Confused by posts to the US Boards about MP fees.

[reallynicestamps]

I've been seeing many posters on the US Seller Boards state that they are being charged 12.35% (or so) in fees on Internet Sales Taxes when Paypal only charged 2.9%

Is this accurate?

Does it also apply to Canadian sellers?

I know that PP has recently raised its fees, while MP was slightly lower and may now be appreciably lower.

Could someone explain this simply -- keeping in mind I have trouble with numbers?

I'd rather get my instruction here than from the possibly better informed but often apoplectic US posters.

[ypdc_dennis]

Before MP, only paypal was charging a fee on the money value of the internet sales tax.

Early versions of MP did not charge FVF on the internet sales tax (that changed in 2020).

Under the current version of MP, the full FVF fee is being charged on the internet sales tax portion. So an extra 7-10% on the tax portion under MP compared to paypal days.     Which depending on the internet tax rate, would be 0.5% to 2% of the sale total.

[femmefan1946]

So we pay our full payment processing fee on those sales taxes.

Okay that's clearer.

As you say  12% of 5% is not a great deal.

I sell low priced items and most of my buyers are paying less than a dollar  in state tax. I pay more to eBay for the one percent Promoted Listings that occasionally sell.

[recped]

the eBay "simplified fees" which were introduced in the July 2020 version of Managed Payments applies to the full amoun t of the transaction (Item, Shipping, Tax).

The structure is the same for sales on .com and .ca

When comparing to the old eBay/PayPal system a tax rate of about 6.5% leads to a breakeven situation, if the tax rate if higher overall fees are slightly higher, if there is no tax or the tax is at a lower rate the MP fees are slightly lower.

The old combination of fees 10% + 2.9% were replaced with 10% + 2.35 (2.55 for US Sellers), that reduced overall fee is why there is a "break even" point based on the Sales Tax rate.

A lot of the posters on .com  are outraged because they now pay a fee "on money they don't see" and/or "money there is no profit on". Both of these are lame reasons, the important part is the total of fees paid not how the fees are calculated.

eBay could have said, no fees on taxes but instead of 12.35% they could charge 15% of the non-tax total.

Just like buyers who don't like paying for shipping, sellers don't like paying fees on taxes, they are so blinded by this objection that they might be willing to pay more just to avoid the concept of fees on taxes.