I don't understand why ebay charges fees on the sales tax.

[aerodriguez4]

I understand ebay charging the FVF on the sale + shipping, but the sales tax is neither my money nor ebay's, and it's charged to the buyer. Some people might say they charge it as a processing cost, which is fine, but that cost is not proportional to the amount and it should be a flat fee for every transaction not a %.

That part is not stipulated in the FVF chart, and as a seller you calculate what your asking prices are going to be based on the fees in order to make a profit. This seems like a trick for ebay to squeeze more money out of transactions from something that will easily go over the seller's head.

What I'm tired to the most is not having a concrete number of how much I'm going to see from a sale before I list it.

[reallynicestamps]

All payment processors charge their fees on the money they process, not on the items that made up that payment.

This has been the Standard Practice since at least the 1940s and we personally were paying fees on sales taxes since we got our first merchant credit card account in the early 80s.

Ask the owner of any local shop what he pays to his payment processor (ours was Moneris) to accept credit cards.

You may be shocked.

[slippinjimmy]

Reason eBay charges fees on Sales Tax...........

Because they can and because they like money!

Why do so many sellers complain about eBay charging fees on Sales Tax.....

Because they can and because they like money!

Would the complaining go away if eBay decided tomorrow to eliminate fees on Sales Tax and instead increased the regular fee to 14 or 14.35%?

No, the complaining would not go away it would just change to "14.35%, that is outrageous and nothing other than greed".

"That part is not stipulated in the FVF chart"

Not "in" the chart but right above the chart is this.....

[joseh1445]

There are a lot of things that I don't like at ebay.  But we are at the mercy of ebay.

[mybigsale]

@aerodriguez4 

@reallynicestamps 

Ask the owner of any local shop what he pays to his payment processor (ours was Moneris) to accept credit cards. You may be shocked.

Then, after they answer your question ask them if they collect an additional 10% commission on state tax on top of their 2-3% processing fee. No standard practice their - eBay started charging the additional commission on tax after starting managed payments.  Since eBay sellers embraced that practice - they started earning Sponsored Ad fees on State Tax (and Shipping) since last June. 

[onthescrews]

Fees on payments processed have always included the sales tax, as it’s part of the entire amount processed. I realize for folks not familiar with retail or the restaurant business this comes as a surprise when it’s broken down for them. For what it’s worth, Paypal charged their fee on the total amount also, including sales tax. 

As to not knowing how much you’ll net from a sale you could use 8% as an average-it’s about a dollar more on a $100 transaction. 

[mybigsale]

---

@onthescrews wrote:

Fees on payments processed have always included the sales tax, as it’s part of the entire amount processed. I realize for folks not familiar with retail or the restaurant business this comes as a surprise when it’s broken down for them. For what it’s worth, Paypal charged their fee on the total amount also, including sales tax. 

As to not knowing how much you’ll net from a sale you could use 8% as an average-it’s about a dollar more on a $100 transaction. 

---

Yes, but eBay collects the processing fee PLUS A HEFTY COMMISSION on State Tax.

[deltilogical]

You might consider it a service fee to correctly apply and transmit the sales and VAT taxes on our sales to the buyer's owner.   We enjoyed an open internet for a few years and its over - if you engage in sales on the internet you are engaged in commerce and subservient to the tax authorities.  13% isn't very much to guarantee you 24/7 access to a global marketplace.  

In Vermont a couple years ago the State required sellers in the antique malls to get tax numbers, even though the antique mall handles all the sales tax and transmital of funds.   I'm waiting to hear if they try to force VT ebay sellers to get tax numbers for the same situation. 

[aerodriguez4]

The sales tax depends on the buyer, I can't calculate how much the sales tax is going to be until the item sells, and if the sales tax is somehow my responsibility, then I rather ebay just sends me the money and I'll file it to the IRS myself, pretty sure it's not going to cost me 13% on the amount.

Ebay fees is what's inflating the market on things, then local retailers and people on local marketplaces want to charge that too because that's what it goes for on ebay.

[bigtexasyardsale]

I'm confused, you don't understand, or you do understand?   

Once sellers started selling $100 items for $1 plus $99 shipping eBay started charging FVF on item price plus shipping.

Sales tax ranges from 0 to 9.55% (LA).  So at max your marginal FVF fees are .13 x .0955 or 1.2% of sales.

No offense but if your margins are so slim that the FVF on the shipping cost is a "make it or break it" for you, you may want to rethink what you are doing.  

[aerodriguez4]

I don't mind the fees on the shipping, though they should probably just remove the ability of the seller to set up a shipping charge at this point, and leave it to just auto-calculation based on the buyer's location.

I only mind the fees on the sales tax which varies on the seller and the charge is to them and even more so that they're based on percentage.

I'm sure ebay counts on everyone to not care because it's only "a little bit more", but those little bits add up, and for what? So that ebay can rack up an extra billion here and there?

At the end of the day, as other said, ebay can do and charge whatever they want, just show me what my ends fees are going to be before I list something. At that point is up to me what I do.

