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

0ldgeezer
Contributor
Contributor

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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117 REPLIES 117

Crooner703
Contributor
Contributor
If you think about it, Ebay knows that in many cases people selling on their platform are under the state thresholds and if they had an interest in their customers they would sue on their behalf . But Paypal/eBay doesn’t care because they are still getting additional fee on the tax collected with zero cost to them, so why fight it. The only way you can challenge us is through a class action suit initiated by the Low sales merchants on eBay. Anyone know a reputable class action suit lawyer (I know an oxymoron in one sentence)!
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runyon27
Member
Member

To say this is too complicated is well incorrect. They already know that something is a sales tax and its value. All they would have to do is add code to to subtract the sales tax total from the fee calculation. It probably really isn't that difficult at all.

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Les1970
Member
Member
I have used PayPal for years. Until recently, I never had to pay sales tax. The last few transactions that I have made from EBay have added taxes which of course made the expense more than what I expected. Therefore, this is a problem. The EBay auctions do not state that taxes will be applied. If they were, then I would not be bidding or buying these items. PayPal does not state that they add taxes so I do not understand how this is legal to happen.
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Les1970
Member
Member
I have used PayPal for years. Until recently, I never had to pay sales tax. The last few transactions that I have made from EBay have added taxes which of course made the expense more than what I expected. Therefore, this is a problem. The EBay auctions do not state that taxes will be applied. If they were, then I would not be bidding or buying these items. PayPal does not state that they add taxes so I do not understand how this is legal to happen.
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WTCA
New Community Member

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.  

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parksfamilyx4
Contributor
Contributor

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.

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Imac7065
Member
Member

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.

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feesontaxes
New Community Member

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.
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feesontaxes
New Community Member

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

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FORDMANTED
Contributor
Contributor

I aggree that PP is not living up to their deal of 2.9 % plus 30cents since they are collecting extra monies off shipping and sales tax which makes our seller cost bounce higher. This needs to be changed or we are getting RIPPED off. When you call about this ; you are told that we sellers agreed to PP contract that says PP collects 2.9  + 30 cents on transaction. That is their version-Ours is we agrred on 2.9 on Eb sale plus 30 cents-NOT the whole charge. This whole deal SUCKS.  This needs to be CHANGED or rewording to save sellers and buyers the extra fee charges. HELP    FORDMANTED

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