mam98031 • Volunteer Community Member • Buyer/Seller since 1999
As I pointed it out earlier (on multiple occasions) this may be the information eBay has given you, but it is incorrect. The IRS does not mandate eBay or Etsy or PayPal to consider the use tax buyers are paying on their orders to be viewed as an "income" for the seller.
However each of us interpret it, here is a link to what IRS states.
https://www.irs.gov/businesses/understanding-your-form-1099-k
Many people confuse what PayPal has been doing (since November 2019) with earnings for the sellers. It has absolutely nothing to do with that. PayPal is only charging a so-called "payment processing fee" on the total amount it processes from buyers. Similar to how, when you dine out, the waiter takes your CC and processes it through Visa or AMEX or whatnot, for the entire amount you had to pay (65 bucks for the food service + taxes).
YES
eBay is not entitled to charge sellers a fee, and especially NOT 12.5% of the taxes portion of the buyer payment because it is not an income or intake of monetary units for sellers. This is clearly written in corporate LAW and if you do some research, or consult a corporate lawyer, you will discover it yourself.
You've said this before and I've asked for what law or laws you feel they are breaking. Your only answer to that in the past was for me to look it up. I would if I had any idea of what law it was, but since I don't know, I ask again. What law are they breaking?
Don't confuse my desire to know what law they are breaking as me agreeing with them being able to charge a FVF on sales tax as you will find no post by me on this thread or any other that supports this. I absolutely disagree with Ebay on this point. And I have since this Simplified Fee came to my attention.
Now, with Managed Payment - into which most sellers are getting forced, starting July 15th
IDK that it is "most seller". Did Ebay announce how many were entering MP in July? Where did they announce it?
- eBay is entitled to and already announced that it will charge a processing fee similar to what PayPal has been doing, at the similar 2.69% rate it charges to process the rest of the buyer payment (that is, a total of 2.69% + 30 cents on the entire payment, consisting of item price, shipping cost and tax that the buyer paid). Me and most other sellers would have no problem with this, as it is just a technical change to who is processing the payment.
I'm unsure as to where you get the 2.69%. Currently in MP sellers are paying 2.7% I believe. I could be wrong on that. I've just never seen it as 2.69% is all I'm saying. Currently in MP is it a 25 cent transaction fee. Those rates were not promised to new seller entering MP.
The example I go by is this. Say I sold an item today, at the asking price of 100.00
Currently, for the jewelry category, my fees would look like this, using the 10% eBay rate, as it is now:
Say the buyer paid $100 + $10 (for use tax) + $4.00 for shipping, total buyer payment: $114.00
$ 10.00 for item FVF (charged by eBay on the net item price)
$ .40 on shipping (charged by eBay) I use flat rate shipping on most items)
2.69% of $ 114.00 = 3.07 + .30 to PayPal for processing the buyer's payment, if taxes 10 bucks
_______________________________________________________
Total fees on payment: 14.40
After being enrolled in Managed Payment, with the same sale:
$12.50 for item FVF (charged on the net item price)
$ 0.45 on the shipping portion of buyer's payment
2.69% of $114.00 = 3.07 + .30 to eBay for processing the buyer's payment, and
12.5% of the $10 taxes the buyer paid = $ 1.25
______________________________________________________
Total eBay fees in Managed Payment: $ 17.75
That is a difference of 3.35 USD - no matter how I look at it.
You are assuming current rates in MP apply would have been applied to new sellers entering in July if Ebay had not gone to a Simplified Fee. That may or may not have been correct, but for that we will never know the answer to since they did choose a Simplified Fee.
I think that is what is likely at the root of your fee misunderstandings as you are assuming that Ebay was going to bring the next group of seller in using the same rates as they currently have in MP. That is not anything they said they would do. But you are absolutely correct, they have always said we would save money with MP and that does not appear to be correct.
To get an realistic view of what is transpiring here, you need to be comparing the fees they have announced we will be paying verses the fees we are currently paying. You are comparing numbers you THOUGHT they were going to offer against fees we are currently paying. Clearly the two ways are not the same and will not produce the same numbers. But comparing the numbers to fees you thought they would offer gets you no where. You need to look and compare the announced fees to see what the impact will be against what you are currently paying.
You keep saying my numbers are wrong, but they aren't. You just want to use different numbers that you thought they would or should be offering us but that is not the reality of what is happening. So if you want a true and accurate picture of what going into MP will have on you, you need to compare the right numbers. Otherwise you are making your decision to leave on unrealistic numbers. Numbers that don't matter as they are NOT what is going to impact your account.
This calculation also does not take into consideration the amount a seller loses on the occasional returns, on which only parts of the fee is returned to seller.
That isn't at all accurate. Currently with refunds in PP we do not get any of our fees refunded. In MP we will. If the seller is not forced to do the refund by Ebay then the seller will get refunded their full Simplified Fee once the refund is complete. As we know, inside that fee are the money processing fees and FVFs. So this is going to save sellers money.
MP will also refund to seller the Simplified Fee on cancellations. Which currently we do not get any refunds from PP on the money processing.
And for TRS sellers that have some or all their listings qualify for TRS+, the discount will be calculated on the Simplified Fee which means they get more of a discount because the Simplified Fee has the money processing fees and the FVFs.
@chapeau-noir wrote:
@prettywoman-2012 wrote:
@calibaydeals619 wrote:On my Amazon 1099 sales tax is NOT counted. Amazon facilitator handles it independently. On here, it will be so everyone is responsible. Some states will pursue you more aggressively than others
It gets even more complicated! According to this blog post, "Once a seller is enrolled in Managed Payments, the buyer pays eBay, and eBay disburses the funds to the seller."
https://www.ecommercebytes.com/C/abblog/blog.pl?/pl/2020/5/1590027924.html
So, if it is not the seller who gets directly paid by the buyer but eBay, then why is the seller being charged a payment processing fee? Especially on the TAX portion which eBay immediately removes from the amount it disburses to the seller? And atop of that, a 12.5% Final Value Fee, too?
It's pretty straightforward if you consider the numerous payment methods eBay will be taking under MP. eBay takes these various payment methods under the managed payment umbrella (instead of we sellers having to deal with like 5 or 6 different payment processors), Adyen processes them and they are then disbursed to the seller. Seller is charged the usual and customary processing fee for handling the money.
We've always paid a processing fee, this is the same thing.
And just to add to that. Most casual, small and medium size sellers would likely not even qualify to be able to process their own CC payments without a money processor. A money processor is just a requirement for most of us little guys if we even want to survive on this site or any other.
@dhbookds wrote:Not sure you understand selling principles of this kind of a sale for a large entity...........someone pays for the 20%......not ebay.......the sellers do........so are you willing to drop YOUR prices by 20%? Perhaps so.......but ebay can't get the permission of millions of sellers to run a side wide sale... They can of course, as they have done in the past, pay the 20% themselves, but I can assure you they didn't on this one........which is the reason for the "chosen" sellers...... Remember also, that those sellers have to show that they have the inventory to handle a sale of this kind before they are even considered as chosen...........
Kind of like the reason they used for cutting the TRS discount in half. It was to fund the Promoted Listing discounts given to store owners. So in essence Ebay didn't pay for that, TRS did.
