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Fees being charged for the amount of SALES TAX Ebay is collecting for each sale

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New Community Member

Re: Fees being charged for the amount of SALES TAX Ebay is collecting for each sale

I get what you are saying.  By law I am not required to collect sales tax in any state except Utah because I am under the small merchant threshold in each state.  Ebay is the one required to pay sales tax because of their volume, not me.  There should be no fee since there should be no sales tax added to my PayPal income.  I believe they are looking at it as collecting the sales tax for us, but since it's only because of their platform that it needs to be collected they should be the one assuming the costs.  They are blaming it on PayPal, but when I ship via ebay's global shipping I do not get charged for it through paypal.  Obviously ebay has a way to make one PayPal payment be split between two accounts.  Ebay is just not wanting to absorb the fees themselves and passing it on to us.   I was told that they want us ditch PayPal and move to ebay managed payments where the tax is not charged a fee as they pull it out separately.  I think perhaps they are wanting to punish those of us who still prefer PayPal.  Another issue this raises is that amount is now added into my 1099-K from PayPal.  I certainly hope ebay will give us a report of which monies collected went to sales tax because I will now need to deduct them as a business expense.  I hope I don't have to keep track of each individual sale that collected tax.  A summary would be much more convenient.  

Contributor

Re: Fees being charged for the amount of SALES TAX Ebay is collecting for each sale

Not everyone is INVITED to managed payments either! So eBay says some can, others **bleep** you. I'm a little seller too, and I made no changes to my listings to collect tax, eBay did that. THEY should be responsible for the fees or they should not be included. It should be reported to the state Tax Boards. Besides that, HOW are we supposed to figure rates out since every state/county/locality has a different rate and there's no way to do the math ahead of time? How can we "include this fee in our prices"? I don't get or like being cheated.

Member

Re: Fees being charged for the amount of SALES TAX Ebay is collecting for each sale

I have just spoken to an ebay rep about this exact issue. Her response was to literally say "ebay made a business decision to no longer pay the 3% fee charged by paypal...." I think all should be aware of that.

New Community Member

Re: Fees being charged for the amount of SALES TAX Ebay is collecting for each sale

I am having the same problem since Ebay started collecting sales taxes this year. PayPal adds up item price, shipping AND eBay-collected tax and THEN applies its 2.9% + $0.30 fee.

For example, I sold a painting to a buyer in Kentucky and there was no tax added by eBay (only item price and shipping).

Then I sold another painting at a similar price to a buyer in California and there was a tax added by eBay on that sale. PayPal charged a fee on the total amount including sales tax that I had never had in my hands because it was collected by eBay for remittance to state authorities.

 

So, here is how the second sale details in my Paypal account look like:

 

Item price                $150.00

Shipping                        $73.05
Tax                                $12.75
Purchase total            $235.80
Fee                                -$7.14
Tax collected by eBay -$12.75
Total                             $215.91
 
Here is how the fee is calculated: Purchase total of $235.80 * 2.9% + $0.30 = $7.14
Without the tax the PayPal fee would have been lower:  $223.05 ($150.00 [Removed. Phone #s not permitted]77
I lost $0.37 ($7.14 - $6.77) on this one sale only because my painting sold into California and not, say, into Florida which is a tax-free state on Ebay. The penultimate line (Tax collected by eBay) should be placed by PayPal before the Purchase total.
Guys, this is getting ridiculous. It is getting to the point where I am better off selling only into the Ebay tax-free states that as of today are: Alaska, Delaware, Florida, Kansas, Louisiana, Michigan, Mississippi, Missouri, Montana, New Hampshire, North Carolina, Oregon and Tennessee. By selling into the remaining 36 tax-collecting states I am haemorrhaging money in PayPal fees. This is just not right. It has got to change. Whether it will take a class action lawsuit to make PayPal change things, I do not know. But I am guessing that it is exactly that.
New Community Member

Re: Fees being charged for the amount of SALES TAX Ebay is collecting for each sale

Without the tax the PayPal fee would have been lower:  $223.05 ($150.00 [Removed. Phone #s not permitted]77

 

There was no phone number in my message, PAYPAL.

This phrase should read: $223.05 * 2.9% + $0.30 = $6.77

Contributor

Re: Fees being charged for the amount of SALES TAX Ebay is collecting for each sale

Update...I opened an investigation with the NY State AGO, and they forwarded it to the NY State Taxation & Finance office for investigation. I am waiting for their update now. I also opened a complaint with the BBB and the Consumer Protection Agency. Now I wait to see how this will play out.

Contributor

Re: Fees being charged for the amount of SALES TAX Ebay is collecting for each sale

Thank you old geezer...

