Sales Taxes being collected by Ebay

[spddiecast]

I was wondering how everyone feels about having Ebay collect the sales tax for states that have a sales tax requirement for online sales. The standard requirement is that there is a nexus in the state. Ebay is not the seller of the items, we the sellers are. Ebay acts as an intermediary. They are only required to collect sales tax in the state of California, where they have a nexus. hey have taken it upon themselves to collect sales taxes for other states which boosts the fee that PAYPAL gets for collecting this sales tax. Ebay does not offer any method to OPT-OUT of having them collect these sales taxes. In NY State, the NYS Dept. of Taxation and Finance requires that anyone selling a product or service must obtain a certificate of authority to act as an agent to collect sales and use taxes in the state. I do not believe that Ebay has any authority to collect the sales taxes except for California. I think the only reason they have done this is to increase the FEE for processing the additional amount. This needs to be resolved.

[nobody*s_perfect · Accepted solution]

The nexus concept does not apply.  eBay is collecting sales tax on behalf of states that have recently implemented "Market place facilitator" laws.  eBay is the marketplace facilitator, so they must collect and remit sales tax on sellers' behalf for items that are shipped to the 35 or so states that require it. This is not something that eBay has taken upon themselves; those states require it.

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

For buyers: https://www.ebay.com/help/buying/paying-items/paying-tax-ebay-purchases?id=4771

https://community.ebay.com/t5/Announcements/UPDATE-Ongoing-Changes-in-How-Internet-Sales-Tax-May-Imp... 

[luckythewinner]

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@spddiecast wrote:

I was wondering how everyone feels about having Ebay collect the sales tax for states that have a sales tax requirement for online sales. The standard requirement is that there is a nexus in the state.

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Your idea of the "standard requirement" is a year out of date. 

In 2019, the Supreme Court ruled (in South Dakota v. Wayfair, Inc.) that states can collect sales tax for online transactions being delivered to that state regardless of the seller's nexus.

Since then, all but ten US states have enacted "marketplace facilitator" laws that require eBay and other online venues to collect sales tax based on the delivery address and remit it to the states. 

In other words, eBay is now required to do this by law: 

https://blog.taxjar.com/marketplace-facilitator-explained/

[cynthealee2]

My feelings?

Thank God eBay does it and I don't have to keep up with it.

[ittybitnot]

Thank God eBay does it and I don't have to keep up with it.

Yes.  Have no fear, however, since starting in July it appears for those in the 'managed payments' program ebay will be collecting a final value fee AND a payment processing fee on this amount from the SELLERS.  

[cynthealee2]

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@ittybitnot wrote:

Thank God eBay does it and I don't have to keep up with it.

Yes.  Have no fear, however, since starting in July it appears for those in the 'managed payments' program ebay will be collecting a final value fee AND a payment processing fee on this amount from the SELLERS.  

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Yeah... Managed Payments is a whole other ball of wax... and when I get shoved into it I won't be selling anymore as my dollar items are suited to that fee structure.

[go-bad-chicken]

I don't have a a problem with eBay collecting sales tax for the 38 states that require sales tax to be collected.

I do however have a big problem with the fact that eBay wants to charge me 14.35% starting July 20 in order to collect that sales tax. 

THAT'S NUTS!

[buyselljack2016]

Staying on subject.

I am as "happy as a clam at high tide" that I no longer have to worry about the sales tax.

[cynthealee2]

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@cynthealee2 wrote:

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@ittybitnot wrote:

Thank God eBay does it and I don't have to keep up with it.

Yes.  Have no fear, however, since starting in July it appears for those in the 'managed payments' program ebay will be collecting a final value fee AND a payment processing fee on this amount from the SELLERS.  

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Yeah... Managed Payments is a whole other ball of wax... and when I get shoved into it I won't be selling anymore as my dollar items are suited to that fee structure.

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OOPPS missed a word there... lets try again

Yeah... Managed Payments is a whole other ball of wax... and when I get shoved into it I won't be selling anymore as my dollar items are NOT suited to that fee structure.

