Anyone have US buyers being charged duties for items under the threshold?

[happy_pigeon]

Hi all—we've received a handful of reports from sellers using global eBay sites, including Canada, that ship to buyers in the US. In these cases, buyers have let their seller know that they were charged duties for their item, even though it was valued at well under the $800 threshold.

We're trying to figure out why this may be happening. Has anyone here received a similar complaint from a buyer recently (within the last 3 months or so)?

[ypdc_dennis]

No duty problems reported with my USA sales.

My understanding of the $800 US duty exemption was that it was for personal purchases and does not apply to business purchases.  So perhaps items being shipped to a buyer using a business address -- and getting flagged.

Also origin of goods -- the Trump tariff war on some Chinese made goods might be coming into play.

-..-

[ricarmic]

No, but I don't sell dutiable goods anyway... (postage stamps).....

[momcqueen]

No, and I sold a high-value dutiable item to a USA-based buyer that should have been flagged for duty owing yet no word from the buyer about that.

Strange. Maybe one contingent of border agents became overzealous in a particular geographical area.

[reallynicestamps]

Is it possible that the buyers are confusing the new 'internet sales taxes' with duty?

Cross-checking  buyer addresses with the states that are now enforcing the tax could be useful.

[recped]

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@reallynicestamps wrote:

Is it possible that the buyers are confusing the new 'internet sales taxes' with duty?

Cross-checking  buyer addresses with the states that are now enforcing the tax could be useful.

---

Yup this is it!

I know a fair bit about the Marketplace Facilitator laws that are now being applied. What I do not know is if eBay is collecting properly on items purchased from outside the USA. I can understand taxes being collected on listings on .com but I'm not so sure they should be charged on .ca listings when purchased by a US (WA & MN) resident.

[forester_studios]

Had a sale to Washington state tonight. There was a message in the item details stating something to the effect that ebay had collected taxes from the buyer.

[happy_pigeon]

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@reallynicestamps wrote:

Is it possible that the buyers are confusing the new 'internet sales taxes' with duty?

Cross-checking  buyer addresses with the states that are now enforcing the tax could be useful.

---

This is a really good insight! Thank you, I'm going to pass that along to the team looking into this.

[of-the-world]

I have not had this experience reported.

I sell mostly vintage items, never over $800 a pop (usually)  so if this was the case I would be furious and would definitly take some action against whichever postal service was trying to extract money from untaxable items.

[reallynicestamps]

Except--  in Canada, an item, including used/vintage, can be duty-free and still be assessed for sales taxes.

Whether this is true or not in the three US states charging the "Internet Sales Tax" is another question.

Somewhat off topic, when the new NAFTA (CUSAM? MUSAC?) is approved by Parliament and Congress, our duty free allowance will rise to $180Cdn (~$135US) but sales taxes will be levied on imports over $40Cdn (~$30US).

We may need another 5000 post thread to deal with that.

[momcqueen]

I can already hear the shrieks of misdirected righteous indignation. 

[rose-dee]

I think 'reallynicestamps'  is correct about U.S. state internet taxes.  I've been seeing this for some time now on another site where I list.   The taxes are inconsistent across the U.S., but some are at significant levels.  I still don't understand how these are applied, since on three separate sales to Washington State, there were three different tax levels shown: 10.07143%, 9.11111%, and 8.3125%.  Other states have lower percentages, but there are all sorts of different levels, and many still have nothing.   

What the "other" site has done to handle this is that they have incorporated the U.S. internet tax table into their checkout system.  The tax is added onto the sale up front, as a separate line item (including an indication of the % of the tax), so the buyer can see exactly what they are paying. 

This has affected my sales to the U.S., but the current high de minimus for U.S. buyers ($800) may offset the sting of these internet taxes.   Still, on goods that were under $200 (the previous de minimus), U.S. buyers had been used to paying nothing anyway, so this is a bit of a kick in the backside.  

I think it was only a matter of time before governments realized there was a windfall to be had from taxing the mere act of buying online.   However, if these taxes start to depress online buying activity, it may ultimately not be a winning strategy for those states who have adopted it.  People may start going back to the malls for the sake of saving that 8% or 10%.   There might be a role here for eBay HQ in lobbying states that have instituted the tax to abandon the idea and states who haven't yet adopted online taxes, but are thinking of it, to reconsider. 

