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?

[ebooksdiva]

Here's a thought. 

Try collecting and remitting all that sales tax yourself.

Then come back here and tell us all about it.

[valueaddedresource]

---

@ebooksdiva wrote:

Here's a thought. 

Try collecting and remitting all that sales tax yourself.

Then come back here and tell us all about it.

---

@ebooksdiva  here's a thought, how many states would you meet the economic nexus threshold and have to collect sales tax for?

https://www.avalara.com/us/en/learn/guides/state-by-state-guide-economic-nexus-laws.html 

For frame of reference, I previously worked for a company that did ~$25 Million/year in sales, ~$7M of which was through marketplaces, the rest through direct websites.

At the time I was there, with ~$18 Million/year in direct sales, that company met the economic thresholds in 38 states.

As I said previously in this thread, the large majority of sellers posting here would likely be nowhere near the thresholds in most states.

[dave-katz]

eBay charges enough fees already. They should collect the tax on behalf of the sellers, and not charge us an additional fee. They make money hand over fist, and when we have to eat a 10% California tax, that cuts down on profit, especially for those of us who sell on a commission basis.

[maxine*j]

---

@valueaddedresource wrote:

---

... As I said previously in this thread, the large majority of sellers posting here would likely be nowhere near the thresholds in most states.

---

True.  But that would have changed had not the so-called "marketplace facilitators" finally been required to collect and remit sales taxes.  The states were losing far too much tax revenue to  allow internet sales go untaxed for much longer. 

If the states had been ultimately unsuccessful in getting the big guys (eBay, Amazon, Etsy, et al) to do this, they would have begun lowering those thresholds, dramatically, and otherwise finding ways to get the sales taxes collected and remitted by small, individual sellers -- and they may yet still, to catch more revenue from those sellers.

-

-

[theteamsetguy]

I couldn't agree more.

[theteamsetguy]

@dentalsales4u ,

The issue isn't ebay not being upfront as much as sellers not doing their research before they start selling!

[gromexe]

It drives me crazy to see so many sellers here just "accepting" these insanely high fees. eBay is clearly profit gouging. And don't get me started on the promoted listing fees. How can we really know that a buyer purchased an item by clicking a promoted listing? I created a promoted listing and quickly removed the promotion. You're telling me that someone who purchased that listing at least 2 months after me removing the ad still clicked on a promoted listing?! BC! There's more shady things going on. We need a check and balance entity to examine these corporations. 

[laserpartshq2]

A store owner can't charge a customer a fee for collecting sales tax, why can EBAY ?

[dbfolks166mt]

A store owner can't charge a customer a fee for collecting sales tax, why can EBAY ?

A store owner may not be able to but the CC companies sure do. Ever been to an estate sale and seen a sign that says we charge 3% fee if you pay by CC? That 3% is on the entire purchase item cost and sales tax. 

[dbfolks166mt]

@bonjourami wrote:

Ive often thought with all these complainers, that Ebay should allow them to collect their own sales tax, and remit it to the proper states..at least it would give the boards a break from the constant repetitive posts about it.

They'd be replaced by posts howling about having to collect and remit sales tax, and that eBay should do it.

     Probably followed closely by the news reports of all of the ecommerce third party sellers that were failing to remit the sales tax to the states. 

[dbfolks166mt]

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.....

     It's not eBay that is not giving you an option its the way the court decision and individual state laws have set it up. They are/were smart enough to anticipate all the problems if this was delegated to the individual level. 

     Even if they did give you the "option" can you imagine the quagmire if 50% decided to do it themselves and 50% stayed with the ecommerce provider handling it?

[theteamsetguy]

@laserpartshq2 ,

If you owned a brick and mortar store and accepted credit or debit card payments. I’ll bet my bottom dollar that Visa, MC, Amex, and Discover will charge their fees on the sales tax portion of the ticket total. The store owner still has to file monthly, quarterly, or what ever is required by their state and local jurisdictions require to remit the sales taxes collected.

Ebay takes care of all of the filing and remittances to the authorities for you. That to me is worth the fees I pay to eBay on the sales tax. There’s probably software out there that can do it for you but that has a costs too. 

My average ticket is about $30.00. The fee on the sales averages about 20 cents per ticket. I just price it in to my prices and pass it along to the buyer like all of my other costs to sell on eBay. There are thousands of different jurisdictions that collect sales tax all over the country. I don’t need the headache of figuring who gets paid and when.

I’m also seeing more and more restaurants and other small businesses adding 3 or 4 percent surcharges if paying by credit or debit cards.

[gkids.kevandmik]

Agree 100%   I live in Pennsylvania where coins are non taxable while paper money is taxable .  I''m not sure what the difference is but if anyone is charging Sales Tax, it should be the seller.  I can't get in touch with eBay to voice a complaint, so eBay gets $16.94 they are not entitled to.  

[soh.maryl]

How much do you figure it costs eBay in terms of employee hours to collect and remit state sales tax for 45 states and many different jurisdictions within those states?  

[1524johns]

It is all about eBay profiteering!  First, they do not pay your tax immediately, it is held in an account that they have with each entity be it state  or national.  They profit off of how long it is in that account.  Next, they profit by charging different shipping fees to Seller and Buyer. If the Seller combine shoppes , then more likely eBay has limited the size of box to accommodate the extra items, and therefore increase profit for eBay.  Next, by introducing Auto Pay unannounced to many Sellers.  Auto pay requires the Buyer to pat any tax and delays immediately return om over taxation.  They profit on selling more boxes, increasing both fees for Seller and Buyer.  They have done this for over a year now! Ebay Profiteering.