Why is eBay allowed to charge me 12.9% in extra fees for taxes the buyer paid?

[voltagevillage]

Yes, it sounds ridiculous but it's true. If a buyer pays $10 in taxes for an item, I have to pay an additional $1.29 out of pocket in those State taxes towards eBay. I thought it was bad enough eBay digs into my shipping funds for more money but this is insane.  Here's an actual example below of an item I recently sold.

Fees based on

$81.50

• Item price
  $69.99
• Shipping and handling
  $6.00
• Sales tax
  $5.51

Final Value Fee

-$10.51

Variable percentage • Music category

Rate for $0.00 - $7,500.00

$81.50 × 12.9% = -$10.51

[mtgraves7984]

It's really a small price to pay for eBay to gather and remit all the sales tax(es) to the proper states. It's a good thing.

[dbfolks166mt]

     As has been explained 1,000's of times in responses to similar postings. You are correct. I am surprised that as long as you have been selling you are just now realizing this. 

[pburn]

"Why is eBay allowed to charge me 12.9% in extra fees for taxes the buyer paid?"

By using the site, you've agreed to all the fees associated with selling on eBay as disclosed in their Terms of Service/User Agreement. That's why they're allowed.

[the-hook-and-the-loop]

With hyper-inflation happening, your money will only be worth half of what it was last year. Choose your battles.

[pburn]

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@the-hook-and-the-loop wrote:

With hyper-inflation happening, your money will only be worth half of what it was last year. Choose your battles.

---

Aside from the fact that the United States is experiencing nothing anywhere near hyper-inflation, the comment has nothing to do with the OP's questions.

[firesteel_surplus]

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@voltagevillage wrote:

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OK...now let's put it this way...

Would you rather have eBay stop collecting that 12.9% fee on the tax and YOU collect the tax on literally 1000s of various state/city/village/towns across the US which would be a ***bleeping*** nightmare and then YOU would most definitely have something to complain about.

OR

Would you rather have eBay charge that 12.9% fee and have the cheapest bookkeeper you could ever hire and just let them keep collecting the tax and remitting on YOUR behalf?

Think about this carefully....

Mike

Firesteel Surplus

[alcoforever]

If ebay did not charge 12.9% on the tax, ebay would raise the FVF to somewhere in the neighborhood of 15-16%.

Bottom line:  you gonna pay what ebay wants you to pay.

[doc-holmes]

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@pburn wrote:

---

@the-hook-and-the-loop wrote:

With hyper-inflation happening, your money will only be worth half of what it was last year. Choose your battles.

---

Aside from the fact that the United States is experiencing nothing anywhere near hyper-inflation, the comment has nothing to do with the OP's questions.

---

Unfortunately hyperbole is now the order of the day. This stuff always reminds me of the Bear Patrol episode of the Simpsons... 

Homer: "Bear patrol tax! This is an outrage! It’s the biggest tax increase in history!"

Lisa: "Actually, Dad, it’s the smallest tax increase in history." 

[firesteel_surplus]

@voltagevillage 

This has absolutely nothing to do with the question but...

I want to remind the OP (and everyone else) that the 12.9% in fees are also a tax deduction as an ebay expense on your Schedule C for tax season. This also works in conjunction with that dreaded and greatly feared 1099 that causes such an upheaval here as the "threshold."

The 12.9% helps bring that amount down that is reported on the 1099.

I think there are a lot of sellers here that don't understand the big picture of all of this yet.

Mike

Firesteel Surplus

[mam98031]

With respect, you haven't found something new here.  We have all experienced this since Manage Payments became site wide about 2 1/2 years ago.  You have paid it from the first transaction you had in MP.  You may have just noticed it, but it has been there all the same.

Ebay does NOT "dig into your [my] shipping funds".  They have never done that.  It is your responsibility as a seller to price you shipping accurately to your cost.  If you choose not to raise you shipping fee to the buyer enough to cover your FVFs, then you need to make sure you put it into the price of your product.  If you don't, then you need to revisit how you price your inventory.

[dnasilver]

Actually managed payments became site wide this year. Certain categories were not required until Jan 1 2022. That is this year not 2.5 years ago. Our catagory changed July 1st 2021, which is less than 2.5 years by over a year.

[johnrj1226]

Guess you didn't notice that PayPal also collected their fees on state sales taxes when they were  the Money Processor.

BTW if you were not a  store subscriber a seller would  get an allotment of 50 free listing each month.  Now with Manage Payment they receive an allotment of 250/month.   You have 245 current listing = looks like you really financial benefitws from the  change.

[tdrake]

A professional knows that if you own a business  and you collect sales tax and customer  pays with a credit card your cc processer will charge you for every penny that was charged. They don't care what it was for. Not itemized. Plus, depending on your  contract, a transaction fee and perhaps a monthly fee to boot. Many amateurs on eBay don't take the trouble to learn that. 

[angelfoodcake]

You pay 12.9% of the buyers shipping costs as well. It WAS a cheaper alternative to paypal which charged 0% of taxes and 3% of shipping...