There all better now.

[spddiecast]

The law is on the side of Ebay for sales tax collection. The only dispute I have is ebay's policy states:

"Once eBay starts to collect tax in the above states, no action is required on your part, and there will be no charges or fees for eBay automatically calculating, collecting and remitting sales tax. The collection process will apply to all sales, whether the seller is located in or outside of the United States."

So why are we paying the 11.5% on the sales tax for managed payments? When I calculate the 11.5% on my gross sales amount it doesn't add up correctly. I have a sale totaling $14.13 which includes $0.44 sales tax. When I calculate the final value fee on $14.13 x .115+.30= $1.92. When I check the amount on the seller hub it says $1.93. The $1.93 includes 11.5% on the 0.44 sales tax. So Ebay is in violation of their own policy. Looks like they are charging a fee to collect and remit sales tax to me.

Any Ideas?

[slippinjimmy]

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@spddiecast wrote:

So why are we paying the 11.5% on the sales tax for managed payments? When I calculate the 11.5% on my gross sales amount it doesn't add up correctly. I have a sale totaling $14.13 which includes $0.44 sales tax. When I calculate the final value fee on $14.13 x .115+.30= $1.92. When I check the amount on the seller hub it says $1.93. The $1.93 includes 11.5% on the 0.44 sales tax. So Ebay is in violation of their own policy. Looks like they are charging a fee to collect and remit sales tax to me.

Any Ideas?

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Yes.......lookup "rounding"

As far as eBay's statement, it was from more than a year ago and applied at that time under the old MP fee structure where fees on sales and fees on payment processing were completely separate.

When eBay announced the new fee structure in May everything changed.

If you ever make a statement about "I will do x", do you feel that is something you have to stand by for the rest of your life or do you feel that at some point in the future you can make some changes to your statement.

[buyselljack2016]

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@spddiecast wrote:

The law is on the side of Ebay for sales tax collection. The only dispute I have is ebay's policy states:

"Once eBay starts to collect tax in the above states, no action is required on your part, and there will be no charges or fees for eBay automatically calculating, collecting and remitting sales tax. The collection process will apply to all sales, whether the seller is located in or outside of the United States."

So why are we paying the 11.5% on the sales tax for managed payments? When I calculate the 11.5% on my gross sales amount it doesn't add up correctly. I have a sale totaling $14.13 which includes $0.44 sales tax. When I calculate the final value fee on $14.13 x .115+.30= $1.92. When I check the amount on the seller hub it says $1.93. The $1.93 includes 11.5% on the 0.44 sales tax. So Ebay is in violation of their own policy. Looks like they are charging a fee to collect and remit sales tax to me.

Any Ideas?

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Ideas?  Yes.   The policy changed. They are including the sales tax in the "simplified fees" as of 9/1/2020

[jmgbdg]

As a buyer and not a seller in a state that just started collecting this, I can tell you it will have a significant impact on my buying habits.  For one thing, I am being charged a rate of between 9 and 11%.  My state sales tax is 4.225%.  So what in the world am I being charged for. I'm not even sure if I am also being charged tax on the shipping cost or just the item.  No explanation on ebay I could find.   I never minded paying shipping costs if they were reasonable and you at least know up front what you are getting into on that.  I think ebay needs to also advise buyers what amount of tax they will be charged on the total as well.  Right now I have to figure I'm going to have to add 10 percent to the final total, and yeah, that tips the scale on a lot of purchases or bids already.  

[nobody*s_perfect]

You should be charged the same percentage sales tax through eBay as whatever the rate would be if you had purchased the item locally.  Some states allow local municipalities to add surcharges onto the basic state-level rate.  If you live in one of those states, you need to set up your address with the full ZIP-Plus-4 so you aren't charged a higher rate.

Likewise, some states charge sales tax on shipping and others don't.

[kh-stanley1]

Hi everyone,

Due to the age of this thread, it has been closed to further replies. Please feel free to start a new thread HERE if you wish to continue to discuss this topic.

Thank you for understanding.