eBay Profiting Off Sales Tax Collection

[sarcodes]

This has been discussed here before, but I thought I'd give it a refresh for the sake of discussion and attention. eBay's selling fees includes the sales tax collected on your sale. I just sold a higher priced item and was surprised that they included the sales tax amount in their final fee collection.

eBay is essentially charging sellers for handling state tax collection. This is tax that is never given to or handled by the seller. It's a tax charged by eBay, then sent, by eBay, to the customer's state. The whole thing seems like a racket to skim off sales tax collection, just to make final selling fees appear lower.

Collecting state sales tax is a necessity for some state's infrastructure upkeep. Infrastructure that we all use, including eBay, to get customer's their stuff. It seems slimy to charge for this service, yet we'll blame the tax man instead of questioning eBay's fees. It all feels very sneaky and is deterring me from selling higher priced items on their platform.

Any thoughts or complaints out there?

[dhbookds]

It seems slimy to charge for this service

Why is it slimy?  They have to set up the structure, keep it up to date for all tax districts (not just a state)....remit money to the district......etc. 

Would you rather do it yourself for each and every sale?

[pburn · Accepted solution]

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@sarcodes wrote:

Any thoughts or complaints out there?

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If you search this topic within the Community discussion boards, you'll find countless thoughts or complaints that have already been posted. As you indicated in your opening sentence:

"This has been discussed here before . . . "

I can't imagine anyone having a new thought or a new complaint or a differing opinion from the ones they've posted many, many times before.

[sarcodes]

It's great that they do the leg work, but just be upfront with your sellers. Don't just bury that info. somewhere on your platform. Something tells me if eBay informed sellers of exact fees during the selling process, sellers would have second thoughts about selling here or at least pass that cost onto customers. I know I am.

[sarcodes]

It's just to keep it relevant as posts eventually get buried and forgotten. Thanks for your complaint about me asking if anyone has any complaints though.

[pburn]

the computation of eBay's seller final value fees is not [buried] somewhere on [the] platform. It's all over the help pages, just as plain as day.

Final value fees

We charge one final value fee when your item sells, and you don't have to worry about third-party payment processing fees. This fee is calculated as a percentage of the total amount of the sale, plus $0.30 per order.

The total amount of the sale includes the item price, any handling charges, the shipping service the buyer selects, sales tax, and any other applicable fees. 

[dentalsales4u]

I would say eBay is upfront about it if sellers read the policy.

https://www.ebay.com/help/selling-fees/selling/selling-fees?id=4822&st=3&pos=2&query=Selling%20fees&...

Final value fees

We charge one final value fee when your item sells, and you don't have to worry about third-party payment processing fees. This fee is calculated as a percentage of the total amount of the sale, plus $0.30 per order.

The total amount of the sale includes the item price, any handling charges, the shipping service the buyer selects, sales tax, and any other applicable fees.

[stephenmorgan]

https://www.ebay.com/help/selling-fees/selling/selling-fees?id=4822&st=3&pos=1&query=Selling%20fees&...

[stainlessenginecovers]

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@sarcodes wrote:

It's great that they do the leg work, but just be upfront with your sellers. Don't just bury that info. somewhere on your platform. Something tells me if eBay informed sellers of exact fees during the selling process, sellers would have second thoughts about selling here or at least pass that cost onto customers. I know I am.

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That information is the complete opposite of buried. There is a Blue Underlined 'final value fees' at the bottom of EVERY LISTING CREATED. All a person has to do is 'click that blue underlined 'verbiage' and it tells you, in pretty simple and plain english, what is included in the Final Value Fees.

For those that don't want to know what they are being charged, will simply ignore this. 

Also- stores have been charged a processing percentage on the CASH REGISTER TOTAL since the advent of the Credit Card in the 1940s

So, why would this be any different? 

List it for free.

A final value fee- applies when your item sells.

By selecting List it, you agree to pay the above fees......

List it

Final value fees

We charge one final value fee when your item sells, and you don't have to worry about third-party payment processing fees. This fee is calculated as a percentage of the total amount of the sale, plus $0.30 per order.

The total amount of the sale includes the item price, any handling charges, the shipping service the buyer selects, sales tax, and any other applicable fees. 

[itsjustasprain]

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@sarcodes wrote:

eBay is essentially charging sellers for handling state tax collection.

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Right.

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@sarcodes wrote:

Any thoughts or complaints out there?

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No.

Do you really want the task of tracking how much sales tax to remit to each taxing body in the U.S. for the sales you made to each buyer over the entire year?

[monica-sells]

"...eBay is essentially charging sellers for handling state tax collection..."

yes, they are....and I am glad they handle it....not me

the nightmare of making sales in multiple taxing districts, having to file returns and reconcile each individual district, the submitting payment to said district is way beyond the scope of my skills.......

oh, nothing "buried" about the current format of selling fees

the only thing "buried" is our own recollection of the past fee structures that have adapted and evolved to the current climate of payments....no more $1.00 items with $10.00 shipping and paying 10% on the 1.00 and 0% on any other amounts.......

[buyselljack2016]

PP charged (although at a lower rate) a processing fee on the sales tax. PP fees for most sellers has increased.

My fees are basically the same with eBay/MP as they were with eBay/PP. 

As the laws of most states are written after the "interstate sales decision", I would not be required to collect/remit sales tax, but I have no issue with eBay taking care of it, as they are legally required to do so as a marketplace. If selling on my own website I would not meet the sales total threshold for most states. Seems that there is at least one with no minimums.

Bringing a dead horse back into the limelight makes it no less dead

[r_lresale]

So I'm wondering that if I take a credit card payment from a customer directly and my card processor charges 2% processing fee which does include the total purchase (yes including tax) and I charge a processing fee to cover this expense so I don't actually loose money (we are ALL selling things to make money), does that make me shady, the processer shady, or is that just how commerce works? 🤔. 

[joliztoyco]

Yes. As a matter of fact I would rather "do it myself". It's a simple program you can buy in hundreds of places. 
Simply google: Davo....it not only tracks and collects sales taxes by states...it also files and pays it when it's due.
I don't need Ebay to do it....and take MORE of my money. But this is neither here nor there. 
Ebay doesn't give us an option.....

[714ricki]

What is your opinion about all the credit card companies charging businesses a fee also on the sales tax and shipping? Its common practice by the financial institutions. All other comments remain the same amongst the countless threads on the topic. 

Look at it this way, would you want to take all the necessary time to remit all the collected taxes to the individual states that require sales tax? Well worth the few extra pennies for the fees on the sales tax. 

Good luck!