WARNING SELLERS! Ebay is adding tax to your sales. You ARE losing sales because of it!

[congamonkie]

I don't mind paying tax in the state I've made a purchase from but to pay a sales tax to my state when I make a purchase from your state is simply WRONG!  Washington State has a GREED that keeps growing.  Ebay is now required to collect my states sales tax on all items I purchase no matter what state their from.    Here's where it is costing the Ebay sellers.  You have an item that I want to purchase.  Guess what. You have just lost a sale because I know Washington State TAX will be added to my purchase at checkout.  Unfair to you-unfair to me.  If I were a seller I would be pretty angry about this practice as Washington State is the only one who benefits from this.  End result is that my purchases on Ebay are now cut back to a very bare munimum.    I just want the sellers to be aware of their lost revenue and Ebay to understand the impact this practice is causing.  

[7606dennis]

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@milehigh3131 wrote:

My state (CO) has literally 100s of different sales tax rates. Different for every town, city, county.

You can search (in quotes) "Colorado Sales Tax Rates by City" to see.

I haven't seen much online as to how that will be 'dealt with'.

Not going to stress out much over it, as I play to phase out my online selling hobby.

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Many states have tax rates that vary owing to local option taxes being added to the state's base sales tax rate.  I can only assume that eBay, as the merchant of record, would have things worked out as to how they will need to conform to each state's statutes.

[computeraidllc]

eBay is collecting for any state that has a marketplace facilitor law. This is law not eBay. eBay has to follow the law. That means any buyer in these states will pay sales tax to eBay and eBay will remit it to that state. Right now it is for 2 states: Washington and Minnesota. By the end of the year it will be for close to a dozen. Any buyer in Washington or Minnesota is paying sales tax to eBay so sales will not go down because every listing has this, not just a few. Also remember that even if eBay doesn't collect sales tax, the buyer is then required to send any sales tax they haven't paid to the state at the end of the year. So it isn't a new tax of any kind. It was owed to begin with. It becomes a use tax.

[computeraidllc]

You might not know this but if you buy something and your state has sales tax on that item and you did not pay it, it is still owed to the state at the end of the year. This is called a use tax. This applies to purchases outside of your state like on Amazon or eBay. This isn't a new tax, it is tax that was already owed by the buyer. I would rather have eBay collect and deal with it than me, the seller.

[computeraidllc]

You might not know this but in the past, if you buy something out of state you still owe sale tax on it, if it is taxed. This is called use tax. My state has had a line on it income tax form that make you check a box if you never bought anything out of state. They have always had a line to report how much you bought out of state. Most people never entered anything their so they added the check box that essentially makes it impossible for someone to make the claim they never saw the line or understood what is suppose to go there for a purchase made outside of the state. If the state ever did an actual audit for that one line, the person can be required to pay the back tax, plus a fine and possible jail time for making a false statement on there tax form. Unfortunately, New York or most states don't do that kind of audit.

[computeraidllc]

It has been in New York for many years. They actually added a check box next to it that says you never made a purchase out side of New York that requires sales tax. If someone had a $0 for sales tax owed and the box wasn't checked it would be an incomplete tax form. If they check it, the tax payer couldn't say they made a mistake by not entering a purchase they made.

[escuintla]

I order something from NY for about $45.xx, I got a bill for $49.xx

I live in California, where Ebay is. Actually, I met some programmers who started at that place.

[myjunqueyourtreasure]

I don't know what the tax rate in MN is, but it's a fact that Washington is one of the states with the highest sales tax rates in the country was one of the first to jump on this.

I've heard NY is one of the highest taxers as well so surprised they haven't done it yet.

[where*you*crowin]

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@cashvaluerecovery2011 wrote:
Its funny that you warn us about this............when the real problem will be when ebay realizes they can force ebay sellers to pay the buyers sales tax and then charge a final value fee on it like they do shipping.

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This bears repeating. While Ebay has stated that they will not be charging a fee to COLLECT the taxes, has anyone heard whether they will be collecting fees for PROCESSING the taxes?  Etsy does through their payment service, which also uses Adyen.

Are there any sellers here that are in Ebay's managed payments and have sold to one of the states where taxes are now collected?  If so, have you paid processing fees on the tax collected?  Likewise, are there any sellers here that have had taxes collected in one of those states and the payment was through PP--have you paid PP any processing fees?

This is yet another factor sellers will need to figure into their prices and may become difficult due to the various tax rates across the country.

[gracieallen01]

Considering that ebay charges FVF on shipping - right, everybody does, of course  - IF there is a way for ebay to legally monetize it, I'm fairly sure, there is a good probability, that they will.

[buzzapparel]

This is only on items that your state taxes in the first place. 

[the*dog*ate*my*tablecloth]

Since Etsy is collecting Marketplace Facilitator taxes that THEY are responsible for it does not make sense that they are charging fees to sellers for this service. I read the Etsy page on internet sales taxes and didn't see anything about fees.

https://www.etsy.com/seller-handbook/article/how-marketplace-tax-laws-impact-state/321914904041

[southern*sweet*tea]

Since fees are charged on the total amount the seller receives, and the seller does not receive the tax payment, then I would imagine that the seller is not charged fees on the tax. 

[autopiacarcare]

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@where*you*crowin wrote:

Are there any sellers here that are in Ebay's managed payments and have sold to one of the states where taxes are now collected?  If so, have you paid processing fees on the tax collected?  Likewise, are there any sellers here that have had taxes collected in one of those states and the payment was through PP--have you paid PP any processing fees?

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Here is what we are seeing so far on sales to WA where eBay has collected the tax.  We are not seeing any additional fees being charged to us by eBay or PayPal at this time in regard to eBay collecting and remitting the tax.  It is basically a separate transaction between the buyer, eBay and eventually the state - the seller is pretty much taken out of the loop.

The first screen shot is what the sales record page in Seller Hub shows - $15.99 item price, free shipping, -- for tax with a note saying eBay collected it.  The PayPal transaction shows the same thing, $15.99 total payment, no tax and the normal PayPal transaction fees based on the $15.99 total.

The second screen shot is from a "Paid and Shipped" Report which was pulled by going to File Exchange - Download Files - Paid and Shipped and selecting the appropriate date range.  This report shows this transaction with a sale price of $15.99, sales tax of $1.44 (calculates out to 9%, which is correct for buyer's address) and a total price of $15.99.  FVF on our invoice is correct for that category based on $15.99, so it does not include the tax.

 

[lacemaker3]

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@southern*sweet*tea wrote:

Since fees are charged on the total amount the seller receives, and the seller does not receive the tax payment, then I would imagine that the seller is not charged fees on the tax. 

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eBay has always specifically excluded sales tax paid by the buyer from the amount that sellers pay final value fees on.

https://www.ebay.com/help/selling/selling-fees/selling-fees?id=4364#section2

...

Final value fees

We charge a final value fee when your item or relisted item sells, or if we determine that you intended to complete a sale outside of eBay.

Final value fees are calculated as a percentage of the total amount the buyer pays, including shipping and handling. Sales tax isn't included.

...

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[the*dog*ate*my*tablecloth]

Yes but the poster who brought it up was talking about Etsy and using them as an example.

I don't believe they charge fees on sales taxes either.