Final Value fee, how is tax calculated?

[hajbo]

I completed the sale below, speakers sold for parts for 5.00 as indicated. Buyer paid 26.10 for shipping, what I don't get is why the sales tax is 2.18 on a 5.00 sale. I live in Lost Angeles county where the tax rate is 10.25 percent, for a 5.00 item that should be about fifty cents, where does the 2.18 come from?

Thank you

[powell-memorabilia]

Sales tax is based on the item price + shipping.  Also, your local sales tax rate means nothing - it is calculated based on the buyer’s delivery address.

[the-hook-and-the-loop]

eBay is using a 7% California sales tax on the total $31.10.

[kensgiftshop]

The sales tax is based on where the item is being shipped to, not where it's located.

Some state require the sales tax to be applied to the shipping charge also.

[theteamsetguy]

Also just FVF is charged on the sales tax.

[monroe67 · Accepted solution]

Sales tax is charged at the percentage in effect at the buyer's delivery address. 
As far as sales tax is concerned, the location of the seller means absolutely nothing whatsoever.
Some states do charge sales tax on cost of postage or other shipping (FedEx or whatever). 
(FYI, California does not charge sales tax on postage.)  

Your item sold for $5.00 and the buyer paid $26.10 in postage/shipping, totaling $31.10.  And paid $2.18 in sales tax. 
$2.18 divided by $31.10 comes to a tiny little bit more than 7%.   Which seems like an average sales tax percentage.

That seems to be the most reasonable explanation of the $2.18 in sales tax that your buyer paid: he lives in a state that taxes postage/shipping costs.  

(BTW, about 110-120 miles down the I-5 from you, most of SD County pays around 7.75% in sales tax.)

[ebooksdiva]

Tax is based on the buyers location not the sellers.