyler@ebay Sorry for the delay I didn't see the prior response. I already provided an item number above for the prior report. This is not a display only issue. As I said it is billing thru to PayPal with the incorrect amount. I'll also tag brian.t@ebay here since it's been awhile and I don't know who is currently doing support.

Current item: 153621561320

Sales tax is being rounded up to the next penny instead of rounding to the nearest penny.

1.99 item + 3.36 shipping = 5.35 total

5.35 x .07000 = .3745

This should be .37 tax, but the system is rounding it up to .38

It is coming thru to PayPal at .38 tax

Paypal data:
Purchase Total $1.99 USD
Sales Tax $0.38 USD
Shipping Amount $3.36 USD
Gross Amount $5.73 USD

Again on this item, it is either rounding the total up, or it's calculating the tax per line, then adding them all up (as that would end up in the same place as rounding up in this case). That approach is often specifically excluded in tax rules.

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tyler@ebay 

brian@ebay 

[tyler@ebay]

Thanks for the tag @shipscript!

Hi @salebolt - great to hear from you! Thanks for getting me a recent example. I will get it reported to the sales tax team for review. Thanks! 

[salebolt]

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tyler@ebay wrote:

Thanks for the tag @shipscript!

Hi @salebolt - great to hear from you! Thanks for getting me a recent example. I will get it reported to the sales tax team for review. Thanks! 

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Now rounding wrong in the other direction.   13.49+5.34 = 18.83 * .07 = 1.3181 

This is rounded down to 1.31

It should be rounded to 1.32

[3eyedfishcatcher]

Clearly you forgot to include the proper cover page with your TSP report. Hopefully no one will have to burn the building down.

[salebolt]

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@salebolt wrote:

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tyler@ebay wrote:

Thanks for the tag @shipscript!

Hi @salebolt - great to hear from you! Thanks for getting me a recent example. I will get it reported to the sales tax team for review. Thanks! 

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Now rounding wrong in the other direction.   13.49+5.34 = 18.83 * .07 = 1.3181 

This is rounded down to 1.31

It should be rounded to 1.32

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tyler@ebay 

As of today, eBay is still rounding incorrect.  This is also occurring in Use Tax for purchases from out of state.