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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0ldgeezer
Contributor
Contributor

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.

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lovetosell
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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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0ldgeezer
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Contributor

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.

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Obs-Sec
New Community Member

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.

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pbcabc
Contributor
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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!

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DreamWeaver_IL
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Contributor

A sale I made last week was the first where I have encountered this new sales tax issue. eBay does not charge a fee on the sales tax, but PayPal does. Between eBay's USPS calculator being off nearly $12 [I accurately entered box size & I own a postal scale], the eBay fees and the PayPal fees, I am out over $38 on a $150+ item. I will attempt to use local pickup through Craigslist and Facebook Marketplace before I post any new items on eBay. I realize it's a smaller market, but it will be my new first choice for posting. Thanks for the suggestion of Zelle, or similar, for accepting payments.

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amok5555
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I tell people that all that the time "paypal always free" ha right!

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amok5555
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Contributor

 I've been on Ebay for over 22 years.  It gets worse and worse for the consumer

Back in the day you could pay for an item and accept payment however you wanted. Check or even  CASH.

They have locked it down and now it is paypal or nothing.

 

What is this "ZELLE" you are referring to? Is that an acceptable payment option on Ebay sales? 

Please elaborate. Thanks

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Qwirky
New Community Member

I found this information regarding who is to pay sales tax in other states other than the state that I live in.  The laws have changed but it is pretty clear to see that unless I have a physical presence in any state other than the state I am currently residing in I should only be required to have buyers from my state pay sales tax on their purchases unless I am sending the item directly to an ebay facility for distribution such as Amazon FBA.  I do not see this is the case with ebay since we ship directly to the customer and do not ship to ebay.  Please read!!!

 

https://turbotax.intuit.com/tax-tips/self-employment-taxes/sales-tax-101-for-online-sellers/L4uTQCaI...

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amok5555
Contributor
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Thank you for your efforts. I pray their is a class action lawsuit against Pay Pal. I have not sold much in  awhile but have been on ebay 22 years and counting. Was shocked to see 2 items sold for same prices but paypal charging me a fee on the sales tax that THEY collected that us as a consumer never asked to be implemented in the first place. Bad enough they charge fee on Shipping cost. 

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