Will ebay be taking a commission on sales tax?

[historybytheinch]

I just read the latest posting by ebay about new rules concerning the collecting of sales tax. The posting said:

"In states where eBay is required to collect Internet Sales Tax from buyers, order totals sent for processing will reflect the gross order amount inclusive of tax."

Since they are sending the gross amount including tax for processing does that mean they will be taking a 9% commission on the sales tax amount?

[nobody*s_perfect]

The FAQ says:

Does eBay charge final value fees on the final amount including sales tax?

No. Final value fees only apply to the sale price of the item.

https://pages.ebay.com/seller-center/service-and-payments/tax-information.html#m22_tb_a2_15

[dirk12955]

Indiana. It used to be, And may still be, That an Indiana merchant would collect sales tax from his customers. Then every 30 days that merchant would forward something like 99% of what he collected to the state of Indiana.

The state allowed the merchant to keep 1% or whatever the % is/was for his trouble.

I'm assuming, EBAY has some sort of agreement with each and every enity they are collecting sales tax for.

On the one hand, EBAY is collecting and remitting sales tax for dozens of states. Each one with it's own funky and weird rules and regulations.

On
the other hand, EBAY is certainly taking a small cut of the proceeds from sales tax collection.

You can bet the rent on that.

[johnrj1226]

You are only speculating but if you would like to handle the sales tax issue have at it.    I would think it would cost eBay way more than 1% of the  sales tax collected to handle this all over the US.  One thing any business does not want to do is mess up taxes - remember how  they busted Al Capone.  We  have a long time company in our  county that the Feds now  have under lock & key.

In the  State of Georgia Sales Taxes range from 4% to 9% based on the county.  Companies in Georgia that I worked for all submitted sales tax collections on a quarterly  basis- always  heard the folks in accounting "moaning" louder ever quarter.

[historybytheinch]

Doesn't ebay also collect  final value fees on shipping?

[disneyshopper]

Doesn't ebay also collect  final value fees on shipping?

Yes.  They have been doing that for several years now.  You are charged the FVF on the item price immediately when the item sells.  When the buyer pays, then you are charged FVF on the shipping amount paid.

[mam98031]

While Ebay does NOT collect any fees from sellers for the collection or processing of Sales tax, the same is NOT true for PP.  As of November, PP will be collecting their 2.9% from sellers for processing the sales tax portion of the payment.

[7606dennis]

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@dirk12955 wrote:
Indiana. It used to be, And may still be, That an Indiana merchant would collect sales tax from his customers. Then every 30 days that merchant would forward something like 99% of what he collected to the state of Indiana.

The state allowed the merchant to keep 1% or whatever the % is/was for his trouble.

I'm assuming, EBAY has some sort of agreement with each and every enity they are collecting sales tax for.

On the one hand, EBAY is collecting and remitting sales tax for dozens of states. Each one with it's own funky and weird rules and regulations.

On
the other hand, EBAY is certainly taking a small cut of the proceeds from sales tax collection.

You can bet the rent on that.

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I believe that most states allow merchants to keep a small percentage of the taxes collected as compensation for the time and effort to collect and remit them.  Otherwise the merchants would be non-paid employees of the state's tax agency.  I know that Florida does but I donate whatever that allowance is to the state for education.

Sales tax is not a tax on the income the seller derives from the sale, but rather a tax on the transaction owed by the buyer.  The income to the seller is taxed separately.

I'm often amazed at how many people scream bloody murder about double taxation.  Everyone should realize by now that they are taxed many times on the money that they earn.  They are taxed when they earn it, when they spend it, when they save it and when they leave it to their heirs.  It is also taxed if it is converted into real or personal property and many other times which aren't called taxes but are in reality.

Even playing the state's lottery in places that have them is taxation only with the opportunity to get a little back with luck.  Of course, like in a Los Vegas casino, the house is always the winner. 

