eBay

mrs_pumphrey · ‎12-01-2019

Sales tax paid by the buyer goes to ebay to remit to the buyer's state. If the seller never has it in their possession, why does Paypal charge the seller a fee (3%) on the sales tax that the buyer pays? If you sell a lot or sell high dollar items, those Paypal fees on the sales tax (that is never your money or ever in your possession) add up and Paypal is making lots of money on them from lots of sellers. Ebay and Paypal are supposed to be separate companies now, so I'm not understanding why Paypal isn't charging Ebay for the fees on the taxes, or why they're allowed to charge any fee at all on sales tax?

Please don't start in with 'ebay has been charging sales tax since January'. This is a different issue.

gwzcomps · ‎12-01-2019

As pointed out in another thread on the high end at 10% sales tax eBay will collect $100 on every $1000 spent. Out of that $100 you will pay $3 in fees. I don't disagree that it is annoying, but admittedly it is better than having to do it yourself. Also if you have a B&M store you would be paying fees to collect tax on card payments regardless.

mrs_pumphrey · ‎12-01-2019

Most ebay sellers don't have a B&M though. I will agree that it is nice that the seller doesn't have to deal with collecting/remitting the tax, but the Paypal fees are charged for transferring the money. Since the sales tax is transferred to Ebay, not the seller, Ebay should be paying the fee, or there shouldn't be a fee.
There isn't any "favor" being done for the seller; the decision to charge sales tax was out of their control, and neither buyer nor seller wanted it. I suppose Ebay could have raised their seller fees to cover their handling, but it was easier to put it on the seller through Paypal fees (which again seems to point out that they are not really "separate" companies), which the seller wouldn't notice at first in their Paypal transactions. (I have to admit to not reading all the updates to their user agreements.)

luckythewinner · ‎12-01-2019

Ebay and Paypal are supposed to be separate companies now, so I'm not understanding why Paypal isn't charging Ebay for the fees on the taxes

It is happening beause Because eBay and PayPal got together and decided that is how the PayPal fee will be calculated.

They are separate companies, but eBay still has plenty of leverage over PayPal. EBay handles about $85 billion in sales, and much that runs through PayPal.

or why they're allowed to charge any fee at all on sales tax?

I suspect this is because there is no law or regulation that prevents it.

Payment processors have been collecting fees on sales tax for years; the only thing that is new and different is that eBay sales are now taxed by most states so eBay sellers are now subject to it.

top5mobile · ‎12-01-2019

eBay should negotiate with PayPal on this for eBay sellers. In the end of the day we're going to have many angry sellers and buyers. Shame on you, eBay.

I have plenty of buyers who are canceling transactions within 1 hour because they're changing mind.

You can't partially refund buyer via eBay platform if you're not on a managed payments program. eBay doesn't accept anyone at this moment to their program. So, you're on your own.

In the case if you're partially refunding money to a buyer, there is no guarantee from eBay they will refund your final value fees. You have to call and ask. The answer every day is different, no guarantee for a refund.

I've called to a concierge customer service, they're saying "Paypal is a different company, we have nothing to do with PayPal". Never mind PayPal is getting payments because of eBay gave them sellers and sellers don't have any other choice at this moment. What a joke! Very very sad situation.

mam98031 · ‎12-01-2019

ALL money processors charge their fees based on the total amount received. PP is doing just what others in the industry do. It is just a cost of doing business.

This isn't however an Ebay issue but a PP issue. Ebay isn't the one charging the fees on this. Ebay and PP ARE separate companies. Why would PP charge Ebay for the fees on sales tax. Sales taxes being charged to a buyer is driven by their respective states, NOT Ebay. Ebay isn't charging sales tax because they feel like doing it, they are required by the various states and their laws.

Before Ebay was mandated by Law to collect and remit sales tax in certain states, sellers were responsible for collecting and remitting sales tax to their respective state. If the seller had their account set up correctly, they had their states tax rate stated in the tax table in the seller's site set up. This enabled the tax rate to be charged to the buyer when they were invoiced and subsequently paid. Sellers when they were collecting their own state's sales tax from buyer have ALWAYS paid PP fees on that amount received. PP has always charge their rates based on the total amount received. This is no different.

If you find that the amount is substantial enough [3 cent on every $10 of sales tax], then you will need to raise your pricing to accommodate the new costs.

For myself. I'm tracking closely the costs of this as well as the new rule of PP not refunding any fees when we refund for any reason, including cancellations. In January when it comes time to revise my listings for the price increases from the USPS changes, I'll decide at that time if I need to raise my pricing by a few cents to cover for these new costs and then adjust pricing at the same time if needed.

mam98031 • Volunteer Community Member • Buyer/Seller since 1999

"I can explain it to you, but I can't understand it for you." Quote from Edward I Koch

mrs_pumphrey · ‎12-01-2019

"PP has always charge their rates based on the total amount received." But, as I've said, the seller does not "receive" the sales tax. It goes to Ebay, i.e., Ebay "receives" it, so it would seem Ebay should be charged the fee, not the seller.
I'm not arguing that this is an Ebay issue, I discussed what Paypal was charging.

loveyourimagination49 · ‎12-01-2019

You received the money, got charged, then it was sent to eBay.

Everyone has options. Just be sure the best option is right for you.

mrs_pumphrey · ‎12-01-2019

3 percent of $10 sales tax = 30 cents.

mrs_pumphrey · ‎12-01-2019

"You received the money, got charged, then it was sent to eBay. " So then is Ebay charged a fee when it is sent to them? Paypal would be making double on their fees for sales tax.

loveyourimagination49 · ‎12-01-2019

I’m not privy to that information.

Everyone has options. Just be sure the best option is right for you.

mrs_pumphrey · ‎12-01-2019

But if they aren't, then being charged for money received doesn't apply.

btjfitter · ‎04-08-2020

A little late to this party but in my state if you make a timely sales tax payment to the state , you get to retain 2% of the payment due. So you pay the service fee to paypal on the tax Ebay collects and then Ebay pays the state and gets to keep a cut. Why does the tax roll thru Paypal in the first place. Ebay is a business, but how much of the cost of doing business will Ebay step up for.

the*dog*ate*my*tablecloth · ‎04-08-2020

They tried to take the sales tax separately so sellers would not be charged. There was a huge uproar from buyers and financial institutions objecting to two separate payments processed through PayPal. Managed Payments doesn’t have to do that because EBay controls the payment.

as of never 4th, this new way of processing in one payment was started. One payment from the buyer but that means the seller pays Paypal fees on the sales tax