How another venue is handling Internet Sales Taxes.

[reallynicestamps]

I don't actually sell there anymore, but here's what Ruby Lane (better antiques, vintage, collectibles) sent its shopkeepers today.

Dear Shop Owner,

Early last month we informed you about new laws that are requiring Ruby Lane to collect and remit state sales tax on behalf of our sellers.

We now are fully integrated with our third-party tax compliance company Avalara and ready to begin collecting state Sales Tax on your behalf in those states where we have an obligation to do so.

Sales Tax and Service Fee starting Thursday, November 14th

Beginning on Thursday, November 14th, 2019 Ruby Lane is going to add the required by law state sales/use tax to all purchase orders based on the buyer's shipping address. A list of states where we are handling sales tax for you is maintained in our FAQ.

In addition, to help offset some of the cost of collecting, reporting, managing and remitting sales tax to 37 states we are currently required to collect sales tax for, buyers are going to be charged a 2.95% Service Fee, rounded up to the nearest 25 cents, at the time of purchase. We know the concept of charging buyers a service fee for marketplaces such as ours is relatively new, but this is a common practice in the auction world with Buyer Premiums, and in many other online spaces applying a service fee.

Collecting Sales Tax and Service Fees from You

For all orders, the Sales Tax and Service Fee is going to be remitted to you as a part of the buyer's payment, for any way you accept payment. Ruby Lane then deducts the same Sales Tax and Service Fee amounts, plus starting January 1, 2020 the new seller Service Fee (see below), from your Ruby Lane account when your order is finalized. Ruby Lane then uses that money to pay the state sales/use taxes on your behalf.

As purchase orders are finalized and sales tax & fees are deducted from your shop account for amounts already paid to you by your buyer, it may cause your shop account to go negative. Shop owners are strongly encouraged to fund their shops accordingly.

.....

There is a new seller Service Fee of 3.75% of the item totals + shipping/handling on all finalized orders, rounded up to the nearest 25 cents.

This has been cropped, but if anyone wants to see all of it, I haven't deleted the email.

Note that Ruby Lane buyers tend to be well-heeled and will pay for something they want without cavil.

Many are interior designers and can pass the costs on to their ultimate customer.

[hlmacdon]

LOL. That is all.

[recped · Accepted solution]

Etsy uses a similar system so effectively sellers pay the payment processing costs for the sales tax.

It should also be noted that sellers who collect the Sales Tax themselves have always paid payment processing fees on those funds, that includes Canadian sellers such as myself who have always added GST/HST to eBay sales.

[kawartha-ephemera]

What a word stew … I know nothing of Ruby Lane other than they exist. 

Are they saying that their buyers will be expected to pay the total of (item cost + shipping) + sales tax + and then on top of that 2.95% of the total transaction as a service fee?

Then what is this new 3.75% seller fee about, are they saying they require a new seller fee to fund the administration needed to collect these sales taxes?  This seems a new kind of crazy doesn't it? Or am I missing some obvious detail, must be, this cannot be right.

[luckylegend]

Some people love to be bent over backwards haha

Jokes aside I think they are taking advantage of the taxes because they can justify the new fee as “ tax processing fee” instead of “omg we are going broke we will just put a random % on your sales to get more$”

[sylviebee]

The way I read this is a little different from the way others are reading it, but these sorts of technical things are never my forte.

Buyers will be charged the sales tax plus a service fee (2.95%)  by RL and this will be remitted to the seller via RL along with the usual payment.

Sellers in turn will be billed for the taxes collected plus a 2.95% service fee via their monthly bill.

This means that there should be no added cost to the seller and this is a little different from what others are reading.

Am I reading that incorrectly?

Also, a the same time RL is adding a Final Value Fee of 3.75% and also raising listing fees but this has nothing to do with tax collection.

[sylviebee]

For RL sales I often just send PP invoices to buyers at their request as this often makes things easier for the buyer.  I wonder how PP is going to handle this new tax issue?

[lotzofuniquegoodies]

@luckylegend 

Fake News Headlines:

Government of Canada to start charging fee for applying tax on all Goods and Services on April 1, 2020. Stay tuned for updates.  

-Lotz

<Tongue in cheek>

[kawartha-ephemera]

---

@sylviebee wrote:

The way I read this is a little different from the way others are reading it, but these sorts of technical things are never my forte.

Buyers will be charged the sales tax plus a service fee (2.95%)  by RL and this will be remitted to the seller via RL along with the usual payment.

Sellers in turn will be billed for the taxes collected plus a 2.95% service fee via their monthly bill.

This means that there should be no added cost to the seller and this is a little different from what others are reading.

Am I reading that incorrectly?

Also, a the same time RL is adding a Final Value Fee of 3.75% and also raising listing fees but this has nothing to do with tax collection.

---

Thanks for the 3.75% FVF clarification ... welcome news I'm sure.  Out of curiousity I took a brief look at how they operate. It seems RL has not charged any FVF at all until now.

[sylviebee]

Yes, that's true.  until now RL has charged a store fee plus a fee/listing but no FVF.

In general, their store fee is higher than eBay's store fee and they've also just raised listing fees which is staggered by the number of items listed.

So, not only have they added a FVF, they've also raised listing fees and now will also be billing taxes and service fees.

My eBay sales are generated by eBay so they deserve a higher fee, but my RL sales are generated by me.

I've used RL much as I would use my own personal website.  Therefore, now the thought of paying a FVF when I bring in my own customers in is making me re-think listing on RL.

The hike in RL fees means the cost will be very close to eBay fees.

[reallynicestamps]

I tried RL for a while, but there were no sales for me (I was selling books, this is not a place to sell books-- at least not for readers.)

But I did do some buying and have been getting their emails for years as a result.

They have very nice stuff and no embarrassment about selling at a truly fair price. Fair to the seller, that is.  But if the seller says it is OOAK, it is.

[sylviebee]

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@reallynicestamps wrote:

I tried RL for a while, but there were no sales for me (I was selling books, this is not a place to sell books-- at least not for readers.)

But I did do some buying and have been getting their emails for years as a result.

They have very nice stuff and no embarrassment about selling at a truly fair price. Fair to the seller, that is.  But if the seller says it is OOAK, it is.

---

Yes, RL isn't right for all items.  I tend to reserve RL for my higher end pieces but recently there's been more variation.

I wonder how this FVF will affect RL?   One big draw about RL has been that it's not constantly policed the way eBay is.  There has always been complete freedom to interact with buyers and that has allowed sellers to be more effective sellers.

If they add FVFs to the mix that will change everything for that site.  The cost of policing these sites has to be astronomical but if they don't police the site they have no control.   I wish they'd just raise listing fees instead if they need more money.

[luckylegend]

Hi may i know what higher end pieces you list on RL? And if they sell better there?