mam98031 • Volunteer Community Member • Buyer/Seller since 1999
@prettywoman-2012 wrote:
@appalachian_sales wrote:
Agree 100% Im in constant reminder every week about managed payments. I'm just a dad who sells to help with my kids racing and to help them with new parts and gear racing dirtbikes is expensive. I don't look at my self as a business but they do apparently selling out of my dining room makes me a business.
Well...you know... I feel for you. Basically, the new tax laws require of everyone to pay taxes when a hobby business reaches the threshold for any of the states under this new law. Only a handful of destination states are still not charging such tax. It would take another, long discussion to explore why eBay, Etsy and Mercari, etc., are collecting these taxes even long before a seller reached the mandatory tax payment threshold. I am not an accountant (where is @Mr. Lincoln when we need him?) so I can only guess that this has to do with the two-way nature of the taxes. And it does not help that, even though the U.S.A. is one country, the individual states all have slightly different thresholds and percentages, not to mention, even within each state there are different jurisdictions tax-wise, so the percentage may depend on where the buyer lives.
From the buyer's point of view (whether you are a business entity or just an occasional hobby seller), the tax they pay during check-out, it is considered a USE TAX. From the seller's point of view, when they sell something and the buyer pays tax, it is considered a SALES TAX.
So, why you may not have an obligation to declare the sales taxes you have collected as a seller on your sales that went to say, Oklahoma, the buyer who purchased from you may have an obligation to declare the use tax within the state of Oklahoma (just shooting in the dark, using one state as an example).
I maintain my opinion posted several times before, that the tax collection is the task of the Marketplaces now, and not the seller's task. For eBay etc. to run the taxes through the seller's account is one thing, and perhaps it has to do with logistics (it is easier to exhibit the taxes within the context of the Order number assigned to the transaction, for not just the sake of charging tax but also for the sake of refunds).
However, eBay (Etsy) etc. do not stop there, at the administrative level. They take other steps, which COST the sellers money in that they
(a) consider the total payment the seller's "revenue" and
(b) they allow PayPal to charge a payment processing fee through PayPal on the entire payment amount which is paid by the buyer and not the seller, even though the seller never gets the actual tax portion of the payment, and
(c) starting with July 20, 2020 eBay Mthey will charge also charge a 12.35% Final Value Fee on the entire amount the buyer pays, including the item price, the shipping and the tax portion of that payment, in my two main categories, Clothing and Jewelry.
MFLs place the thresholds on the Marketplace NOT the individual sellers. Which is why they created the laws. 80% of Ebay's sellers are small and medium sellers. So without the MFLs, states would be losing a great deal of revenue because chances of many of us reaching these thresholds on our own are slim to none.
It doesn't matter what we may call ourselves on Ebay, every transaction on Ebay is a business transaction. There are no personal transaction on the site. it is all business. Sell one item or 1,000. It's business. Even IRS recognizes hobby income as a business.
ALL money processors charge their fee on the total amount of money they process. They do not distinguish or reduce it by sales tax, shipping or anything else. This is just not unusual and is very much the normal for these services.
No money processor reports a sellers "income" to IRS on a 1099K. That is not the purpose of a 1099K. They report Gross Receipts which is not the same thing. It is up to the person / business that receives the 1099k to keep track of the proper deducts that need to be subtracted from the Gross Receipts to arrive at net income to be reported to IRS. The Schedule C form and the instruction pamphlet further explains this. But per the IRS rules, money processors have to report the total money process for any given sellers without regard to deductions for cancellation, refunds, taxes, etc.
However the FVFs on Sales tax, I'm with you on. I don't know of any other site that does that.
@prettywoman-2012 @appalachian_sales
Also, as I mentioned earlier, eBay currently only discloses the fee structure of MP for store subscribing sellers. For sellers like me, who has no eBay store, the actual percentage to be charged come July 20, 2020 is going to be higher than for those who have a store.
I posted the store fees etc. here the other day, but that post is no longer visible, not sure why.
This is inaccurate. There is a policy page for store seller and one for non store owners. You just can't access them unless you are currently in MP or have registered to go into MP in July. These links have been shared on several threads that I know you've been on. But here they are for your ease.
https://www.ebay.com/help/selling/fees-credits-invoices/selling-fees?id=4822
https://www.ebay.com/help/selling/selling-fees/store-fees?id=4809
I did that because mam kept referring to 9% something percentage, which does not seem to be present anywhere in the categories I am selling in, instead, there is a 12.35% FVF listed for Clothing and Jewelry for store sellers - as mentioned above - which is lower than what I would actually need to pay, without an eBay store. I just could not figure out where that 9% something came from that she kept using for her calculation of examples.
The 9 something is 9.15% which is a rate charged to some store owners depending on their level. Over the various threads you and I have been on I've given you examples of fees on both store owners and non store owners. So it is unfortunate that there is still some confusion on this subject.
