Ebay is collecting sales tax on top of their calcuated shipping cost (which already includes tax)

[westcoastart2]

I am working on my Q3/22 GST/HST sales tax return for Rev Canada.

This quarter Ebay started its policy of collecting the GST/HST on Canadian sales.

Ebay also has a shipping rate calculator which calculates the shipping cost based on the package size and weight entered into the ebay listing.

Ebay uses the Canada post shipping rate calcuator to come up with its calculated shipping cost.     The Canada post shipping rate calculator includes sales tax in its cost.

I have noticed that ebay is charging sales tax on the total invoice cost (item and shipping).

However the ebay calculated shipping cost already includes sales tax.

This means buyers are being over taxed by Ebay.

Ebay is charging buyers sales tax twice (once in the calcuated shipping cost), and again on the final invoice.    Infact ebay is charging sales tax on sales tax - because they are charging sales tax on the GST/HST/PST included in the calcuated shipping cost.

This was never a problem before when I sent the invoice.    In the past, the invoice never included sales tax on the shipping cost (because that shipping cost already included sales tax).

How do we correct this problem?

[flipistics]

The short answer is ... you don't. They are basically two separate transactions, and therefore have to be taxed separately. If eBay didn't include the tax in the shipping estimate, sellers (without a tax number) would receive less for shipping than what it costs them.

Ignoring the shipping, the same issue occurs with eBay's fees as well where we're charged fees on the taxes and then are charged taxes on the fees. As far as I know eBay is doing it as mandated by the government. I highly doubt voting in a new government would change it either as it probably wouldn't rile up any of the voter bases enough.