[cashvaluerecovery2011]

Ebay is also charging taxes on items that do not have a sales tax in some states. Here in GA silver and gold coins are not charged a tax. Whether you are from out of state or in state I do not charge sales tax on them. This will decimate bullion sales for many as people will not pay the 10% in fees we sellers have to add to pay ebay and paypal and ship and then another 6%-9% on top of it. You end up paying $27 for a $17 piece of silver after shipping lol.

Gold oz? $1496 melt value. Currently selling for average of $1553. 10% in fees to seller = minus $155. $20 to ship. Dealer is already losing money when he can just melt it for $1500 at a refinery. Now you are asking the buyer to pay $1553 for a $1500 piece of metal and then pay another 6% to 9% on top of it. Just another $90 to $135 no biggy lol.

[thehonorabletrader]

Most states that have passed Facilitator/Marketplace Sales Tax have passed a separate law that applies differently to items sold online as opposed to sole locally. In many cases for simplicity, the states are just stating if it's online then just charge it and no exemptions.

I can promise eBay's attorneys and legal department know the laws better than you or I do as they have to review every state and fully understand it so they can ensure they are following the law correctly.

Before making any assumptions I would check with the local laws. There was already speculation specifically around bullion and precious medals the moment SCOTUS made their decision in 2018.

https://sdbullion.com/blog/what-online-sales-tax-ruling-means-for-online-bullion-buying

[readabouthorses]

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@mam98031 wrote:

While Ebay does NOT collect any fees from sellers for the collection or processing of Sales tax, the same is NOT true for PP.  As of November, PP will be collecting their 2.9% from sellers for processing the sales tax portion of the payment.

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So I guess that will be at the higher percent if the buyer is using a freight forwarder that is located in one of the tax states? Wonder how many of those there are (freight forwarders in tax states)?

[mam98031]

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@cashvaluerecovery2011 wrote:
Ebay is also charging taxes on items that do not have a sales tax in some states. Here in GA silver and gold coins are not charged a tax. Whether you are from out of state or in state I do not charge sales tax on them. This will decimate bullion sales for many as people will not pay the 10% in fees we sellers have to add to pay ebay and paypal and ship and then another 6%-9% on top of it. You end up paying $27 for a $17 piece of silver after shipping lol.

Gold oz? $1496 melt value. Currently selling for average of $1553. 10% in fees to seller = minus $155. $20 to ship. Dealer is already losing money when he can just melt it for $1500 at a refinery. Now you are asking the buyer to pay $1553 for a $1500 piece of metal and then pay another 6% to 9% on top of it. Just another $90 to $135 no biggy lol.

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Again, not Ebay.  They are doing as instructed by the individual states.  Ebay is not making up their own rules for how much or on what sales tax is collected.

For buyers, they can get the most accurate rate by having their full zip code on their addresses.  By including those last 4 digits on the zip code, the program can better tell exactly where the buyer is located and charge the rate for that area.  For example, the state of Washington, on Ebay we are being charged a rate of 10% if you only have the 5 digit zip code in your set up.  Not every jurisdiction is that rate in the state.  In fact, in mine it is 8.7%.  By adding the 4 digits to my zip code I now get charged the 8.7%.

I seen the stuff that you are concerned with stated before.  I don't know the accurate answer for those concerns.

[mam98031]

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@readabouthorses wrote:

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@mam98031 wrote:

While Ebay does NOT collect any fees from sellers for the collection or processing of Sales tax, the same is NOT true for PP.  As of November, PP will be collecting their 2.9% from sellers for processing the sales tax portion of the payment.

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So I guess that will be at the higher percent if the buyer is using a freight forwarder that is located in one of the tax states? Wonder how many of those there are (freight forwarders in tax states)?

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I'm sure you are correct.  But it doesn't worry me.  While I do get sales to freight forwarders, it isn't at such a level that this is going to cost me a bunch of money.

After the holiday season I have to adjust pricing [as we all do] for the increases we will be getting in USPS fees and other carriers.  So when I'm reviewing my pricing at that time I will also make some adjustments for these sales tax fees with PP and covering myself for the loss of PP fees that will no longer be refunded when we refund buyers.  I'll just see how the next few months go.  And then adjust pricing as necessary come January.