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.

[jpatmc]

Great responses- except the sheep that say suck it up it's part of doing business. 

One thing not mentioned here is returns. Paypal does not refund you their fees on a return/refund to a buyer. So not only do you lose your 2.9% +.30 fee on a return/refund you also lose the tax fee imposed by Paypal. A triple dip loss. 

Also- my recent experience- I had a buyer contact me immediately after purchasing an item and said she ordered my item by mistake could she cancel the sale. The item was $199,99 plus $10.15 in shipping. Paypal included $18.63 in taxes and the charged me the FVF. So I walked with $203. But when I attempted to refund the amount shown on both Ebay and Paypal was $217. The both told me because of buyer remorse they were not ging the buyer back the shipping cost (even though the item never shipped). SO why $217? That is more than I physically received. Ebay requested $217 from Paypal which was automatically deducted from my account. Ebay told me it was the $199.99 plus the $18 in taxes!!!  Why am I paying more back to the customer than I received? On top of this-prior to eBay refunding the buyer- because the amount was wrong- I had to ask ebay to step in to help with the refund since the amount was wrong- originally it also included the shipping (total was $228). Because I asked ebay to step in the found me at fault and said I did not resolve the problem (I OPENED THE CASE!). SO they marked my account negative- which made my seller account dip to below standard. Now I am being charged an extra 5% on all sales. AND they refused to refund me the FVF $21!!!. So this transaction- something ordered by mistake- cost the buyer $10 in shipping and me the seller $21 in FVF, $8 in Paypal FVF (plus tax fee), $18 in taxes that I never received, and $30 extra dollars in FVF because of the extra 5%. I spent 3 days on ebay and PP customer service trying to resolve this. The Customer service reps in India are kind but had no clue or script to understand how I was scammed or willing to resolve this problem. 

Sign me up for the class action!

[Dangkness]

That sounds totally crazy that you got charged by eBay for a $21 fvf for an item you never shipped because they found a case against you that you opened. You need to get on eBay and request they call you back because you can’t call them and you need to explain the situation so they can reverse these faulty charges. I’ve never had a crazy problem like that on eBay for a seller canceling an item that is just crazy. The bull Shiite part is that PayPal is no longer refunding their fees on returns which should be illegal. You lose 2.9% plus $0.30 on any return you do that’s just crazy! And on top of that the reason I’m in these forums is because I’m mad about PayPal charging 2.9% on the tax they collect that I never see a part of. I’m reporting this to my state attorney general first thing Monday morning. This new PayPal practice has to be illegal!!!

[burnedseller]

I support this statement.  This problem has not been solved and you, as Paypal, are acting in a corrupt manner by marking it as such. 
You are going to be facing a class action, and I will gladly promote any effort to do so.  Collecting fees on sales tax is borderline criminal.

At the very least it's bad press, and I will be sure to contact all of the prominent financial magazines to give them this tip.

[tomthedmusa]

I don't know if what's being discussed here is illegal or not, but here is what I've observed:

- eBay started collecting sales tax from buyers in certain states early on in 2019

- sellers were told it would not affect them...and it did not seem to initially as the process was hidden from us...I didn't even know how much tax was being collected except when a buyer complained to me about it...end result, sellers were not paying any fees related to tax collecting

- beginning in November, sellers now see how much tax is being collected both on eBay and through Paypal and Paypal is collecting fees from sellers on the tax amount

- a lot of sellers (including myself) now feel like we're being ripped off because of these additional fees

Now here's a couple things that I haven't seen anyone else comment on yet:

- as a buyer who returned an item yesterday for a refund after paying the full price plus taxes, I received a refund for the item price, but no amount of sales tax was returned to me

- as a seller, I refunded a buyer when they returned their purchase today...eBay said they would be refunding the tax to the buyer without disclosing the amount and since I never received the tax money, I was fine with that....however, when I looked at the refund on Paypal, I saw the amount of tax being refunded, the Paypal fee reversal which included the extra fees on the tax being refunded (that's good)....BUT the amount of the refund paid by me was greater than the purchase amount minus the fees reversal....it seemed I was actually covering a portion of the refunded taxes!

