Email claiming the sales tax they collect on registered seller's behalf as their own

[ibccshop]

Not sure if anybody else has questions as to why eBay is claiming or going to claim the sales tax they collect on behalf of registered seller's as their own, but they are.  Oh and by the way the email address they say to use for inquires will not accept emails.

Below is the message I received from eBay outling this:

Hello Randy,

A pleasant day to you. I hope this email reaches you well.
Thank you for reaching out to eBay customer support.

Thank you very much for sharing your concern. We are more than glad to be of assistance to you in your needs. My name is Rome, your trusted eBay advisor.

I appreciate your time and patience with this. I totally understand that this is about the Canadian Tax and we received the authorization form successfully.. Please be informed that eBay will be responsible for the collection of applicable taxes on all transactions intra-Canada and will be reporting the taxes collected on their registration number directly to the appropriate government agencies using eBay's registered tax ID. Randy, I appreciate your professionalism and I humbly ask to kindly extend your patience with this.

If you have further questions about this you mail email us at CanadaPST/GST@ebay.com.

We trust that this information helps and we thank you for your patience. Again, thank you for choosing eBay. We appreciate your business with us. Stay safe always.

Thanks,

Rome N,
eBay

[flipistics]

Unless you're using the simple method of reporting (maybe), my understanding is it shouldn't matter who collects and remits the tax. This is the same if you auction items off with an auctioneer. I'm pretty sure either (but not both) of you can collect and remit the tax under the collector's number. eBay has stated that they will be remitting it under their number. It means you potentially lose out on a little interest or additional working capital, but otherwise it shouldn't have an effect on you. You'll just get a bigger refund at the end of the year as you won't be offsetting what you pay with what you collect.

The email address we were given to send in the collection forms was CanadaGST/PST@ebay.com. I wonder if someone screwed up their template in their message to you, or if they set up two different email accounts with those reversed - because that would never be confusing to ANYONE...

[lotzofuniquegoodies]

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@ibccshop wrote:

Not sure if anybody else has questions as to why eBay is claiming or going to claim the sales tax they collect on behalf of registered seller's as their own, but they are.  Oh and by the way the email address they say to use for inquires will not accept emails.

Below is the message I received from eBay outling this:

Hello Randy,

A pleasant day to you. I hope this email reaches you well.
Thank you for reaching out to eBay customer support.

Thank you very much for sharing your concern. We are more than glad to be of assistance to you in your needs. My name is Rome, your trusted eBay advisor.

I appreciate your time and patience with this. I totally understand that this is about the Canadian Tax and we received the authorization form successfully.. Please be informed that eBay will be responsible for the collection of applicable taxes on all transactions intra-Canada and will be reporting the taxes collected on their registration number directly to the appropriate government agencies using eBay's registered tax ID. Randy, I appreciate your professionalism and I humbly ask to kindly extend your patience with this.

If you have further questions about this you mail email us at CanadaPST/GST@ebay.com.

We trust that this information helps and we thank you for your patience. Again, thank you for choosing eBay. We appreciate your business with us. Stay safe always.

Thanks,

Rome N,
eBay

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Is it possible eBay is collecting on behalf of sellers as a service for the fee they collect and as a perk? Similar to the "special discount" they offer for eBay Labels?

-Lotz

[marnotom!]

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@lotzofuniquegoodies wrote:

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Is it possible eBay is collecting on behalf of sellers as a service for the fee they collect and as a perk? Similar to the "special discount" they offer for eBay Labels?

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I assume you mean "registered sellers" as it appears as though different sites are handling this differently for those sellers who are already registered to collect and remit GST/HST.  Otherwise, the answer would be, "They're doing it because CRA and provincial authorities want eBay to collect taxes from all relevant sales."

[lotzofuniquegoodies]

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@marnotom! wrote:

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@lotzofuniquegoodies wrote:

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Is it possible eBay is collecting on behalf of sellers as a service for the fee they collect and as a perk? Similar to the "special discount" they offer for eBay Labels?

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I assume you mean "registered sellers" as it appears as though different sites are handling this differently for those sellers who are already registered to collect and remit GST/HST.  Otherwise, the answer would be, "They're doing it because CRA and provincial authorities want eBay to collect taxes from all relevant sales."

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As long as its being done correctly and there will be no issues for sellers down the road. I don't have to be happy about it but it still needs to be done correctly so sellers are not directly affected when they try to file or make any required claims they can legally make.

-Lotz

[recped]

I'm kinda happy with it because it eliminates the pricing advantage that non-registered seller have had.

[recped]

I don't have questions because I read the notifications that eBay sent out over the past month or so.

