Sales tax

[robertandpenny]

Hello.  I was wondering if the 12% ebay is taking out of the sales tax after a sale will come back to me at the end of the year?  Will the money taken out help me pay my income taxes at the end of the year?  Or is ebay  making a 12% profit off the sale tax?  I already believe it is unfair for ebay the take a percentage of the shipping cost.  Please help me.  Thanks.  Penny.

[luckythewinner]

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Hello.  I was wondering if the 12% ebay is taking out of the sales tax after a sale will come back to me at the end of the year?

No. 

Or is ebay  making a 12% profit off the sale tax?

eBay collects a fee on the buyer's total payment, which includes the sales tax. 

Will the money taken out help me pay my income taxes at the end of the year?

Only in the sense that you can deduct the eBay fees as an expense. 

I already believe it is unfair for ebay the take a percentage of the shipping cost

Duly noted. 

[1786davycrockett]

Sales tax is paid directly to the buyer's state -- it is entirely separate from both Federal Income Tax, and the individual income tax of each seller's state.

After the sales tax has been paid to the buyer's state, it obviously will not be refunded to you at the end of the year.

The FVF on sales tax is used by eBay as a processing fee, since eBay is handling all the additional paperwork involved in paying the individual state sales tax entities inside each individual state, of which there are probably 100s -- thus saving sellers a massive bookkeeping  headache.  Would you REALLY rather be forced to spend the time estimating and paying the sales tax on each individual sale YOURSELF -- sometimes when it only involves PENNIES?!?  I sure don't!

[toysaver]

"I was wondering if the 12% ebay is taking out of the sales tax after a sale will come back to me at the end of the year?  Will the money taken out help me pay my income taxes at the end of the year?"

Ebay is a for profit business with stockholders, employees and people that use the platform.  They are not a public utility.  They exist to make money.  The only way eBay will help you pay income tax is by giving you the opportunity to sell and make money.

[lakefor94]

"Will the money taken out help me pay my income taxes at the end of the year"

We are all going to have to help ourselves pay taxes at the end of the year.  

[mrsbmcv77]

I am sorry that everyone felt the need to be so rude with their replies.  A simple, no we do not get it back, think of it as a processing fee.  

Also, do not worry about the self employment tax filing.  I'm confident that your are worried about pennies because you do not profit hardly anything.  I had to file self employment last year.  You are going to be able to deduct so much that the final value fees will not matter.  If most sellers are really tiny, low profit sellers, the government is just going to feel the pinch.  Last year's loss for me totalled more than my 1099.  Just breathe. It will be okay.  Grow until you feel it is no longer worth it.

[soh.maryl]

It's regrettable that you felt that others were rude in their replies.  They were only trying to correct some erroneous ideas the OP had about fees and taxes.  

[dbfolks166mt]

     I assume the 12% you are referencing is the FVF eBay charges on the sales tax. Ebay will not return that fee to you at the end of the year. I consider the FVF on the sales tax to be a bargain. There is no way I would want to be burdened with having to collect sales tax on each sale, keep track of which state it goes to and remit the payments to each state on a monthly or quarterly basis. 

     In addition there are over 10,000 individual state tax laws and the tax rate can vary depending on where the buyer lives in the state and what type of item they bought. Sales tax in Illinois for example can range from 6% to 10%. Simply no way I want that headache to keep from having to pay 12% FVF on sales tax. 

     As for the shipping cost eBay does not "take a percentage" of the cost but they do charge you a FVF on the amount of the shipping if it is not included in the item listing price. Virtually every business operates this way. CC companies charge the merchant on the total cost of the sale which, if applicable, includes shipping and sales tax. 

[monica-sells]

I just want to address this part of the question/statement.....

"...I already believe it is unfair for ebay the take a percentage of the shipping cost...."

ebay had no choice thanks to unscrupulous sellers that took advantage of shipping classifications....

extreme example...selling a $20.00 item for $1.00 and charging $19.00 shipping, thus only being assessed a final value fee on the $1.00 Sale price.

they even tried alternate plans then finally had to just include it in the whole sale.....

as far as charging on the sales tax portion, it is pretty standard across the industry (cc processing) to charge the merchant on the whole sale amount. I like to consider it a fee to handle the distibution of the sales tax to the proper authorities. One less headache for me as a seller. I can see where big ticket sellers find it proportionately unfair (it takes the same time/man-hours to fill .10 sales tax collected as it does to file 100.00 sales tax collected), but that is another debate for another thread