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I am really curious to know if I am the only seller who has caught on to this scam by Paypal. I have examined the last few sales I have had on Ebay. Ebay has charged the buyer for Sales Tax on the sale. Then that GROSS amount which includes the Item, Shipping, SALES TAX is collected by Paypal. Then Ebay pulls the shipping cost from my Paypal Account and and Paypal takes their fee from the rest of the payment (Including the SALES TAX). So for those last few sales I noticed a differnce of .03 - .04 more in Paypal FEES dues to the sales tax collected by Ebay. Why do I have to pay additional Paypal FEEs for Ebay to collect a sales tax which is not required for them to do directly (except for CA). I am not making any profit on the sales tax. The Sales Tax is a FEE for certain states being collected by Ebay, not by the sellers.
I have spoken to customer service at both Ebay and Paypal. I was told it was not them it was the other. So the merry go round is spinning and nobody it taking responsibility. So, I issued a complaint on Consumer Affairs, the NY State AG, and next to the BBB.
The Ebay policy on Sales Tax states:
"Once ebay starts to collect sales tax in the required states, no action is required on your part, and there will be no charges or fees for eBay automatically calculating, collecting, and remitting sales tax."
Obviously they don't follow their own policies.
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What I find truly hilarious is paypal has the sales tax as a separate line item on their invoice, and it's titled "Tax collected by eBay."
They clearly acknowledge it was collected by eBay, not by me.
Why am I being charged a fee for something they themselves state is collected by another party?
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PayPal charged sale tax to me, the seller, not the buyer. They deducted it from my account. Between the selling fee and this bogus tax (they didn't even use my tax rate, the one they used was higher!) I didn't make $5.00 on an $28.00 sale!
I'm starting to remember why I haven't sold anything on eBay for a long time now!
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Remember to list on Mercari. Flat 10% fee. You don't pay paypal fees or fees on tax. You don't have to pay shipping fees or double fees on the shipping fee you charged. Shipping prices are cheaper too as they have an agreement with shipping companies. Insurance is free up to items listed up to $200 and there is no cost for this insurance. WAY BETTER THAN EBAY!!!
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YES...eBay collects fees on States sales tax from sellers with their own Managed Payment system. An eBay rep confirmed this on eBay forum a few days ago when someone asked the question:"Yes, when we state total we mean the total amount the buyer is paying the seller."
That means now this fees on taxes scam is moving from PayPal to eBay.
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This all started with the politicians in Washington and in each state, as they watched the ever increasing volume of interstate sales (which were exempt from sales tax revenues). The tears from seeing that delicious growing possible tax pie just became too much.... mainly due to AMAZON & EBAY. Thus as they lamented and wrung their sweaty hands as they bickered back and forth "how ole how do with get some of that PIE!!" AMAZON panicked... in fears of greater taxes directly towards Corps of interstate commerce... and came up with "HEY! Uncle Sam! I'mma good Bezos! I will volunteer to dip my fingers into my clients pockets... and gratefully remove thy wanted pieces of silver for thee!"
The precedent was set... Ebay toed the line and followed suit... not to be foolish and hang a target on their back. Since already hurting from diminishing activity and rising competition both domestic and foreign. Paypal.... well will not miss out on the opportunity to scrape off a little of the cream as they dutifully deliver millions back to Ebay so they can feed Uncle Sam.... who will bail out the Post Office who is going broke... who raised the price of postage... due to the cost of oil when it was over $120 a barrel.... now that it is $19 a barrel....
Moral.... you live in the land of the free... there is a cost. We earn the dollar, you are taxed on it. spend the dollar, you are taxed on it.
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I believe charging a fee on a tax is illegal.
The matter needs to be escalated to the
proper authorities. This is quite apart from
the outrageous aspect that the seller is paying
a fee on an amount from which they obtain zero
benefit
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I used have a merchant account via other company and they charged the fee including the sales tax. However, the tax was collected by us not by the company.
So, we see the amount in the sales report and we report the sales tax collected us to the New York state where we are located.
However, for the eBay sale, we don't see the money but eBay collect the tax directly from the buyer. Also, we don't see any evidence that eBay report the sales tax to our state correctly from our sales.
I've read about the Sales Tax collected by Market Seller (such as eBay, Amazon) via New York State .Gov page but they did not explain about that.
In my personal opinion, since eBay collect it, eBay should pay the fee to PayPal because we don't know about the money where it is going actually.
If the buyer ask us , we can't explain about the % and so on. The Sales Tax part is done 100% by eBay so eBay have the responsibility for the sales tax part.
Then, why PayPal include it as our sale? and why we have to pay the fee to PayPal? It does not matter if the fee is small or large, I don't think t is the right thing.
I will ask about this to FTC or some organization.
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