HST/PST Collection and Remittance

[low_flite]

I assumed that eBay was doing this on our behalf since July 2022, but after a conversation with 2 X CRA agents today, they explained there needs to be an "agent election" agreement in place i.e. the GST506 form.

Did any of you fill one of these out with eBay ? I did not.  (At least I don't remember filling one out)

Now, after this conversation with CRA, I don't understand how eBay can send a tax authority any collection on our behalf without an official election place.

Honest questions...

Since I don't have an agent election GST506 with eBay, shouldn't the tax collected by them at the point of purchase be sent to me in the payout schedule for me to forward to CRA on my own?

Either way, how can you (or CRA) account for the amount sent to the government by eBay when you file your HST/GST return?

I apologize if all this has been covered elsewhere, but I can't find a clean answer and there is nowhere I can find where eBay just explains the process upfront and their email: CanadaGST/PST@ebay.com doesn't work.

[kawartha-ephemera]

Disclaimer: I'm not a tax expert.

Terminology is important when speaking with the CRA. In my opinion, to say that ebay is collecting GST, HST and other sales taxes on our behalf is incorrect. They are charging and collecting these sales taxes because governments enacted legislation making it their responsibility to charge, collect and remit said taxes. Their responsibility in this regard is completely independent from marketplace sellers. Possibly very large corps with an Ebay presence might operate under a different arrangement than the average run of the mill seller.

Ebay is not acting on our behalf here, but even if they were somehow deemed to be doing so the Ebay user agreement would almost certainly contain enabling language.

[electronicifycanada]

The marketplace facilitator tax is for any marketplace that allows other sellers to sell goods or services. They must check if the seller is registered, the buyers location, and if the seller is in a province or state that has this law.

If these things line up, they must charge the sales tax to the buyer and remit it for the seller. They're telling the CRA the sellers info, buyers info, what sold for what price, etc. The CRA knows everything on eBay now cause that law is Canada wide.

As for America they only have a couple states with that law now, they're trying to expand it but there's always going to be a couple states that will never have it cause they banned sales taxes.

I have been dealing with this lots lately for work.

[reallynicestamps]

You as a buyer have to pay sales tax in your province or territory.

EBay is required to see that appropriate sales taxes are paid by buyers.

In order to collect these taxes, eBay bills the buyer through the invoice and the buyer pays the invoice to the seller.

EBay immediately takes the sales taxes and remits them to the tax departments.

But it is the Standard Practice in the financial payments industry to charge fees on the ENTIRE amount that is collected, which with an eBay sale includes the selling price, the shipping charge, and the buyer's sales taxes.

Because the fee is not on the tax.

The fee is on the payment.

Alternately, eBay buyers would be required to register to collect taxes calculated  for all thirteen Canadian provinces and territories, plus over 50 American states, counties, and cities, plus each of the countries in the EU, the UK and Australia. I'm pretty sure Japan and South Korea also have sales taxes on the books.

Which would be a fun way to spend a sunny afternoon.