eBay

micromos · ‎06-08-2021

Is it legal for eBay to charge fees on taxes? Also, how are sellers able to predict their revenues on sales when eBay charges a fee (that is hidden) on sales tax since sellers can't predict who from which state will be purchasing their item? Maybe the answer is to automatically charge a handling charge to cover this. Any business attorneys want to jump in on this strange/smokey policy?

lgkills_77 · ‎07-25-2021

I so Agree! Hope they get Sued Up the A**!

femmefan1946 · ‎07-25-2021

I guess you have never run a B&M shop.

All the credit card companies (and accumulators like Moneris) charge fees on the entire payment.

So if I sold $100 and the buyer paid 13% sales tax or $113, the credit card company charged me 2% of $113 ($2.26) as their fee for processing the payment and guaranteeing the credit card payment was valid.

I think we got our first merchant card account circa 1979 or 1980. And our first merchant debit card account around 1992- we were part of beta testing debit cards in Canada.

So this is a Standard Practice and has been for decades.

maxine*j · ‎07-25-2021

@femmefan1946 wrote:
I guess you have never run a B&M shop.

All the credit card companies (and accumulators like Moneris) charge fees on the entire payment.

So if I sold $100 and the buyer paid 13% sales tax or $113, the credit card company charged me 2% of $113 ($2.26) as their fee for processing the payment and guaranteeing the credit card payment was valid.

I think we got our first merchant card account circa 1979 or 1980. And our first merchant debit card account around 1992- we were part of beta testing debit cards in Canada.

So this is a Standard Practice and has been for decades.

Yes, total sale which may include merchadise, shipping, handling, surcharges, sales taxes, etc. I've pointed that out on many of these threads, too, but am always met with the objection, perhaps justified, that the cut was never this big. And that is true. To me, though, it's just one more cost of doing business, and easily accomodated. On-line selling is still a doddle compared to operating a B&M.

=

forward-motion · ‎07-25-2021

WHO CARES!

You should be rejoicing that you do not have to handle the sales tax, and the small fee you pay is well worth the hassle!!

micromos · ‎07-25-2021

Just raising my prices!

Anonymous · ‎07-27-2021

The 2% in your example is nowhere near the 12%+ that ebay charges to "process" that sales tax amount. The solution is simple, I will vote with my feet once I reach the threshold.

3bayuser1 · ‎08-09-2021

It's not what is "legal", but what is the right thing to do. We are buying a service from eBay. We are their customer, and they are not treating us fairly. I'm fine paying a fee on the final value of the item we sell. The sales tax is a seperate transaction between eBay and the BUYER. We are never in control of those funds, however we are paying an additional fee on that transaction. The same could be said for the cost of the shipping charges purchased through eBay. We should only be paying eBay for the actual funds we receive on a transaction.

Some may find ways to justify what eBay is doing, and it may be "legal". But is that the best way to treat their customer?

downunder-61 · ‎08-10-2021

Most sellers look at it as a small admin cost to pay to have eBay collect and distribute the sales tax for them.

I agree all the different states charging differently must be a headache, at least over here it is 10% country wide, so no guessing games.

Also over here we have paid FVF on tax since GST was introduced (many years ago) as it is automatically factored into our retail/sell price both online and in B&M stores.

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zestycollectibles · ‎08-19-2021

The best thing you can do as a seller is put it all on eBay. They love being disingenuous and tacking on fee's to everything under the sun like a bunch of robber barons. Makes no sense to charge a final value fee on taxes, it's legal but absolutely **bleep** concept since sellers don't claim a profit on it, the state does. Love to see eBay charge a fee on giving the state their tax and see how that goes!

Ultimately, all you can do and I believe in it at this point is put it on the buyers. I don't want to but I up-charge more for my items compared to other competitor sites for my goods. This is not desirable but this has a purpose and that is to put visibility on eBay's poor practices. I simply state in auction that eBay now charges profit on sales tax which is not a profit I make, so therefore I have to pass it on and I increase my prices adopting a policy if it sells cool, if not no biggie it can sit. Eventually if everyone adopted this method, eBay would probably be forced to change because buyers would stop buying and go elsewhere, eBay would see their sales go through the floor. I highly recommend it because money is the only thing that will make eBay not be a **bleep**. Money talks and bullsh_t walks so they say.

A shame because eBay use to be awesome but it's become the highest priced items for anything I buy nowadays when I browse. Every time I look on another site for the items I buy, I can find it cheaper. Sellers already are raising prices to deal with it. It is what it is...as sellers, at some point we have to let them drop off their own cliff. Easy for hobby-users like myself, not so much for career dependent sellers.

davicarm_0 · ‎08-21-2021

this is a final value fee this is not a selling fee

like a credit card we only pay ebay $0.30 per order

rareget.store · ‎08-24-2021

I too found it to be a hidden ebay fee when I calculated that ebay was charging fees on sales tax. Facebook market place has much better fees (5%, and no fees on tax) and great for popular items. But need another place to sell specialty items, will need to try Mercari.

dbfolks166mt · ‎08-24-2021

The ecommerce sales tax laws that states began to put in place after the 2018 Supreme Court decision in South Dakota v. Wayfair, Inc. has been a loose/loose/win situation for eBay/Sellers/States.