I am in complete agreement with those of you who have been sharp enough to see we've been had here.  Yes... this needs to stop!!! This is absolutely ridiculous.

I have not been selling much but just noticed that my last sale was handled this way - where PayPal added the state sales tax to the sold price of my item and THEN calculated their fee.  No no no. This is not how this was supposed to work and not how we were told it would work. Up until now, I have not had any other sales handled this way (maybe they were all in those state mentioned previously that aren't collecting tax).

I'm a little confused by those of you who have said shipping has been added to this total as well... How? I include shipping in my price/"free shipping" on 99% of my listings, so maybe that is why I'm not seeing it.

I am pretty fed up with this greed. It's gotten extremely difficult to make any profit anymore on eBay. I started selling part-time when I became disabled over 15 years ago. I have always reported my income each year on my tax return. I don't think I even made enough this year to report, but will do so anyway.  My income has dropped considerably over the past 3 years selling on eBay. I am turning to selling locally on craigslist more often as a result. I'm probably doing better on some items as I only have to pay my own self-employment tax for those sales and no fees to anyone 🙂 I have depended on this extra income from eBay, however, to get by on. The selling fees for eBay, payment rec'd fees for PayPal, high cost of shipping, Internet fees ($93/month in our area for Internet alone!!!) and now the taxes being charged have completely changed how eBay runs and how it helped so many of us on fixed incomes.  PayPal grabbing a little bit more from my hard work does not sit well with me. Really. All I can think of over and over again is GREED.

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Contributor

Re: Fees being charged for the amount of SALES TAX Ebay is collecting for each sale

YES! Finally a sane person. I have had a response to my 1st post that told me it was the cost of business and I should suck it up. He also went on to tell me that Ebay and Paypal are separate companies, what a crock. From experience Ebay still controls Paypal totally. Example: Ebay hold funds back from NEW seller for up to a 20 day period until they demonstrate a certain seller history. Ebay instructs Paypal to do that, also anytime there is a buyer dispute on ebay, then Paypal takes action right away at Ebay's direction. They are in cahoots regardless of what the "Official" word is.

 

When Ebay decided to step in and and collect the sales taxes from all states that require internet sales to be taxed, they did this on their own, it was not a requirement in any state except California, since they are headquartered there. Ebay also stated there would be no charges to the sellers for their action to collect sales tax from the buyer and then collect it from the seller's Paypal account. Only trouble being they send paypal the gross amount to collect on a sales which includes the sales tax. Then Paypal take their fee on the gross amount, including sales tax, then deducts the sales tax and ushers that along to Ebay.

 

All my sales which have had the sales taxes collected keep adding to my expenses, which right now are too high as it is. So I filed a number of complaints with different agencies to see if they can get this issue resolved. Besides, I have to report my sales tax to NY State with gross sales from other resources, so not it is very confusing. DO I include the gross sales from Ebay??? and get double taxed of what? I will let the NYS Attorney General, The Better Business Bureau and the Office of Consumer Affairs hash it all out. Maybe it will become another class action suit. Ebay and Paypal have not outgrown their responsibility to the general population, no matter how many millions they make.

New Community Member

Re: Fees being charged for the amount of SALES TAX Ebay is collecting for each sale

I agree that this is grimy as <removed>, but sadly I don't think its illegal.  If you've ever done CC transactions before with a normal payment processor, you're charged on the TOTAL transaction amount, not an itemized amount.  So if/when any complaint is made official and it reaches paypal, paypal will claim they are following industry practices.  I'm trying to move my clients to using Zelle for payments because paypal fees are getting insane. It seems like every year they are taking more and more.  I guess they need to seize more money from us so they can all get bigger raises each year.

Contributor

Re: Fees being charged for the amount of SALES TAX Ebay is collecting for each sale

To all:

I filed a complaint concerning this issue with the attorney generals office in Nebraska (where payuppal is located).  What I found out: it is illegal for payuppal to charge a fee on the sales tax. Google Nebraska attorney general, file a complaint. AND...

A terrific solution to eliminate payuppal fees, accept your own merchant account OR state "local pick up only" in your listings. Fees will be considerably less without payuppal padding their pockets.

With this option, when buyer contacts you, state they CAN send payment. Communicate directly and eliminate the unwanted partner.

After having received communication from AG office, all my listings, beginning tonight will state this.

GOOD LUCK! We're all paying paypal and ebay almost 20%. When paypal started, their slogan was: NEVER A FEE, NEVER WILL BE.

eBay initially charged 5% up to $25 sale, drifting down to 1.25% for sales over $1000!