Sales Tax SCAM!

[tottie7777]

What a scam!

Not only is it spurious that Ebay collects sales tax - but it does so in a manner to enrich its' sister Paypal.

The sales tax is collected from the buyer.

Ebay sends that sales tax to the seller at paypal.

PAYPAL DEDUCTS A FEE ON THAT SALES TAX along as a sales total!!!!

Ebay gets the sales tax back to pay the states IF it wants and if anything is due (which is another question/scam).

PAYPAL KEEPS THE FEE ON THE SALES TAX!

YOU PAY FEES FOR EBAY TO COLLECT SALES TAX!!

So one has to calculate the sales tax, add an amount onto shipping or the goods to TRY and cover the ever increasing fee for those sales taxes.

Ebay shoud/could just keep the sales tax and pay it out direct to states. Adding the amount to the sale and allowing its partner Paypal to collect on that amount too is a pure scam. Something has to be done. Class action?

[wint_5631]

Any person in the US can pro se a case and RICO may be the way to handle this.

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https://www.fbi.gov/contact-us/fbi-headquarters

I'm sure they will be glad to jump on the case and make thousands of arrests

[mrdutch1001]

This internet tax is a government thing not an eBay thing. This internet sales tax is something  your country 's states governments have adopted as law.  eBay is abiding by the law - eBay has no choice in this matter.... ALL online selling venues will be forced to collect the sales taxes for all internet sales. Since This is not eBay's doing, any complaining ought best to be taken up with government representatives.

[mrdutch1001]

This isn't about eBay...this is a law that eBay has to abide by and it just so happens eBay is using PayPal to funnel the taxes through to process them... Managed Payments will most likely have a different approach but in due time sellers will be having their monies processed by Managed payments and the sales tax will be dealt with accordingly. Also keep in mind, this doesn't just involve eBay...this is for all internet sales no matter what the venue. However, other venues may approach the collection of the taxes in a different manner.

All selling venues will approach this collecting of sales taxes in their own manner and that process may not be any better than what eBay has chosen.

[mrdutch1001]

Restricting sales to specific states harms no one but yourself. So if you feel that is the answer, guess sales aren't that important to you.

[mrdutch1001]

the sales tax has nothing to do with the seller or where the seller is located...the sales tax is processed on the buyer's end= where the buyer is located.

[wint_5631]

Tottie seems to have sales tax and income tax and the various fees so convoluted in their mind that it's pointless to try and sort them out

[mrdutch1001]

Apparently a lot of misunderstanding and misconception about the subject matter...

I am not even in the USA and I understand the process!

[wint_5631]

I bet you took the time to educate yourself though. So many read the first paragraph on a subject and consider themselves expert's

[vixtr1]

I want to know why we are paying final value fees on the tax collected.  I understand the tax is in the total collected from the buyer, but it should be deducted before our fees.  It is not our money.  Paypal should be deducting the tax also prior to fees.  So we are being forced to pay for the extra work the law is creating for these companies.

[mrdutch1001]

Yes, it's just part of being an online seller. I don't like the way this internet tax affects those of us from outside the USA, but I understand why the US states governing bodies have put this in place. I also don't like the way it is being processed through PayPal, and I do believe eBay should have found a better way of handling their collecting the internet tax...

but I can't worry about something out of my control.

As sellers, we either adapt to these changes or we move on...

[mam98031]

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@vixtr1 wrote:

I want to know why we are paying final value fees on the tax collected.  I understand the tax is in the total collected from the buyer, but it should be deducted before our fees.  It is not our money.  Paypal should be deducting the tax also prior to fees.  So we are being forced to pay for the extra work the law is creating for these companies.

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Your state's MFL is effective January 1st, 2020.  So up until the beginning of the new year you were suppose to be collecting and remitting sales tax to your state on any sale you made within your state.  

That money when you received it technically wasn't your money either.  You were just holding for your state until you filed your report with them and sent the money to them.  But you were charged the PP FVFs on the money.

It is no different now other than it is more states than just your own.  I don't like it either.  But money processors charge their fees on total amount processed.  They don't break it down to what the payment was for to arrive at their fees.

[mam98031]

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@02shadow1100 wrote:

Stop selling to these States.

Certain states have enacted economic nexus standards, which requires businesses that have a selling connection to that state other than a physical presence to collect sales tax on remote commerce. These states include:

• Alabama
• Hawaii
• Illinois
• Indiana
• Kentucky
• Maine
• Maryland
• Massachusetts
• Michigan
• Minnesota
• Mississippi
• New Jersey
• Nevada
• North Dakota
• Ohio
• Oklahoma
• Pennsylvania
• Rhode Island
• Vermont
• Washington
• Wisconsin

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@02shadow1100 

You missed a few.  There are 38 states.

https://www.ebay.com/help/selling/fees-credits-invoices/taxes-import-charges?id=4121#section4

[myangelandmyprincess]

And that list has Mississippi which isn’t one yet according to the link.

By the  way my quote button on the boards has disappeared is there a new way to quote ?

[na-6695]

@Anonymous

You don't have to be a business to be subject to sales/use taxes. And yes, any money you receive in exchange for goods or services, be they new or used (Goodwill comes to mind) is subject to sales/use taxes. Technically you have been required to report and pay that tax when filing your state income tax return (depending on which state you live in). Obviously most folks don't report it.

As for the $20k before it's taxable: ALL income is subject to income tax. What the $20k threshold refers to is when PayPal (or any payment processor) is required to file a 1099-K with the IRS regarding the amount of money they have processed on your behalf. There are two requirements that must be met before they are required to issue the 1099-K: you must have 200 or more transactions AND $20k or more in sales. This is to report your income to the IRS and is separate from any new requirement regarding sales taxes being collected.

If you haven't been reporting your income then technically you have been avoiding paying income tax on that money. This gets deeper in regard to filing Schedule C Business Income. What you can do there is deduct the cost of goods sold. Again, that's a whole 'nother topic but one to keep in mind.

As for your customers being charged sales tax, that's something totally out of yours and eBay's hands. And as others have already stated, paying the 2.9% payment processing fee on the sales tax is something that has been taking place forever in brick and mortar stores as well as online entities that have an economic nexus with those states.

As for paying sales tax on the private party sale of a vehicle, it used to not be that way - until states figured out they could collect the sales/use tax because you cannot avoid registering your vehicle. 
Further, if 3 cents on the dollar paid for sales tax (a few pennies per transaction?) is going to break you, I suggest another way of selling your items such as FB marketplace or craigslist - any venue where you meet people face-to-face as that's the only way to avoid your customers having to pay sales tax and you being charge the few extra pennies on the transaction.

Example: $20 item x 8% sales tax = $1.60  x 2.9% payment processor fee (on the sales tax) = $0.05 additional fee it costs you on the tax collected. Your customer has to pay $1.60 in tax on your $20 item but you only lose 5 cents. Who do you suppose has a bigger complaint in this scenario?

[mam98031]

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@myangelandmyprincess wrote:

And that list has Mississippi which isn’t one yet according to the link.

By the  way my quote button on the boards has disappeared is there a new way to quote ?

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It is the new format.