   Purchase price = $6.95

   Total refunded to buyer = $7.61

   Fee reversal = $0.22 ($0.20 for fee on purchase price + $0.02 for fee on tax collected)

   Refund of Tax collected by eBay = $0.53

   Total for refund paid by me = $6.86

So, this all brings up several questions:

- if the buyer paid $6.95 + $0.53 = $7.48, why is Paypal claiming to refund them $7.61?

- if I'm sending a refund of $6.95 - $0.22 = $6.73, why am I actually paying $6.86?

- did the buyer actually get any amount of sales tax refunded because I didn't when I received a refund as a buyer?

- are sellers getting ripped off even further when refunds are made and buyers too if they're not actually getting the sales tax they paid refunded?

I'm curious to know if anyone else has seen similarities when dealing with refunds (as a buyer or seller).

[burnedseller]

I'm getting absolutely hammered with this charge on sales tax, and Paypal keeping the fees after a refund.
I just sold two items for $850, and had a return, lost all those fees. including $50 in shipping.

Just tonight sold an item for $950, and was charged over $47 for fees.  Does that make sense?
I did the math and overall I'm being charged 4.4% fees.  This is a sale in the United States, not international. 

Something is wrong here.  Aside from the criminal corruption that is going on when them stealing our money
when an item is returned, AND being charged fees on taxes, I'm being charged one a half percent more than I should be.

[Colvin2018]

I was bored last night and was wondering what the fee for a sale was. Sold item for 75+15shipping to U.S so $90 total. Regular fees are 2.9% plus $0.30 so $2.61+0.30= $2.91 but I was charged $3.83. So buyer is in U.S and pays in USD which is converted to CDN charging buyer 3.5% So buyer has paid a fee already, but wait has nothing to do with seller but I get charged .008% bringing it from 2.9% to 3.7% tax charged was $5.40 so my fee was based on $95.40 not the $90 I was part of so $95.4 × .037% = $3.53 plus .30 fee =$3.83 total So it should be $2.91 for $90 X .029=$2.61+0.30 fee. So at 3.7% it would be $90×0.037=3.33+.30 or $3.63 total. So even at inflated rate I am overcharged $3.83-$3.63=$0.20 Nice that Ebay is passing costs to us. Being in Canada we pay tax on seller fees so Ebay making money for fees passing charges to sellers for US taxes and remitting Canadian taxes. To top it off they tell me there is no area where I can print off U.S taxes paid "am Canadian and pay taxes when items are shipped from mailbox to Canada"they have charged me for shipping to Mailbox for items with no shipping to Canada. They tell me to go through the 1000+ transactions for the year and write them down. So overcharged, Charged taxes for both countries and we are to work it out ourselves. I hope a class action is launched I am sure millions in fees have been passed to sellers already with most not noticing.

[amok5555]

Is there something like eBay in Canada do you guys have your own online auction site may be used that instead. eBay is getting to be a ripoff pay pal to I understand they need to make money but it's going overboard

[Colvin2018]

Yeah we have Ebay.ca and another money making feature we get is list in canadian $ only so pay conversions over and over even though I have both currency's. They are nice and convert it to take yet another 3.5%

[sol123]

No response yet to the letter I sent snail-mail to PayPal about this. Sadly, ebay and PayPal are still married. There are few, if any, other payment options for small sellers like me. I'm a throwback to the early days of ebay (eBay, back then) when it was more like a huge yard sale (tag sale, flea market, swap meet...whatever you call 'em where you are). Just an individual wanting to make a few extra bucks from unwanted things, looking for a wide audience. In those days, pre-PayPal, we used money orders and even accepted personal checks. Sure it took a few days for the seller to get the funds. But ebay had a simpler fee structure with lower fees, and there no fees to payment processors who can change what they charge at will. If I were to say that I only accept money orders as payment, what do you think the chances are I'd ever make another sale? Until ebay is willing to authorize other payment methods convenient for small fry, it looks like my only options are to continue to accept being robbed by fees or stop selling on ebay. And there aren't many good alternative selling sites.

[amok5555]

Next month is my 23rd YEAR on Ebay. Imagine the original creators sold out long ago. Agree money order payments would not work unless you had A one of a kind extremely sought after item. These corporations can be slow to respond you might not hear anything until early summer lol