IS IT LEGAL FOR eBay TO DIVERT TAX MONEY THROUGH MY PayPal ACCOUNT?

[gwrocen]

Does anyone know what the US and Canadian laws would be on this?  Can eBay legally deposit and withdraw the tax,  that eBay is required to collect,  through MY PayPal account?  I am really bothered by this.  We do not have a nexus in the US and are not registered to collect taxes from anyone.    I would like this to be spelled out very clearly.

Can anyone help on this?

Thanks.

[fashionoutletdeal]

I didn’t explain well myself . I apologize for it . What I meant is that is part of doing business. The same fees business pays in the BM stores . They need to keep a record from which transaction this tax coming in . After all they have right to do it . If the seller don’t like he could opt out international and USA shipping. It’s absolutely legal what PayPal do like every other processing payment company .

[gwrocen]

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@fashionoutletdeal wrote:
I didn’t explain well myself . I apologize for it . What I meant is that is part of doing business. The same fees business pays in the BM stores . They need to keep a record from which transaction this tax coming in . After all they have right to do it . If the seller don’t like he could opt out international and USA shipping. It’s absolutely legal what PayPal do like every other processing payment company .

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@fashionoutletdeal 

It has not been said that what PayPal is doing is illegal.

It has been said that what eBay is doing is not right. eBay is downloading the PayPal FEES on the backs of sellers (from every country in the world) who sell to an American buyer who lives in a state that requires internet taxes to be collected.

I do not have a nexus in the USA.  I am not required to collect taxes.  I do not have a right to appear to collect taxes from anyone.

And yet the payment for those taxes is put on my invoice to my buyer and is included in the payment from my buyer to me and is in my PayPal account before eBay takes it out. 

And I have to pay the PayPal fees on someone else's income.

eBay or the American State who want those taxes should do their own collecting on their own accounts and pay their own fees.  It is THEIR income, not mine..

The US law is that it is illegal to even appear to collect state taxes if you do not have a registration number to do so.  

[pjcdn2005]

 The US law is that it is illegal to even appear to collect state taxes if you do not have a registration number to do so.

Your are splitting hairs. That money is going to be collected on YOUR sale regardless of whether it appears to be collected through ebay or by you. There is an obvious paper trail that ebay is taking them out of your account and remitting them to the buyer's state. Like you, I would rather have ebay paying the fees on the tax but I honestly don't see this changing no matter how many times you ask them to justify it.  

I would also prefer that ebay pay the fees on these taxes but I have seen on the US boards how upset and confused buyers were when they would see two payments for one transaction so I can understand why ebay changed the way they do it. The fees they are saving probably do have something to do with their decision to change it too...I'm not denying that.

I realize that the gsp requires two payments to be made but that is a much smaller percentage of transactions than those done by US buyers and seems to cause less confusion.   

[ypdc_dennis]

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@gwrocen wrote:

No one is saying that eBay shouldn't collect those taxes.  They can collect all they want. What eBay is doing is downloading the PayPal fees on the backs of sellers.

eBay is forcing sellers to pay the PayPal fees on the taxes that are collected BY eBay FOR US States.  Those taxes are not the seller's income. 

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It is not a tax on eBay's income either. It is a sales tax on a Buyer's purchase from a Seller (not a purchase from eBay). The sales tax charged would not exist unless the Seller made the sale through eBay in the first place.

One way or another all of eBay's expenses are paid by Sellers.

Would you be happier if ebay increased the FVF percentage to cover the cost of processing US state sales tax?

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EBay Inc. (EBAY) on January 28 reported 2019 fourth-quarter earnings of $556 million on revenue of $2.82 billion.  Definitely a for-profit company.

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[lotzofuniquegoodies]

If you are a seller in Canada and collecting GST/PST/HST are you paying fees on those taxes...Either FVF or to PayPal? Or is that another Pandora's Box?

-Lotz

[ypdc_dennis]

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@lotzofuniquegoodies wrote:

If you are a seller in Canada and collecting GST/PST/HST are you paying fees on those taxes...Either FVF or to PayPal?

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eBay FVF is not charged on Canadian sales taxes.

PayPal does collect their processing fee on Canadian sales taxes.

[fashionoutletdeal]

eBay is complying with the law in the state that the goods are sold . Doesn’t matter are you you registered or not . By the law eBay must collect the taxes and remit to the gouvernement . This action isn’t illegal. If you search on other platforms you will see the same thing . It’s a new world wide more country implement this new internet tax , because it’s a good revenue for the government. I know that this make our goods more expensive and we will have extra cost , but that’s the business. Check the law suit Waifair if you had been following this few years back today you will not have this questions. I know that the company is USA based but is a very good example how the government want their pice of the cake . We internet sellers have only two options pay the price and keep working or you stop your international sales .

