Fees on Tax

[mystery_spot]

Adding Tax before calculating the final value fee seems to be a scam business practice

[theteamsetguy]

@mystery_spot,

Its no different than when any shopper that goes into a Target, Home Depot, Macy's, local mom and pop store uses a credit or debit card to make their purchase. The payment processors charge 2.50% fee on the total transaction amount including sales tax. 

Also, when you go to restaurant and you pay with a credit or debit card the processor charges the owner their fee on the sales tax and any tip you put on the card. So the payment processor profits not only on the sales tax but on the tip you leave also.  

[theteamsetguy]

@boilergeek ,

It is legal because there is no law currently against. Maybe you should contact your congressman and senator to suggest they pass a law against it.

[theteamsetguy]

@joliztoyco,

If you used a credit or debit card. Macy's payment processor charges Macy's their 2.50% processing fee on the sales tax. I'm sure Macy's pass the fee they were charged on the sales tax by including it the price you paid for the stuff you bought. You just didn't see it.

I factor in .50% for ebay's fee on sales tax in my prices. 

[bonjourami]

"Because I bought several items from "Macys" for Christmas presents. Paid for the items and sales tax when I checked out.
And they sure as heck didn't try and charge me a 12.9% "fee" for handling the sales tax they collected."

Stop and think..why would they charge the customer? They would charge the vendor who is collecting the tax.

[mystery_spot]

so what, that has nothing to do with profiting off sales tax from the item price

[valueaddedresource]

---

@ebooksdiva wrote:

---

@mystery_spot wrote:

They would increase their sales if they got rid of that, who else can profit from sales tax like that ?

---

eBay does not profit from collecting sales tax. If that is true show us all the proof behind your accusations.. The states collecting the taxes get the tax money. The payment processor charges a fee to collect the tax and remit it to the the states that require the tax. If you can’t understand how fees work, then maybe you should stick to selling your wares out of your garage. 

ETA What I don’t get, is how can you be a seller for all this time and just now notice the sales tax. 

---

@ebooksdiva - "eBay does not profit from collecting sales tax" - except that tax sharing deal they worked out with the city of San Jose right? 🤨

That deal designates all sales on the site that ship anywhere in California as having occurred at eBay HQ, thus allowing the city to collect the local tax that would normally be spread out amongst various cities in the state where buyers actually reside.

That means in California, other cities aren't even getting their share for infrastructure upkeep or anything else the local portion of the tax would normally be used for.

San Jose gets 1% of all CA sales and eBay gets a kickback of 30% of anything they collect over $5 million a year. It was estimated eBay will profit to the tune of ~$150M from that deal alone, but of course it could be even more than that depending on how much they collect in taxes.

https://news.bloomberglaw.com/daily-tax-report-state/no-strings-attached-tax-deal-shows-depth-of-eba... 

[valueaddedresource]

---

@joliztoyco wrote:

Really?
Because I bought several items from "Macys" for Christmas presents. Paid for the items and sales tax when I checked out.
And they sure as heck didn't try and charge me a 12.9% "fee" for handling the sales tax they collected.
Only Ebay gets away with that crap.  
Tell us more......

---

@joliztoyco exactly right! No other marketplace (that I know of) applies their full commission fee on the sales tax amount.

Most credit card/payment processors are in the realm of ~3%

Etsy charges their 2.9% payment processing fee on the tax amount, but not the 6.5% commission.

For seller fulfilled orders, Amazon does not charge any fees on Amazon collected Marketplace Facilitator taxes. If the seller has direct tax collection obligations and opts to use Amazon's tax calculation service, a 2.9% processing fee applies to the tax amount only, separate from Amazon's referral fee on the item price + shipping - and even that is pretty much a moot point now as the few states with sales tax that didn't have Marketplace Facilitator laws before finally got on the bandwagon.

If every other marketplaces or payment processor can somehow cover their costs of compliance at ~3%, eBay absolutely doesn't *need* to charge ~13% to cover theirs.

[soh.maryl]

Feel free to think of it as a scam if you wish; however, it is legal.    

[714ricki]

What is your opinion about the creidt card companies also calculating their commission based on the grand total which includes sales tax? They are not doing anything that different from all of the financial institutions. Plus, ebay remits all the collected sales tax to the appropriate state. Well worth a couple of extra pennies. 

Take a look at the hundreds of threads on the topic for other opinions.

Good luck!

[eburtonlab]

If every other marketplaces or payment processor can somehow cover their costs of compliance at ~3%, eBay absolutely doesn't *need* to charge ~13% to cover theirs.

eBay could certainly choose to not charge a fee on the sales tax at all, but the alternative would be to raise the percentage on the rest of the amount to compensate, so the total cost to the average seller would wind up being the same, overall.

While this might prevent complaints about "illegal" collection of fees on sales taxes, it is not clear why the average seller should prefer a change that has no effect on the total fee that the seller must pay.

eBay gets to decide the fee rate or what the percentage applies to, and then it is up to each seller to individually determine whether listing an item makes sense given the fee structure that eBay requires.

[inhawaii]

You can explain this and debate this all day long.

Some sellers just don't get it, and never will. 

Bottom line is if you don't like it and think it's unfair or illegal, don't sell on ebay.