Ebay Sales Tax Question.

raddison1972 · Feb 3, 2020

I guess Texas has succumbed to crappy sales tax on what I consider private transactions, but I get it and I'll deal with it. What I can't wrap my head around is them charging sales tax after the price plus the shipping charges are included. Is that even legal?
Am I the only one seeing this? I won an action for $0.99 and paid like $0.36 in sales tax!

Anyways, interested to see if everyone is getting this shaft or just Texas.

Thanks for reading and sharing any info from your neck of the woods.

mrmopar · Feb 3, 2020

Yes, they are charging tax on shipping and ebay is taking a cut of the shipping too I believe. That part I find even harder to believe. Now you have to pad the shipping to not only cover the actual cost, but you need a piece for ebay's wallet too!

nosterbor · Feb 3, 2020

raddison1972 said:
I guess Texas has succumbed to crappy sales tax on what I consider private transactions, but I get it and I'll deal with it. What I can't wrap my head around is them charging sales tax after the price plus the shipping charges are included. Is that even legal?
Am I the only one seeing this? I won an action for $0.99 and paid like $0.36 in sales tax!

Anyways, interested to see if everyone is getting this shaft or just Texas.

Thanks for reading and sharing any info from your neck of the woods.

And what do you think the seller had to pay to sell you that 99 cent card? They got more screwed than you. Ebay and the tax man love you both.

smapdi · Feb 4, 2020

Yes, and the seller is paying Paypal fees on the tax. Here's a card I sold recently, with all the details from Paypal:
Purchase Total $120.22 USD
Sales Tax $11.42 USD
Shipping Amount $4.00 USD
Handling Amount $0.00 USD
Insurance Amount $0.00 USD
Gross Amount $135.64 USD
PayPal Fee -$4.23 USD
Tax collected by eBay -$11.42 USD
Net Amount $119.99 USD

The Paypal fee is 30c + 2.9% of $135.64, the total of the item, shipping, and sales tax. AFTER they take their cut, the sales tax is deducted from my money. And if I have to give a refund, the buyer gets their sales tax back, but I do not recoup the fee on the sale, including the tax. Then on top of that, ebay will charge me $12.02 at the end of the month for final value fee. I don't begrudge that, even if it seems a little high. Paypal and the government figured out just enough how to charge sales tax on interstate transactions, but not how to appropriately credit everyone back in case of returns. I know Paypal has their own fees, but it costs the same to transfer $4.23 as it does any other reasonable amount.

gamecockfanatic · Feb 4, 2020

actually ebay ADDS the sales tax to the total item price plus shipping so the seller doesnt actually have the sales tax collected taken from their end...for example , i just sold an item for 9.99 with free shipping ... ebay charged the buyer the 9.99 plus .75 sales tax ...granted , pay pal did still collect fees on the .75 sales tax , but my total payment after .59 in fees was still 9.40...had they taken the tax out of my end i would have received only 8.71 (9.99 - .55 fees -.73 sales tax) ...

smapdi · Feb 5, 2020

No, the tax doesn't come out of your proceeds, but the fee for it does. For the $135.64 my buyer paid, Paypal charged a $4.23 fee. That is 30 cents plus 2.9% of $135.64. Without the tax, Paypal for just the card plus shipping would be $3.60 + 30 cents. So an extra 33 cents to Paypal. And if I ever had to refund that purchase, I don't get that 33 cents back even though the buyer would be getting his full $135.64 payment back. This isn't a big deal in my case but Brent of Brentandbecca had a long twitter thread about it last year, saying it could cost him thousands as he gets a lot of returns. Cost of doing business I guess but interstate internet taxation is going to have a massive effect on the multitude of small-mid-sized sellers.

Letch77 · Feb 7, 2020

And what will the state/local governments do with all of this newfound tax revenue? Squander it away on BS projects but turn right around and cry about how emergency services will suffer if a different tax isn't increased. It's total BS and government overreach is getting out of hand.

finestkind · Feb 7, 2020

Oh boy.

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Ebay Sales Tax Question.

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