JAPANESE BUYER (lives in Japan) IS BEING CHARGED US STATE TAX . Is this legal?

[gwrocen]

We sold an item to a Japanese Buyer in Japan.

This buyer is using a 'freight forwarder' in the USA so the parcel will "flow through"

a US state that is having online taxes collected by eBay.

This Japanese buyer was charged a state tax of US$5.37 on his purchase from us.

We are in Canada.  We are not authorized to collect taxes for any state or province.

Anyone know why a Japanese buyer is required to pay a state tax when he is not located

in any state in the USA and the final destination for this parcel is Japan?

Below is the payment invoice we got from PayPal making it appear that we are collecting the state tax.   The Japanese buyer thinks we are collecting the tax.   This has forced us into what we believe is an illegal predicament because we are not authorized to collect taxes.  We are not registered and do not have a tax number to collect or remit any state or provincial taxes.

Anyone else experienced a similar situation?

  1946 COLEMAN 128C "PRINCESS" LAMP Gas Lantern Made > Canada Harder to find Model 
   Item# 153730372100                                                                                                 $48.88 USD Shipping and handling                                                                                                 $25.12 USD           Insurance - not offered ----

                                                                                                                       Tax                 $5.37 USD                                                                                                                        Total             $79.37 USD

                                                                                                                 Payment sent to gwrocen                                                                                    

tyler@ebay 

[richardcm]

This is no different than a Canadian buyer who has his shipments sent to the US border city and goes to pick it up in that state. Tax is charged on the destination state. The only way around it is not this ship to a US state which you cannot avoid with a freight forwarder used by the buyer.

[ypdc_dennis]

It is legal.

Whether taxed via one charge (since start of November) or taxed separately by eBay (before then). It is an internet destination address sales tax (in this case, to the freight forwarder).

As I understand it: Some states do allow sales through freight forwarders to be exempt, but buyer has to contact their forwarder for details and arrange with eBay for tax exemption.

tyler@ebay 

[teenytrinkets]

Correct. I pick up online purchases in WA State at a package pick up place. I've had the pleasure of paying WA state tax for over a year now. Still cheaper than paying to ship to my Canadian address!

I just sold something to someone who lives in Malaysia, but his packages are shipped to PA. I charged him tax! I thought it was sooo funny that Malaysian paid a Canadian US tax! Lol

[reallynicestamps]

someone who lives in Malaysia, but his packages are shipped to PA. I charged him tax!

Why?

Unless you are registered to collect (and more importantly remit) taxes to the state of Pennsylvania, which usually means you have a B&M presence in the state, you will not be able to forward the money you collected.

If you meant "eBay, as a marketplace facilitator, charged the Pennsylvania state tax to the buyer who used an address in PA for delivery" then all is well.

I still am annoyed that eBay has put sellers in the position of paying fees to Paypal on tax  that passes through our PP accounts although we neither collect nor remit it.

[richardcm]

How does eBay handle sales tax for all the items shipped to the GSP center in Kentucky? I understand that Kentucky has a 6% state sales tax. Does eBay have an exemption for the Kentucky state sales tax because the items are going out of country?

[pjcdn2005]

When the buyer gets their parcel forwarded to a company in the US, as far as eBay is concerned the item is going to a US state and stopping there as eBay does not know that parcel is leaving the US.  With the gsp, the end destination that eBay has is outside of the country, not Kentucky so AFAIK, there would be no tax due.  It would be like the package stopping at an international clearing center...it is just there temporarily.  

[tyler@ebay]

Hi @gwrocen - @richardcm's assessment is correct, in that a buyer with a stated shipping address in a state with a marketplace facilitator law would be charged sales tax for that state.

Thanks!

[zee-chan]

Would you be able to add on to reallynicestamp's comment above, about how we (the eBay seller) have to lose money on PayPal fees on a sale tax that we weren't actually collecting on our own? I'm okay with sales tax being collected by eBay from US buyers, but why do I have to pay the PayPal fees for it?! It's unreasonable to add that cost to my eBay listing as not all of my buyers are from USA so not all sales solicit the tax.

As for OP's question, I buy from Japan using their forwarders too and I have been paying Japan sales tax as well... I think it's 10% now, they just went up from 8% a couple months ago 😣

[tyler@ebay]

Hi @zee-chan - This change was made to streamline the buying experience and prevent confusion, disputes and contacts that were arising out of a buyer seeing a single price at checkout and having multiple transactions charge their funding source. 

I can't speak to PayPal fees, but I can say that you are not charged any eBay fees for the collection or remittance of sales tax. Thanks!

[reallynicestamps]

And the result is "confusion, disputes and contacts" on the part of sellers.

In passing, eBay sellers are mostly here for the long haul. Buyers come and go.
It's important that eBay make their shopping here "streamlined" but that should not be at the expense of the sellers, who are paying fees every month to sell here.

EBay's programmers should be able to see how much each seller is paying to PP in fees each month.  Perhaps that bright new intern could figure out how to repay the PP fees at billing time. I'm sure she's tired of fetching coffee and corn chips for the tenured guys.

[esclyons]

the streamline was implemented so that not a million buyers were upset, just thousands of sellers...  ebay cares more about the buyers than the sellers.. period..

[hlmacdon]

While we all understand why there is a PR spin being relayed, let's be transparent here. It was done to save Ebay money and offload costs to sellers with little regard for how it impacted them. Instead of ebay being billed the fees we get billed the fees and have to deal with extra mess on our financial records.

Since ebay is always about championing small business when it is a convenient lobbying talking point maybe the US executive team could actually walk the walk and credit back the fees repayed as reallynicestamps suggests. I mean after all ebay basically stole back TRS discounts and all the money being saved on the offshore call center hours should more than cover it given that buyers are magically no longer concerned about taxes. There's a few billion left over from the Stubhub sale over in the corner as well.

[lady.stark]

---

tyler@ebay wrote:

Hi @zee-chan - This change was made to streamline the buying experience and prevent confusion, disputes and contacts that were arising out of a buyer seeing a single price at checkout and having multiple transactions charge their funding source. 

---

If that really was the case, GSP taxes would have been "streamlined" too a long time ago since they caused a lot of confusions, disputes and contacts. They still do from time to time.

No, the main reason why eBay changed the way they collect taxes is for their own pocket line. They didn't want to pay PayPal fees on those taxes, and instead of making an agreement or some kind of arrangement with PayPal, they decided to offload the costs to sellers. Which is, in my opinion, totally wrong and borderline illegal.

And let's be real.... eBay is not doing this "on my behalf". I'm a casual seller selling her own goods, I do not have a nexus in any state, therefore, collecting taxes is NOT my responsibility. It is, however, eBay's responsibility since they have the "nexus".