Extra charge for sales tax

[jkch425]

Is anyone else concerned with the fact that when eBay collects sales tax from the buyer they count that as income for you on the seller fees before they remove the tax which causes you to pay eBay 15% of the sales tax. If you don’t believe it, look at your fees and statements. 

This may not be concerning to people that sell small amounts but some of my sales are in the 1000s and if sales tax are $700 in some cases I am paying eBay $100 in extra fees.

[soh.maryl]

Who are you addressing? 

[thelongball]

The poster of course. I'm curious to know if they would be interested in having 40+ if they wanted to handle sending in the taxes on their own. Of course it would be every quarter and then your yearly report. All that work is well worth the small amount that eBay takes to handle all that for us. 

[luckythewinner]

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@jkch425 wrote:

Is anyone else concerned with the fact that when eBay collects sales tax from the buyer they count that as income for you on the seller fees before they remove the tax which causes you to pay eBay 15% of the sales tax. If you don’t believe it, look at your fees and statements. 

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Over the past few years, thousands and thousand of people have posted here saying they don't like paying fees on sales tax. 

Over the past few years, thousands and thousand of people have posted here saying they don't like paying fees on shipping. 

Over the past few years, thousands and thousand of people have posted here saying they don't like paying any fees at all.

But despite thaty, ther are still roughly 1.5 billion items listed here so clearly it not done much to affect the willingness of sellers to use the site. 

So I'm not sure whether I am "concerned" about it really means anything.  

[ryry-jj]

I think it is very easy for on-line sellers to not be fully aware of all the cost of doing business, and on a market place facilitator like eBay so much is done behind the scenes.   Not only do they collect and pay the taxes, but they have to keep up with all the new assessments that go into effect.    Every district's increase has to be accounted for.   I pay prepayments and file quarterlies in my daily business,  if I'm 1 day late its a 10% penalty on all owed taxes, no excuse for being late, no excuse for being in a hospital, no excuses period.

Now, granted if we did it ourselves most of us would not meet nexus for most states, but the state we reside in is still more than most of us could ever handle on a monthly basis, let alone filing the quarterly report

[jbbowers12012]

Plenty of eBay sellers are not fond of this.  But, thats' the rule.  Its' eBays' court - they just allow us to play on it.  Jus' Sayin'.

[stuff4divas]

super old news that i was never 'concerned' about

[johnrj1226]

5+ years under  the Manage Payment program and even with the former but now total divorsed eBay/PayPal program

[tobiasness]

Keep in mind that if you ran your own website and had to deal with all the different sales tax round the country you would have to subscribe to software that calculates it for you, and there would be a fee. I think some software calculates it and actually sends it to the tax authority, while giving you records to use on your taxes, I am  sure they dont do that for free.

[itsjustasprain]

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@jkch425 wrote:

Is anyone else concerned with the fact that when eBay collects sales tax from the buyer they count that as income for you on the seller fees before they remove the tax which causes you to pay eBay 15% of the sales tax.

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Me? No - I am fine with that.

1) Ebay charges their percentage on the full payment from the buyer. It may or may not include sales tax depending on where the item will be sent. How they break down their percentage of the total that they deducted does not matter to me.

2) 15% of the sales tax is generally chump change as compared to the full payment (or even the full amount of the sales tax) and Ebay takes on the role of reporting it to the appropriate state so that I do not have to.

3) If you are paying $100 in extra fees simply based on the amount of the sales tax then you must have had a monstrous sale - because $100 would still be chump change for that particular purchase - right?

I notice that you were first 'shocked' about this back in 2020 when Paypal was doing much the same thing:

https://community.ebay.com/t5/Selling/Sales-tax/m-p/30586618#M1535899

That arrangement has not changed much (if at all) under Managed Payments since then.

[soh.maryl]

And it has to be way more than 40 +.  Our state alone has way more taxing entities than that.  

[ltldpr]

"If you have ever had a business where YOU have to collect the sales tax and remit it to states and townships all over the country, you would thank ebay for doing that."

I have a b&m business & I only pay sales tax to my state (my county gets their cut from my state) and income tax to my country. 

I will say though, that boxing up and shipping about 15 boxes of paperweights to someone out-of-state in a non-eBay transaction late last year and earlier this year made me appreciate the services that my FVFs pay for lol! 

From the platform where the buyer can see, read about & ask questions of me to just being able to go to the sale, and print the shipping label right there, to the payment being handled by eBay and having eBay do all the communicating about the tracking if I don't have time - worth it for me, a small seller.

I can see OP's point though. $700 is an awfully large amount of money going to a company who's expending the same amount of work to pay sales tax to his state on his behalf as they would if he only owed $10. There really should be a cap. They didn't do more work, but earned a lot more money, taking a lot more from sellers of high ticket items.

Edit: I misread. I thought his fee was $700, but still. They do the same work for remitting $100 or $10. 

[albertabrightalberta]

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@jkch425 wrote:

This may not be concerning to people that sell small amounts but some of my sales are in the 1000s and if sales tax are $700 in some cases I am paying eBay $100 in extra fees.

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I think you might be miscalculating your charges. 

On a $3K, sales tax at 8% (higher than average US rate) would be $240. Your fee on that tax is about $31.00. 

Yes it adds up but where else are you going to find as many potential buyers?

[monroe67]

"I can see OP's point though. $700 is an awfully large amount of money going to a company who's expending the same amount of work to pay sales tax to his state on his behalf as they would if he only owed $10. There really should be a cap. They didn't do more work, but earned a lot more money, taking a lot more from sellers of high ticket items.

Edit: I misread. I thought his fee was $700, but still. They do the same work for remitting $100 or $10."

That's the whole point, though.  

The majority of eBay's Final Value Fee (FVF) is a percentage that is applied to the total amount paid by the buyer.  

In my opinion, there does not need to be a cap on the amount of FVFs that eBay can retain, regardless of the category.

(The other part of eBay's FVF is a per-order fee of only 30 cents when the total paid by the buyer is $10.00 or less. 

That per-order fee is raised to 40 cents on all transactions where the total paid by the buyer is $10.01 and more.)  

Capitalism.  Free Markets.  Free Choice for Sellers and Buyers.  

Also:  Acceptance of the rules of the road, or the platform, in eBay's case.  

[ltldpr]

"In my opinion, there does not need to be a cap on the amount of FVFs that eBay can retain, regardless of the category."

There should be a cap on the amount they collect on the tax amount. 

If they did more work in order to remit the higher tax amount, then fine, but they don't.

It should be a very nominal, flat fee for tax collection and remittance. 

[gloryglorygifts]

I have a b&m business & I only pay sales tax to my state (my county gets their cut from my state) and income tax to my country.

That's a different kind of animal as you know. You have a physical location so you pay your tax to your state and local government. I did the same when we operated here in NY and in NJ, but have always had to pay sales tax to other states with our website. Thankfully, the Avalara system helps us with that, but it is still a full time job.

It is unfortunate that the OP paid that much in fees. I think you're right. Maybe there should be a cap.