[femmefan1946]

@rose-dee

People may start going back to the malls for the sake of saving that 8% or 10%.   

Except I was under the impression that the 'internet' sales tax was the same as the 'cash register' sales tax.

I found this about Washington State:

https://www.avalara.com/taxrates/en/state-rates/washington.html

And apparently they have a range up to 10.4%. This seems to include municipal sales taxes.

[rose-dee]

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@femmefan1946 wrote:

@rose-dee

People may start going back to the malls for the sake of saving that 8% or 10%.   

Except I was under the impression that the 'internet' sales tax was the same as the 'cash register' sales tax.

I found this about Washington State:

https://www.avalara.com/taxrates/en/state-rates/washington.html

And apparently they have a range up to 10.4%. This seems to include municipal sales taxes.

---

Ah, that may be.  I know very little about the messy hodgepodge that is the U.S. tax system, except what I see being applied to my buyers' online invoices.  

[recped]

There are only 50 States (of which 2 or 3 have no Sales Tax) but there are thousands of different rates because for most States there is a State wide percentage and a local Municipal percentage. The latter varies from county to county so some States have a hundred different rates.

There is no "windfall" for the States, all they are doing is recouping lost revenues due to residents rarely if ever complying with the voluntary declaration and payment of "Use Tax" (Sales Tax) that is on every State Tax Return.

Just as Canadians had to deal with this when GST was introduced in 1991 Americans days of tax avoidance by buying out of State are coming to an end.

What's really funny is how they are getting all uppity about it when I've had to constantly read about those bad furriners who ask sellers to under-declare so they can avoid taxes, how they are dishonest, not to be trusted and they should pay their taxes without complaint.

Now the shoe is on the other foot!

[lotzofuniquegoodies]

The concept of charging ANY tax on a previously used item never made sense to me. It was collected once. It should be over and done with. Difficult to document with used items which are a very large portion available with  online sales. Have a couple of yard sales to get rid a Bon Jovi t-shirt from the concert you were at in 1995 or a set of tires you no longer need...Fine!!! Have more than several yard-sales and you've become a corporate entity and the tax police will be showing up....eventually. Go figure!! Strange days indeed!!!

https://www.youtube.com/watch?v=l0zaebtU-CA

-Lotz

[snoopwiz]

What's really funny is how they are getting all uppity about it when I've had to constantly read about those bad furriners who ask sellers to under-declare so they can avoid taxes, how they are dishonest, not to be trusted and they should pay their taxes without complaint.

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[tryubik-useonlyasdirected]

So eBay is now required to charge a tax on their services provided to customers in certain states?

Given the item sold is owned by a foreigner the tax can only then be applied to the service provider's services, correct?

So will eBay be disclosing the user fee for buyers? Or do they use the seller fee as a base of the services provided? So basically buyers now charged a service fee based as the tax percentage against the sale price?

I'm confused.

[ypdc_dennis]

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@tryubik-useonlyasdirected wrote:

So eBay is now required to charge a tax on their services provided to customers in certain states?

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eBay and other large marketplaces are being required to COLLECT sales tax from BUYERS for PURCHASES shipped to some USA states and to Australia.  Sales tax rates are set by the destination state/country. 

Not to be confused with the sales tax that eBay collects from SELLERS on eBay selling fees. Canadian SELLERS are charged GST/HST/QST on their selling fees (shown on the monthly invoice). 

[hlmacdon]

I only have experience with a few states, but from a few sales and purchases ebay is collecting taxes for shipments to destination states with an online sales tax regardless of the shipping origin or seller location. I'm not aware of all the particulars of the various implementations but I would assume this is standard based on the marketplace being judged as the one with substantial sales volume into the state rather than the seller. Other marketplaces like the far east 40 thieves function in the same manner due to their US subsidiary. Net net you save 20%+ shopping directly rather than a marketplace in some cases, so queue the coupons. Reminds of me when HST decimated sales of some regional online retailers.