Why do Final Value Fees include Sales Tax?

[amazingabe]

This is unfair and very anti business. In a large way...stealing money from the little guy. Ebay is a billion dollar enterprise? So why steal money This way? There is NO value of the used item by the way of added the tax to the total value. When will wealthy corporate men and women have enough? There are other up and coming reseller sites coming up and soon they will start to bite your market share. To many examples of corporate greed and their fall from grace is littered in our history to ignore this. Stop the practice. I like ebay. But I cannot make enough money to make the effort I will and have joined others and soon as the years go by they will collectively take over and eBay will be a foot note in history. Like the others. 

[theteamsetguy]

No, its been at least a year  since the last sellers in the US were moved to MP.

[monroe67]

joliztoyco says:  "They said "We will now be adding a 12.9% to process your sales taxes."
. . . .
There are sellers in states without sales tax that have a vast advantage over most of them. Not only do they NOT have to charge sales tax...they don't have to pay 12.9% more in fees on it. And it shows up in their prices AND profits!! 

. . . .

But I do. Which is why I'm dead-set against the 12.9% enrichment of Ebay's coffers....."

That percentage you mentioned three times there is now obsolete.  
Yesterday, February 15, 2023, eBay increased its Final Value Fees (FVFs) by 0.35%, less than one-half of one percent.  
Categories which did (past tense) carry a FVF percentage of 12.9% now carry a FVF percentage of 13.25%.
Plus 30 cents per order, of course.  That part of the FVF did not change.  
And some categories' FVF percentage did not change at all. 

That middle part of the quote I pasted, though:  "There are sellers in states without sales tax that have a vast advantage over most of them. Not only do they NOT have to charge sales tax.." 

That is just plain wrong.  

No eBay seller charges sales tax.  Sales taxes are charged by the state government, county governments within the state, city governments with a county, and other governmental entities such as, maybe, school districts or fire departments or water control agencies.  

Sales taxes are paid by the buyers.  Sales taxation has always been this way and probably always will be this way.  Buyers on eBay pay the exact same percentage of sales tax for Things they buy on eBay that they would pay when they buy t-shirts or toilet paper at Walmart.  The sales tax is added into the total that the cashier at Walmart tells those buyer they have to pay before they can leave the store with their t-shirt.

An eBay seller who lives in Delaware (no sales tax) who sells to a buyer in Texas will see that his/her buyer (in Texas) has to pay sales tax.  This is because Texas requires their residents to pay sales tax on taxable things they buy, whether they buy those things at Macy's or on eBay. 

Moreover, did you know that Texas also charges sales tax on shipping costs, including USPS postage or FedEx costs?  You, as an eBay buyer who has your purchases delivered to you in Texas, have to pay sales tax on the postage needed to send your eBay purchases to you! 

(Texas sure charges a lot of taxes !!)

Which means that that seller in Delaware is charged by eBay (probably) 13.25% of all that sales tax that Texas requires.  If that seller in Delaware has sold a guitar, the FVF is 6.35% now.  If that seller in Delaware sells jewelry, the FVF is still 15%.   

If anything, eBay sellers in Delaware, Alaska, Montana, Oregon, and Vermont are at a disadvantage; they have a worse "bite" taken by eBay when they sell to buyers in areas with high sales taxes (such as Los Angeles) or states which tax postage. 

Funny, though; I don't recall ever reading a griping post from a seller in any of those states  specifically complaining about this.   Maybe because they realize they can buy any Thing on eBay, from any seller in the United States or possibly anywhere, at exactly the price that is shown, and, as buyers, they don't have to pay sales tax on that Thing or on the postage.  

[doc-holmes]

Ebay chages it because they can. 

"Stealing from the little guy" is the foundation upon which capitalism was built. 

[espresso_warehouse]

eBay is convenient and fun for some of us, but the fees on sales tax are hilarious. If the market tolerates it, they will continue to test those limits.

The platform has been improving recently. So keep in mind that an efficient marketplace could be worth the price even if it does not seem so at first glance.

[theteamsetguy]

@doc-holmes ,

How is picking on the little guy when everyone pays the sale fees to eBay?