For eBay they lost by having to expend resources on collecting and remitting sales taxes to each state as they implemented their individual tax laws a lot of which are very complex and include not only the state sales tax but municipality and/or other additional taxes on top of the state tax. Florida was the most recent state to pass their version of the sales tax law.

Sellers loose because of the FVF eBay charges on the sales tax collected from the buyer and, as you stated, the inability to determine which state the item will be sold to and what the tax rate is. About the best a seller can do is add a handling fee based on some average state tax rate to their cost which is not an optimal model.

The winner has been the additional sales tax revenue the individual states are collecting. Unfortunately this has prompted a lot of buyers to look elsewhere when purchasing items especially things that can be purchased in B&M stores. With the opening back up of the economy in the wake of the reduction of the COVID restrictions a lot of buyers that were using eBay and other ecommerce sites during the lockdowns are finding better value elsewhere. In addition a lot of states have different sales taxes for different products and I am not confident eBay's sales tax collection formula takes this into consideration.

As a side note while PayPal was also charging fees on sales tax collection, and still are, the impact was less severe since many of the states did not have the ecommerce sales tax laws in place until after the Supreme Court ruling and a lot of sellers had been moved to MP by the time the laws started to be put in place.

go-bad-chicken · ‎08-25-2021

@dbfolks166mt wrote:
The ecommerce sales tax laws that states began to put in place after the 2018 Supreme Court decision in South Dakota v. Wayfair, Inc. has been a loose/loose/win situation for eBay/Sellers/States.
For eBay they lost by having to expend resources on collecting and remitting sales taxes to each state as they implemented their individual tax laws a lot of which are very complex and include not only the state sales tax but municipality and/or other additional taxes on top of the state tax. Florida was the most recent state to pass their version of the sales tax law.
Sellers loose because of the FVF eBay charges on the sales tax collected from the buyer and, as you stated, the inability to determine which state the item will be sold to and what the tax rate is. About the best a seller can do is add a handling fee based on some average state tax rate to their cost which is not an optimal model.
The winner has been the additional sales tax revenue the individual states are collecting. Unfortunately this has prompted a lot of buyers to look elsewhere when purchasing items especially things that can be purchased in B&M stores. With the opening back up of the economy in the wake of the reduction of the COVID restrictions a lot of buyers that were using eBay and other ecommerce sites during the lockdowns are finding better value elsewhere. In addition a lot of states have different sales taxes for different products and I am not confident eBay's sales tax collection formula takes this into consideration.
As a side note while PayPal was also charging fees on sales tax collection, and still are, the impact was less severe since many of the states did not have the ecommerce sales tax laws in place until after the Supreme Court ruling and a lot of sellers had been moved to MP by the time the laws started to be put in place.

@dbfolks166mt

IMO alot of EBay seller's grievances with FVF assessed on sales tax has a lot less due to the fact that a fee was assessed on the sales tax portion of the any given transaction but rather that the fee that eBay does assesse on a buyer's sales tax, is a variable rate and category dependent.

Here on eBay a sneaker seller will pay 0% in FVF on the sales tax collected, a seller computers will pay 8.7% on the same amount of sales tax collected on behalf of the sneaker seller's buyers, and a book seller will pay 14.55% on the same amount of sales tax collected on behalf of all three of the individual seller's buyers.

A lot of ebay sellers on these community boards like to make statements and conflate other internet marketplace's similar programs to eBay's Managed Payments fee structure. Unfortunately when comes to the collection of sales tax and the fees assesed by those other marketplaces, 99% of the time those eBay sellers dont actually sell anywhere else and have no idea how those fee structures are broken down and what actually ends up happening is that they end up comparing apples to pineapples.

eBay's choice of deciding to charge its sellers a different variable rate on the sales tax portion of any given transaction, based on the type of item that they are selling is completely exclusive to eBay. No other marketplace that I know of or sell on charges its sellers different rates for sales tax collection.

Amazon which could arguably be considered the industry's standard charges it's sellers a flat rate 2.9% for the collection of domestic U.S. sales tax, regardless of what type of item their sellers are selling.

Internet sales tax was never going to be a big surprise. How eBay decided to charge its sellers for the collection portion of that sales tax was and still is a big surprise, and will remain so for a very long time to come.

dbfolks166mt · ‎08-25-2021

Will have to agree that is a confusing mess as is the collection of the sales tax. While I don't sell in a lot of different categories and cannot test the assessment of the sales tax many of the states charge different sales tax rates depending on the type of item. There are currently 8 states that have a sales tax exemption for clothing however since that is not an item I sell I am unsure if eBay is collecting sales tax on clothing in those states or if they have the exemption built into their software. If they are charging sales tax not only is the buyer being incorrectly charged but the seller is incurring fees on the taxes.

A lot of this is new, 2018 was the beginning, and hopefully code changes are made by eBay, Amazon and others to correctly assess and collect the tax as well as charging the seller the correct FVF. I tend to ignore it for the most part and simply write off the fees on my income tax the same way I write off the other operating expenses.

primo-sort · ‎10-03-2021

"Payment processors and credit cards" do not get from you 9-17% per transaction. Fees for taxes it is ridiculous. Selling on ebay is no longer profitable, what more useless customer services. They have charged me for 2 months double taxes nobody knows why. Case send to "Special Vat Department" still nobody knows.

7 times has been contacted by chat they promised you can be sure somebody contacts with you and resolve the problem. They contact but never resolve the problem and again contact with the same case and again and again not resolve the problem.