By the way, they are not "claiming" they are doing it as of today AS REQUIRED BY THE FEDERAL GOVERNMENT (and Provinces).

[ricarmic]

Yes but it also on a grander scale for me at least makes my US counterparts cheaper than me (that's part of the reason before today I was a taxes in kinda guy).

However US folks hate to mail to us pesky Canadians, especially the types of stuff I sell, so that will help.

[lotzofuniquegoodies]

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@recped wrote:

I'm kinda happy with it because it eliminates the pricing advantage that non-registered seller have had.

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Correct me if I am wrong but don't high volume sellers have access to discounted seller fees, cheaper shipping with CP/etc, able to promote like crazy to get the benefit of higher view ranking? And guessing also, because they have everything in place... tax credits?

-Lotz

[ricarmic]

Sure those are things volume sellers have, however competing against someone who can sell based on an acquisition cost of "zero"* is definitely a challenge with the added problem of a 5%-15% tax discount on top.

Plus depending on qualifying, they can probably afford more promoted costs than a "reseller" could.

*Zero means they're getting rid of their own stuff and they don't care what they get, anything is a bonus.

[msmaggie060]

@ricarmic 

Hi, just wondering if you can answer a question for me: I don't sell enough to have registered to collect taxes but I wonder if it will be to my advantage to now register so that I can get back some of the sales taxes I have to pay when making purchases for my store. Thanks.

[recped]

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@msmaggie060 wrote:

@ricarmic 

Hi, just wondering if you can answer a question for me: I don't sell enough to have registered to collect taxes but I wonder if it will be to my advantage to now register so that I can get back some of the sales taxes I have to pay when making purchases for my store. Thanks.

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Yes it definitely can be depending on the amount of Input Tax Credits you accumulate.

It will instantly save you 13% on your domestic shipping, eBay fees,  packaging materials,  goods purchased for resale etc.

To get a rough idea of how much you could get in refunds just roughly add up what you spend on the list above and calculate 13% of that total.

The reporting is easy and since there is not longer a pricing advantage it's "foolish" to let the government keep that money. I file quarterly, running the reports, calculating the amounts for the reporting form, digging up my receipts, filing and paying (if neccessary) online, the whole process takes 30 minutes or so.

[ricarmic]

@recped is faster on the draw, I think you'll be surprised how much you pay in "inputs" GST/HST a year.... all of which are ITCs...as recped identified

[recped]

I just did some rough calculations based on some assumptions.

A seller with $500/month eBay gross sales, ships about a third of their sales within Canada, buys some packaging materials and pays tax on a modest amount of what they purchase to sell.

Probably looking at a refund of $200 - $400 annually.

For an annual filing* that is definitely worth the effort.

* I'm on quarterly because that's what CRA wanted based on my revenues in 1991 when GST came into effect. If your gross is below 30k you can definitely file annually if you wish. There is also "simplified reporting", I'm not familiar with the good or bad on that but you might want to have a look.

One other benefit for low volume sellers is that it forces you to keep records and actually see what you are (or are not) actual making (I'd bet for some it could be shockingly small).

[reallynicestamps]

You'll just get a bigger refund at the end of the year as you won't be offsetting what you pay with what you collect.

Could you explain this for the terminally confused like me?

I pay out sales tax when I buy.

If I were registered, I can reclaim those taxes.

If eBay is collecting the customer's sales taxes, I can't reclaim them.

Please use small words.

[flipistics]

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@reallynicestamps wrote:

You'll just get a bigger refund at the end of the year as you won't be offsetting what you pay with what you collect.

Could you explain this for the terminally confused like me?

I pay out sales tax when I buy.

If I were registered, I can reclaim those taxes.

If eBay is collecting the customer's sales taxes, I can't reclaim them.

Please use small words.

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Normally, if you have a GST/HST number, you take the tax you collect on your sales and subtract from that the tax you pay to run your business (things like obtaining goods, shipping, supplies, etc). If that number is positive, you send the government that amount. If that number is negative, the government sends you that amount. Since eBay is collecting and sending in the tax themselves, you basically just get a full refund every year on the amount of tax you spend to run your business (just talking about selling on eBay for this example).

There's two accounting methods that you can elect to use when you set up your tax number. A quick method, in which I think you basically multiply a fixed rate by your total sales and remit that amount (I believe there's a provision there for subtracting the tax collected by eBay, but I'm not positive), and a normal method where you track all the taxes you collect and all the taxes you pay, and subtract. In the quick method, you don't subtract the tax you pay on supplies and other items. That percentage is estimated and built into the formula.