[monroe67]

"I don't mind the fees on the shipping, though they should probably just remove the ability of the seller to set up a shipping charge at this point, and leave it to just auto-calculation based on the buyer's location.
I only mind the fees on the sales tax which varies on the seller and the charge is to them and even more so that they're based on percentage."

That second sentence is a little confusing, but -- yes, eBay's Final Value Fees (FVFs) are a percentage of the total amount paid by the buyer.  Since the total amount paid by the buyer probably usually will include some sales tax, then, yes, eBay's FVF includes a percentage of the amount of the sales tax.  

eBay's FVFs also include a flat fee of $0.30 -- thirty cents -- that is charged per order.  

An order on eBay could be any number of things.  As examples, two of my selling ID's recent sales -- one ceramic bud vase and two embroidery booklets which were each listed separately as BINs but bought by the same person.   So eBay retained 30 cents on the sale of the bud vase but only 15 cents each on the two embroidery booklets.  

"I'm sure ebay counts on everyone to not care because it's only "a little bit more", but those little bits add up, and for what? So that ebay can rack up an extra billion here and there?"

I don't think any corporate authority person at eBay is counting on either sellers or buyers not to care what eBay does.  And eBay IS a corporation.  The purpose of a corporation is to make money for the corporation's shareholders.  

"At the end of the day, as other said, ebay can do and charge whatever they want, just show me what my ends fees are going to be before I list something. At that point is up to me what I do."

I doubt that many sellers on eBay can predict the precise dollar amount of what eBay's fees will be at the time their items are listed.   eBay itself certainly cannot show you what the exact "ends fees" will be.   There are just too many variables, too many "unknowns."  

There is no way I can know, when I list a 1970s sewing pattern, (1st of all) whether anybody will want to buy it and then (2nd) whether it will be bought by somebody in Wilmington, Delaware, where there is no sales tax, or to a buyer somewhere in Los Angeles County, California, where sales taxes are 10%-11% or more.  

Are you aware that some states actually charge sales tax on online purchases when the buyer pays the postage/shipping cost separately?  I believe Texas is one of those states.  That's another unknown.  

The best things you can do are:  (1) Know the FVF percentage in the categories you list in.  Jewelry, whether real or "fake", costume jewelry, carries a 15% FVF, plus 30 cents.   eBay will retain only 6.35%, plus 30 cents, if you sell a guitar.  Otherwise, most categories are subject to a 13.25% FVF, plus 30 cents.  

And then, (2), keep an estimate in your head of what the total fee could be.  Some experienced sellers who post in this community estimate eBay's fees around 20%-25% of the item's price.  For myself, I estimate 30%.  Then if eBay keeps less, so much the better for me.  

You may want to do some hypothetical math for yourself, on your own future listings, with high "unknowns."  Maybe estimate $10.00 to send your item to its buyer.  Then estimate somewhere between 8% and 11% as the sales tax.  Then apply the proper FVF percentage (are you selling a star sapphire ring or an acoustic guitar?), and don't forget to subtract the 30 cent flat fee.  But realize that you will only be calculating an estimate.  

[dnasilver]

The OP is suggesting a flat fee instead of a percentage. Not raising FVF. With an unknown percentage you cannot determine your costs prior to sales. eBay knows their costs just as all businesses should. You cannot accurately price an item without knowing your true costs. A flat fee would resolve that issue "such as" 50 cents per sales tax transaction. Then all sellers would be able to determine costs prior to determining selling price. 

[soh.maryl]

1. Since the final value fee is calculated on the item price, the shipping and the state sales tax, it IS proportional.  Let's say you sell an item for $100 plus $10 shipping and the state sales tax in the buyer's shipping location is 10%.  Buyer will pay you a total of $121 and your FVF will be about $12.10.  However, if the same transaction went to a state with only 5% state sales ta, your buyer would have paid you $115 and your FVF would be $11.50.  How is that not proportional?

The reason you cannot determine how much you are going to see from a sale BEFORE listing is that you don't know (a) the potential buyer's delivery address and (b) the state sales tax rate in your potential buyer's state.  Another factor you cannot figure is whether that buyer lives in a state where the state sales tax is collected on the item price AND shipping or only on the item price.  

[soh.maryl]

So you would like to be responsible for collecting and remitting state sales tax for probably thousands of different tax districts?  Just in my location, for instance, my current state sales tax rate is about 6.75%; however, in a large city about 40 miles to the north, it's closer to 8% and in a relative's location about 10 miles to the south, it's more like 6.5%.  Multiply that by similar different sales tax rates in most states.  

That means, if you were handling the collection of state sales tax on your own, you would have to actually know the specific state sales tax rate in any location you might be shipping to.  Incidentally, those change periodically since individual cities can add to the percentage. 

Incidentally, the state sales tax is remitted by eBay, NOT to the IRS (Federal), but to the treasury of the state for which that state sales tax is collected.