Fees on taxes

[ruoglik]

I have been with ebay for 20 years.     I agree to their fees as it is a good site to sell on.   

At some point in time, they decided they will collect taxes (I only sell used goods, so the government is getting some nice money .... tax me on income, tax me when buying the item with my net of tax money, then tax someone else on the item again when I sell it).   My issue is more with the fact their fee is on this money I haven't even seen, they do all the work and charge me for it.

For example 2 years ago I sold something for $100.  My fees (assuming 10% to not make it confusing with the tax rate) would be $10.   Today I sell the same item at the same price without anything but taxes changed.   I sell for $100.   The government charges the customer $13 so they have to pay $113.  They take the tax and submit it without me being involved.  So my portion is still $100, governments portion is $13.   My ebay fees is now is $11.30 because they charge me 10% of the total including tax.   Nothing changed on my side at all.

I feel like this is sneaky and something I didn't agree to at all.   Who can we talk to about this?  Will ebay even consider making things right and charge fees on the correct amount?

[marnotom!]

You agreed to have your fees charged on the entire value of the transaction.  Taxes add to the value of the transaction, unfortunately.

[byto253]

Just the way it is now.  It was a back door fee increase.  The topic has come up many times before.   eBay gets to pretend fees did not go up while increasing revenue.  Taxes on the shipping cost, and eBay fees on it all.  Really no point in banging your head against the wall about it, it is not going to change.   

Some folks look at it as eBay covering the cost of collecting and remitting taxes. which at 13.5% I think is rather generous.  IMHO this has become a nice way to increase the gross margin.

Just have to look at the fees you will pay and decide if an item makes sense on eBay or not.    It makes lower value expensive to ship things pretty marginal a lot of the time. 

[femmefan1946]

Payment processors from the Diner's Club in the 1940s to Paypal now and Managed Payments have as Standard Practice charged their fees on the ENTIRE customer payment.

We were paying fees on Ontario PST when we got our first Moneris account in the late 70s/early80s.  And on GST when the Conservatives brought that in.

Fun fact-- all your fees, including that part of the MP fee that is related to sales taxes, are deductible tax expenses.

On a $100 sale to Ontario with Free Shipping, your buyer pays 13% HST or $113.  You pay eBay fees to MP of $14.57.  Of that $1.67 relates to the sales taxes your buyer paid.

The federal requirement that venues charge sales taxes in Canada came in about 18 months ago. Perhaps longer. EBay and Amazon were among the organizations lobbying against it.

[elismenon]

I sold something for 50 dollars and eBay took 27 % in total with tax. I could collect taxes and show expenses for a business. Does eBay show these taxs agaist their operational profits? (Lessen the taxes on business)

[ricarmic]

Just as a note, if you were collecting taxes they aren't an expense, they are gathered and the "extra" is passed on to the government. (It is much more complicated than that).

Ebay doesn't make anything from collecting the taxes, I expect it cost them many millions of dollars changing all the applications to make it happen for the relative governments who made them do it, ie they probably hated having to do it as much as us.

Certainly the fees being added for shipping, taxes etc is a (newer) pain but it is a known pain and has to be included in one's deterimination of the profit margin required to sell here...

[kenneth686321]

@ruoglik 

Would you be happy if Ebay using your hypothetical example decided to only charge fees on item price + shipping only? But increase the fee from your hypothetical example of 10% to 11.3%. You would still pay the same $11.30 in fees on that $100 sale regardless. 

I'm guessing that you would not be satisfied.  

Ebay wants a certain amount of fees from each sale made. How they calculate that fee is up to Ebay not you.  Whether its a lower % on item price + shipping + tax or a higher % on just item price + shipping 

[reallynicestamps]

they decided they will collect taxes

The decision to collect taxes for online goods was made at the federal level

You can contact your MP about it at

House of Commons

Wellington Street

OTTAWA ON

K1P 0A6

You dont even need to stamp theenvelope. Just put OHMS in the top right corner.

And eBay and Amazon were two of the strongest opponents lobbying against the decision.

(I only sell used goods,

Used goods are still taxable, since it is the sale,not the product that is being taxed.

Even new goods have been taxed multiple times before you reach the cash register.

As raw materials. As purified materials. As wholesaled product. etc.

You do not pay the tax itself of course, you are paying eBay's fees on the customer's entire payment.

That part of the payment is the sales tax sent to the buyer's province/state/ country is Standard Practice in the payment processing industry and has been since Frank Macnamara invented the Diner's Club in 1950.

By the way, when your put your MP in the position of choosing between local small businesses, including thrift shops and consignment stores, and American -based online sellers, which side are they going to come down on?