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

[0ldgeezer]

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.

[parksfamilyx4]

Now eBay puts this out today

Once we start collecting tax in these states, you do not need to take any action. There are no extra charges or fees for this service. Prior to these dates, please continue to collect and remit tax in these states and comply with any other applicable requirements they impose.

Basically a lie. It's not costing me as much as others, but basically I'm being required to pay part of the sales tax for an item that somebody is buying from me?!? Do you go to the grocery store and buy something and they have to pay part of the sales tax for your candy? Sales tax is supposed to be a certain percentage of the item cost that the BUYER pays, not the seller pay part of.

STILL UNACCEPTABLE, PAYPAL!

[lovetosell]

How do we edit this post to remove "solved"?  Anyone know?

This question / problem has NOT been solved.  It is being addressed by those posting here; those of us who are frustrated and want an answer as to how this can be legal and acceptable.

Do PayPal moderators ever pipe in on this? I have posted very little on PayPal community so not very familiar with how this works.

Kudos to those who are bringing this to the attention of their state AG's.  This situation will take more than our complaining here online. Action needs to be taken to stop this thievery.   I am grateful for those of you who sound experienced and can help guide those of us who are novices.  I hope everyone reading this will spread the word and contact their state's AG, consumer affairs divisions, etc.

[sol123]

I'm replying to this post because I'm not being allowed to reply to the topic. The problem is that ebay is collecting sales tax on the gross amount of my sale. Then paypal takes their fees off that total amount. This is already wrong because the tax isn't money I'm seeing. Then after I've paid extra in fees on this "extra" amount of my sale, the gross amount of sales tax is deducted. So I pay twice now. First the fee on money I don't get, then the extra I lose because the gross amount on which I paid the extra fee is taken from my balance. I'm in PA. As a private citizen I am not required (actually not even legally allowed) to collect state sales tax. If I sell through a newspaper ad, mailer, or at a flea market, I am not required to collect sales tax. If ebay feels the need to assess sales tax, that's fine. But the buyer should be responsible for the entire cost. The seller shouldn't be penalized. Ebay and paypal need to resolve this so if they add a tax to the amount, the entire amount is deducted prior to paypal levying their fees. The transaction details clearly itemize the amount as sales tax being added, so surely they can handle it differently. Charging me a fee on the tax is clearly wrong, and probably illegal as well. I haven't noted this behavior before because I'm a very occasional seller, not an ebay business. Just someone who wants to get rid of odds 'n' ends sometimes. I just made my first sale in over six months, so I don't think this was happening before or I would have noticed. As a casual seller I'm already hurting when I need to ship as the shipping costs have become horrendous. Now I have to lose more so someone else can pay taxes? This stinks.

[parksfamilyx4]

You are right, it stinks! And no, it wasn't happening before. EBay was collecting the tax until October 31. As of November 1, they changed it so we are "collecting" it in our PayPal, who then fees us on the total amount. Totally wrong for me to be paying someone else's sales tax!!!

[amok5555]

You are not paying someones sales tax the buyer is. What you/we are being charged for is the paypal fee on that tax which is theft by Paypal. There will be a class action lawsuit againt paypal. The practice will be stopped , the lawyers will make millions and paypal customers will get 2 dollars each if that. Total BS

[0ldgeezer]

This is not a case of sellers paying any sales tax for buyers. This is a case of Ebay being required to collect sales tax in their state, not in everyone else's state. Ebay took it upon itself to collect the sales tax for every state that passed a law taxing internet sales. That by itself isn't a problem, except I am already paying sales tax in my state for non ebay sales which complicates matters a bit. Ebay has no business in collecting sales tax for other states and then passing it along with the gross sales amount to paypal for collection and processing where sellers end up paying .029% on the sales tax. I think it really boils down to Ebay still owning PayPal. When a new seller joins Ebay, Ebay tells PayPal to withhold the sellers fu ds for a period of up to 20 days, until they have met the seller standards of Ebay. So it sounds like Ebay is still in control of PayPal, which is contrary to the government decision for them to break up and be individual companies. Really?? Anyone play monopoly? I hope I made this a bit clearer.

[keeddanch]

Not only does the eBay seller never possess the sales tax, even if they did, that is money that is tax revenue that is collected on behalf of each state's government.  It is essentially theft for PayPal to charge the eBay sellers their 2.9% fee on sales taxes that eBay is taking and the seller never actually chargers OR possesses at any point of the sale. 

PayPal should be charging eBay this 2.9% fee on the sales tax portion, and then eBay can decide whether or not they want come to some arrangement with PayPal to reduce it, or whether eBay wants to try to deduct these PayPal fees from the collected tax money before they pass on to each state.

Lawsuits are coming and the bottom line is that two things will eventually change:

1. PayPal is not going to be allowed to charge the eBay sellers their fee on sales taxes that the eBay seller isn't ever charging or collecting and PayPal or eBay will ultimately be required to pay these fees back to each eBay seller, and

2. Etsy, eBay, Amazon and other "marketplace facilitators" are going to end up being required to implement a system that allows each individual marketplace seller to opt out of having an out of state buyer's state's sales taxes auto-collected until the marketplace seller reaches the nexus requirements for each state (usually $100,000 and/or 200 transactions).

Bank on it.

[sol123]

Not sure how this will work since I'm new to the forum here. I decided to go old-school and have sent an old-style letter by US Mail to the Office of the President and CEO of PayPal. Figured it can't hurt to start at the top. I keep hearing that since on-line communication is so fast, companies place more faith in someone who takes the time to put pen on paper like it used to be, so I thought I'd test this out. In the letter I detail my concern with this (assumed unintended) side effect of the new ebay tax collection method. I back it up with my own recent transaction as an example. I make the argument it shouldn't be too big a problem to have the tax removed BEFORE calculating fees, so sellers only pay on what's theirs. It has my return address, phone numbers and email address. Figuring it'll take a couple of days to get the letter and some time before someone reads it, I'll probably see some response in a week or so. Even if it's just "thank you for writing" I think someone will respond. I'll post again if and when I get some response and let y'all know what it is.

[amok5555]

Thanks for your efforts. Let us know. Agree it should not be a problem for them but they know exactly what they are doing. Millions more per year to them at sellers expenses.

[DaisyDuke77]

I’m having the same issue. PayPal blaming eBay. eBay blaming PayPal. I contacted the local news channel while on the phone with PayPal. I’m all for a lawsuit.