[fashionoutletdeal]

And yes you PayPal all the fees for the transaction including shipping and applicable taxes . All the processing payment company will do . And don’t worry when eBay transfer the money to the government they are charged as well .

[fashionoutletdeal]

This is exactly what other payment proceesing company is doing .So i dont understand why you argue .We pay our portions of fees and they pay theirs .Part of the business like it or not 

[fashionoutletdeal]

its not illigal for US to oblige platforms to collect taxes .There is a new internet tax and most of the states already applying it 

[lady.stark]

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@fashionoutletdeal wrote:

This is exactly what other payment proceesing company is doing .So i dont understand why you argue .We pay our portions of fees and they pay theirs .Part of the business like it or not 

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I think you misunderstand the process. EBay does NOT pay a dime on those taxes! They transfer the fees to us. They don't pay anything because of this stupid move.

[lady.stark]

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@pjcdn2005 wrote:

I realize that the gsp requires two payments to be made but that is a much smaller percentage of transactions than those done by US buyers and seems to cause less confusion.   

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Sorry, but I'll have to disagree with this last statement. There were thousands of posts back when the GSP was introduced. And there is still some new posts from time to time from buyers not understanding why they have to pay 2 invoices.

[gwrocen]

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@ypdc_dennis wrote:

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One way or another all of eBay's expenses are paid by Sellers.

Would you be happier if ebay increased the FVF percentage to cover the cost of processing US state sales tax?

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eBay will receive a commission (percentage of the tax money collected) from every state for

collecting and remitting that state's taxes.  I think that should cover their cost for processing the sales taxes and leave them with a profit.  There is no need for them to penalize sellers even more by adding more fees for that purpose. 

[recped]

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@lady.stark wrote:

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@pjcdn2005 wrote:

I realize that the gsp requires two payments to be made but that is a much smaller percentage of transactions than those done by US buyers and seems to cause less confusion.   

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Sorry, but I'll have to disagree with this last statement. There were thousands of posts back when the GSP was introduced. And there is still some new posts from time to time from buyers not understanding why they have to pay 2 invoices.

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When you buy something from the US via GSP the buyer only sees one total and makes only one payment.

The "confusion" amongst buyers is that they don't see that total until they get to checkout because the amount shown for "import charges" on the listing is only an estimate, an estimate that can and does change when buyers get to checkout. It happens for the same reason as US Sales Tax, the correct charge cannot be determined until the buyer goes to checkout and confirms their actual shipping address.

[femmefan1946]

eBay will receive a commission (percentage of the tax money collected) from every state for

collecting and remitting that state's taxes.

Can you show provenance for that statement?

I know that was true in Ontario in the 1990's, when I was actively working in our shop, but I understand from sellers who are currently registered to remit sales taxes that this is no longer true.

However, if it is true, leaving sellers to pay the PP fee is even more annoying.

[lady.stark]

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@recped wrote:

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@lady.stark wrote:

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@pjcdn2005 wrote:

I realize that the gsp requires two payments to be made but that is a much smaller percentage of transactions than those done by US buyers and seems to cause less confusion.   

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Sorry, but I'll have to disagree with this last statement. There were thousands of posts back when the GSP was introduced. And there is still some new posts from time to time from buyers not understanding why they have to pay 2 invoices.

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When you buy something from the US via GSP the buyer only sees one total and makes only one payment.

Well, yes and no. You see a total, yes, but on your credit card AND in PayPal, they are 2 seperate charges. Just like the US taxes were in the beginning. The buyer only saw ONE invoice at checkout, but they had 2 charges in PayPal.

[marnotom!]

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@gwrocen wrote:

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eBay will receive a commission (percentage of the tax money collected) from every state for collecting and remitting that state's taxes.  I think that should cover their cost for processing the sales taxes and leave them with a profit.  There is no need for them to penalize sellers even more by adding more fees for that purpose. 

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I'm also waiting for further information--preferably a link to a reputable online news source--to back up these claims.  

As noted earlier, sellers using Managed Payments instead of PayPal don't appear to get dinged for the amount eBay remits in sales taxes.  Either eBay has a much better deal with Adyen than it does with PayPal and can afford to absorb the various fees associated with collecting and remitting sales taxes, or else there is something going on behind the scenes that prevents eBay from doing this with PayPal payments.

To me, it is what it is until Managed Payments is rolled out, and won't that be fun?

[pjcdn2005]

This is just a guess but I think that when a buyer pays for an item and the seller is in MP the whole amount  is held at first (in ebays name) and then the amount owed to the seller goes to their bank account.  The seller never has that tax money in their account hence, no fees. 

[marnotom!]

Makes sense to me!

[marnotom!]

Just to clarify your last point, @pjcdn2005, PayPal doesn’t charge the seller fees on sales tax because the seller “has” the money. PayPal charges the seller fees on the sales tax amount because they base their charges on the transaction value.