New Taxes to the US ??!!!!

[vetteuser]

 On my 1st sale to the US (California) in a long time, My sale and payment info shows I’m paying a tax…on already slim profit margins on what I’m selling… 

I’m Canadian, Selling in effect personal items that should be except from GST or provincial taxes.. and only tax seen had to pay before was on my eBay.ca store subscription. 

On this sale, as a seller I paid CDN$  $5.69 tax on a $69 item with $20.15 shipping cost, (of which the buyer is getting a $13+ refund sending through a USPS relay service)  And no indication what this tax is in my eBay or Paypal sales payment info..  

 Looking like only putting about $85 in my account for…. On top of an estimated further 14% loss from 10% eBay and PayPal  $3.81 fees… . 

? Is this the product of the new NAFTA Deal. Unknown how was going to be formulated ? Just implicated ? Where foreign or any sellers now being charged internet taxes.. ? and who are they being paid to….? 

But through another post found who was collecting taxes now… this tax I paid looking like CA sales tax…without further looking to read al CA's tax info now... that I would have thought would normally be paid by the buyer…not deducted from me…  

I’m not sure what I missed in my eBay notifications about possible future tax collections on items sold to the US… Initially thought or only read about  was only going to be state sales tax charged on top of the purchase price to the buyer and redeemed to the state.. and collected by eBay Paypal on purchase... and not all states on board for it at that last notification…if not also not remembering seeing any links to look into more details... 

 While it seems fair that if a particular state or country has a required import sales tax on purchased items, it usually the buyers responsibility just the same as if I buy from anywhere foreign and Canada customs post might collect on arrival.. but this looks wrong on numerous levels…or like another seller fee taking all the fun out of selling anything in an already bottom feeder marketplace for some kinds of items..   

[vetteuser · Accepted solution]

Further investigation looks like CA has implicated a Marketplace facilitator tax in Oct / 19 that includes internet sales to a tune of 7% paid by sellers....for the 2020 calaenfder years then drops to 5% in 2021... 

   That looks like might have to take CA off my list of places will sell and ship anything to without covering that extra tax if can't practically absorb in the purchase price... 

That item sold for $69 might be the only item I sell this month and after costs to barely paying to maintain an eBay store... or buy a lunch after paying them... effectively selling that item for virtually nothing for the effort..  

[esclyons]

while the sorta new tax, for usa buyers, will show up in paypal, you as the seller are not paying it, the buyer pays the internet tax, you do however, pay your paypal fees, on the tax amount..

[mrdutch1001]

This is not an eBay thing, in fact this is not even unique to eBay... this is a USA states Gov't thing whereby this USA law states that Marketplace Facilitators = sites that have multiple vendors such as Amazon, eBay, Walmart, Etsy and many others are required to collect sales tax on  internet sales to those states that have joined in on this tax collection process which now includes approx. 40 of the US states...

The taxes are paid by the buyer, but eBay has chosen to have those taxes collected and processed as part of the whole transaction which is processed through PayPal, thereby the seller pays the fees on that transaction when payments are processed through PayPal.

[ypdc_dennis]

Not new. USA state sales tax collection was added to the Seller's eBay payment info starting last November (before that it was a separate transaction that ebay handled directly).

The Seller does not get charged the sales tax. The Buyer pays the sales tax, then PayPal gives the tax money to eBay.  There is no eBay fee on the tax, but PayPal does charge their 3.7% fee for handling the tax money.

An example:

Tax is collected from buyer then paid to ebay, who pays the State. In this example the PayPal fee cost me 5 cents extra.

-..-

[femmefan1946]

While we do not pay the Internet Sales Tax , we do pay Paypal fees on the passthrough amount.

Because our IST paying customer is in the US and paying with a US PP account, we pay 3.4% of that sales tax to PP.

I'm not a big seller and my products are mostly pretty cheap, but since December $216.87 has passed through my PP account in IST costing me $7.37.

It's not the principle.

It's the money.

[vetteuser]

I see it now..

I originally didn't notice eBays  order detail total was including the tax and only saw the - for the tax amount,,,,. and similarly when originally looked at my PayPal receipt it didn't click in the $85 deposited in my account for the $90 transaction was also minus the PayPal fees...as all my deposits usually are...and + the near $6 tax..  

[recped]

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@femmefan1946 wrote:

While we do not pay the Internet Sales Tax , we do pay Paypal fees on the passthrough amount.

Because our IST paying customer is in the US and paying with a US PP account, we pay 3.4% of that sales tax to PP.

I'm not a big seller and my products are mostly pretty cheap, but since December $216.87 has passed through my PP account in IST costing me $7.37.

It's not the principle.

It's the money.

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I have always paid PayPal to collect GST/HST on my Canadian sales. As a merchant since the mid-70's I have always paid processing fees on any sales made with a credit card.

Online merchants got away with not charging taxes for decades and buyers got away with evading sales taxes (in the US they are supposed to report out of state purchase on their State tax returns and pay the required taxes), compliance with these "use tax" laws have been on the books for decades but compliance has been estimated at less than 5%. Local governments need this money to provide services and as money gets tight they could no longer sustain the current system given the dramatic rise in out-of-state purchasing over the past 10 - 20 years.