[amazingabe]

The question is WHY if and item is sold for 5 dollars with all the other fees ebay has is reduced my actual profit,  including the value of the 5 dollar item. But when Ebay base their value not on the full selling price of 5 dollars they value the item 5.25 instead. A 25 cents tax added to the valuation and now I am paying the final ebay fee based on 5.25 instead of 5 dollars I received. The .25 cent is a tax I must pay reguardless to the state now I am paying ebay additional tax and more fee money on money that is NOT what I got but what ebay wants to add.  Another way to steal money from the little guy. Stop the practice. I was with ebay for over 20 years fees came and stayed some where deleted. This is NOT good or fair. No insertion fee but added tax value is its replacement. 

[amazingabe]

I have been doing business for 37 years and retired and sold my business. You sound like a typical. I know a added line on the sheet when I see one. You should not be answering any questions of actual customers. Your answer is not encouraging nor even confident. 

[amazingabe]

Sales tax is new since the government wanted to grab taxes from us already. And got it by law some years back. Now ebay wants to collect additional fees base on added value they themselves placed on it? Isn't it enough the state take a piece of my sales but not ebay wants to do the same? 

It is a very TIRED arugument about writing off expenses on your taxes. It is a lie. Most ever make enough to justify a write off just selling a few items.

• If you earned $600 or more in nonemployee compensation from a person or business who isn’t typically your employer, you should receive a Form 1099 
• If you earned $600 or more in rent or royalty payments, you should receive Form 1099 Misc
• If you received a state or local tax refund during the previous year, you should expect to receive form 1099 G

Likewise, if you paid a freelancer, independent contractor or other non employee $600 or more during the year related to your trade or business, you likely should send them a Form 1099-NEC.

[amazingabe]

True but sale to sale points on used items we have paid taxes on over and over again. Why should we one penny more?

[amazingabe]

The point is not a business lost from someone who did not do their homework about shipping. It is adding value to something you are not receiving to begin with. It is one thing to take out from your profit to reduce it to share in your profit but to add value where there is none and add a fee to it to pay is simply WRONG.

[amazingabe · Accepted solution]

I have no idea what you are talking about.

[amazingabe]

I am 100 percent behind you. And you are right 100 percent. I think I will simply add the additional fees in my item description from now on.  Let the people see the bargin I am offering is being jacked up by ebay. 

[theteamsetguy]

@amazingabe ,

All successful businesses factor in all of their expenses into the prices of items they sell. Otherwise,they will not be in business very long.

[monica-sells]

 You seem like an intelligent person that has been self-employed for years, but this statement is not correct...

"...The .25 cent is a tax I must pay reguardless to the state now ..."

You do noy pay the .25, your buyer/customer pays this amount for that sale

of that .25 ebay gets appx. .025 cents to process and file that sales tax for you.

I am paying ebay additional tax and more fee money on money that is NOT what I got but what ebay wants to add..."

eBay has NO CHOICE but to add sales tax...it is mandated by law

"...but sale to sale points on used items we have paid taxes on over and over again. Why should we one penny more?..."

Think used cars...everytime they are resold, the buyer pays state sales tax.....

Since these stipulations/fees/policies are all spelled out for me prior to selling, I have no problem with them. It is the environment I choose to sell in. I don't necessarily have to agree with them, but I have to adapt and accept them.

Whats a "typical?"
LOL

[coolections]

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@monica-sells wrote:

lets be factual

@monica-sells   

Ok, thank for you info but you forgot to say how much you LISTED the item for. I will be factual for you and use your numbers as an example for a typical sale.

$40.00 Listed asking price for item

$11.11 shipping paid by buyer

$51.11 + $3.31 buyer paid tax = $54.42

Ebay charge = $7.57

$40.00

- $7.57 ebay charge

$32.43 net profit

% cost you to sell your $40 item = 18.925%

Now if we had something heavier say $22 shipping your fees would increase:

$40.00 listed asking price

-$9.03 ebay charge

$30.97 net profit

% cost you to sell your $40.00 item = 22.58 %