Final value fees on sales tax????? Are you kidding?

[squarebiz99]

I don't know why I didn't notice before, but I looked at a breakdown of 1 of my transactions and saw that I am being charged a final value fee on sales tax. I don't collect sales tax. eBay collects it from the buyer. It's bad enough being charged a final value fee on shipping. Sellers should only be charged a processing fee for the shipping charge, not a commission, but this FVF for sales tax goes too far. Call it what you want, but a FVF is a commission. Someone should start a class action against eBay, but the biggest problem would be the legal costs. That's probably why no one has yet

[maxine*j]

Every time you use your own credit card for a purchase, the merchant you buy from pays the fee based on the total you paid in the transaction.   This has been the universal practice since the invention of the credit card.

If you believe this is unconscionable or illegal, be sure that you do not participate in the practice yourself.  Tear up your credit cards.  Never use them again for any purchase anywhere. 

.

[hartungcards]

If you call Saul Goodman, the legal costs wouldn't be that bad.

[hartungcards]

You've been at this for 20 years and you finally took a look at one of your final value fee breakdowns?

[goodbrakes]

YAWN......

[monroe67]

I had to double check the date of this post.  I thought it might have been "resurrected" [sorry] from a year or two ago.  

eBay's User Agreement specifically prohibits class action lawsuits.  

I wonder if the OP reads these community boards very often.  eBay's Final Value Fees, which are charged on the total amount paid by the buyer (which may or may not include any sales tax), have been discussed here to infinity and beyond. 

There is a lot of great info here, for those who take the time to read and make the effort to understand.    

[cyranojones]

Just because eBay has it in their agreement doesn't make it right.  Retailers collect the sales tax, eBay sellers do not and should not be charged a fee on money that is not in our part of the transaction.  Of course eBay can get away with it because they can. 

[kensgiftshop]

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@squarebiz99 wrote:

 Someone should start a class action against eBay, but the biggest problem would be the legal costs. That's probably why no one has yet

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While they are at it, might as well add Pay Pal, credit cards and other payment processors.

They all base their fee's on the total amount the buyer pays.

There isn't one, because there's no need for one, there isn't anything illegal about it.

[albertabrightalberta]

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@squarebiz99 wrote:

I don't know why I didn't notice before,

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So whose fault is that that you didn't notice nor didn't read the user agreement? 

[albertabrightalberta]

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@cyranojones wrote:

Retailers collect the sales tax, eBay sellers do not and should not be charged a fee on money that is not in our part of the transaction. 

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Retailers collect the sales tax just as ebay collects the sales tax and both retailers and ebay forward those taxes to the respective states. 

And when you pay for your purchases with a credit card, those retailers (who don't retain the tax) are still also charged the card company's fee even though those taxes are not going into the retailers' pockets.

The full payment made by the buyer IS part of the transaction.

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[rustydalmatian]

I've posted this before, but it needs to be repeated.  For the privilege of collecting, filing and sending sales tax which you, as the seller are required to collect, eBay charges you the sum of 6/10 of a cent for every dollar sent to the respective state.  This is based on 6% sales tax. 

Would you like to do all that on a $100 sale?  60 cents out of your pocket.  Worth it?  It's one of the few services eBay does right to help sellers.

[fern*wood]

I'm thankful ebay handles the collection and remittance of these taxes.  I sure wouldn't want to.  I wish they would charge us a set fee instead of a percentage of tax collected, but no one asked me.

[dbfolks166mt · Accepted solution]

     Just when I though we may get through a week without seeing another one of these we start of the week with one. As others mentioned there are hundreds if not thousands of posts about this same topic. I have finally saved a canned response answer. 

    I have always considered the eBay FVF's on sales tax to be the best accounting bargain around. If you sell a $100 item to a buyer in a state with 8% sales tax the FVF on the $8.00 in sales tax amounts to 13.25% * $8.00 or $1.08 if you are promoting at 2% that adds another $.16 so the total FVF on the sales tax is $1.24. 

     For that $1.24 eBay keeps track of the 10,000 various state, county, city, parish, municipality..... sales tax rates and laws and applies and collects the proper sales tax from the buyer. They then remit those collected funds to the 45 states with sales tax laws on whatever periodic basis is required. There is NO WAY I want to take on that burden as a seller for $1.24 out of a $100 sale. "

[reallynicestamps]

How is it legal to charge me a fee on a tax paid by the buyer and passed on to eBay for payment to the respective state?

Because you are not being charged a fee on a tax paid by the buyer.

You are being charged a fee on PROCESSING the ENTIRE amount the buyer paid you.

The selling price.

The shipping price.*

The sales tax.

Which is what the buyer paid.

And in addition to those, a 30c non-refundable service charge.

*And many sellers happily charge thier buyer the Calculated Shipping which the seller would pay at the PO counter, although we can get discounts on many shipping services purchased through eBay, or use other discounted shipping methods.

[somanypostcards]

I live in California.  Here's what the CA Franchise Tax Board says are the marketplace facilitator and marketplace seller requirements:

"Beginning October 1, 2019, a marketplace facilitator is considered the seller and retailer for each sale facilitated through its marketplace, for example, an Internet shopping website, to determine whether the marketplace facilitator is required to register with CDTFA for a seller's permit or Certificate of Registration.

If you are a marketplace seller, beginning October 1, 2019, you are no longer considered the retailer of your sales of tangible merchandise facilitated through a marketplace, as defined by statute, provided the marketplace facilitator is registered or required to be registered for a seller's permit or Certificate of Registration – Use Tax."

So in California it appears 2 transactions occur.  I, a marketplace seller, sell to eBay, the marketplace facilitator, with no taxes charged on my wholesale transaction as eBay is making a purchase that eBay plans to resell.  eBay sells to the buyer and charges a sales tax on the eBay retail transaction.  This being so, I should NOT be charged a FVF on the sales tax I did not collect in my wholesale transaction.

Also eBay has an Opt-Out form for new users so they can opt-out of the agreement to arbitrate within 30 days of accepting the user agreement.  

[dbfolks166mt]

So in California it appears 2 transactions occur.  I, a marketplace seller, sell to eBay, the marketplace facilitator, with no taxes charged on my wholesale transaction as eBay is making a purchase that eBay plans to resell.  eBay sells to the buyer and charges a sales tax on the eBay retail transaction.  This being so, I should NOT be charged a FVF on the sales tax I did not collect in my wholesale transaction.

     You are aware that CC companies charge merchant fees on the entire amount of the purchase and have done so for years. So the merchant is paying the 2-3% fee on your entire charge to include sales tax, tip (if you leave one in a restaurant).......... 

     If your buyer pays with a CC the CC company is no doubt charging eBay the 2-3% fee on the sales tax so out of the 13.25% fee eBay charges you 2-3% comes off the top leaving them with 10-11% of the actual fees. As to what they use that for see my other response.