PST now being charged on fees effective Jan 1, 2023

[ez2curgr8]

I just noticed effective Jan 1, 2023 I'm being charged an extra 7% on top of the legit 5% GST regarding fees. I suspect this is PST (depends on your province in Canada) of fees which is questionable because I believe PST is only on goods and services to tangible items (things you can touch).  

I haven't seen any bulletin and couldn't get an answer from ebay after being transferred but got an american who would know nothing about our taxes in Canada. The only thing I can think of is the ebay fees forms a cost of the item you sold where they correctly charge both gst & pst and remit to our provincial & federal govt. With this being a canada wide thing you would think there was an announcement or an email like there was when they started charging GST on fees.

Any thoughts?

[byto253]

Services is not just on tangible items though.  Some provinces may have some carve outs, not sure, as in Ontario it is integrated in to the HST.  If you have only had GST to this point, they are just catching up.  We have been paying the full HST on eBay fees since last summer, and buyers in Canada have had the tax applied to what they buy.  

[msau4301]

As byto has said I also have been paying the full 13% HST for quite a while now (both GST and Provincial sales tax combined). If they just started charging you now consider yourself lucky!

[recped]

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@byto253 wrote:

Services is not just on tangible items though.  Some provinces may have some carve outs, not sure, as in Ontario it is integrated in to the HST.  If you have only had GST to this point, they are just catching up.  We have been paying the full HST on eBay fees since last summer, and buyers in Canada have had the tax applied to what they buy.  

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GST or HST has been applied to eBay fees a lot longer than "last Summer", July 1st 2017 was the date.

The OP is "faking" their location (Canada, Canada) but I'll guess that they are in BC. When eBay was forced to start collecting GST/HST from buyers this past July 1st they also were forced to charge PST on fees to sellers located in the few Provinces without an HST system.

One thing I'm not clear on is the ability to get a refund of PST similar to the GST/HST refund that are available to any seller who registers for GST.

In the past low volume sellers (below $30,000) didn't have much incentive to register because it meant they would have to charge GST/HST to buyers. That advantage is now reversed at least for sellers who are exclusively or mostly doing business on eBay or other Marketplaces that collect GST/HST from buyers.

[marnotom!]

You don't say the province in which you're located, @ez2curgr8, but I'm going to guess British Columbia, as Manitoba also has a 7% sales tax, but it's referred to as RST (Retail Sales Tax) rather than PST.

This isn't a Canada-wide thing as sellers in most provinces have been paying HST on their fees for some years now.  I'm guessing that this additional taxation of seller fees in non-HST provinces (where applicable) should have been introduced or at least announced at the same time as eBay collecting and remitting GST/HST/PST on all eBay sales, but at that time the eBay Canada Community was in a mild state of turmoil with a rotating cast of moderators and probably "behind the scenes" employees who would have been responsible for getting an announcement out.  If it only affected one province, the news may have been overlooked or its significance underestimated on eBay's end.

I think you'd be better off trying to get the information you need on this from your province's Finance Ministry or Auditor General.  In the meantime, if it's any use to you, here's a document from British Columbia that explains (somewhat) on page five that Marketplace Facilitators that provide "online marketplace services" to sellers are now required to collect and remit PST from sellers in certain circumstances:

https://www2.gov.bc.ca/assets/gov/taxes/sales-taxes/publications/pst-142-marketplace-facilitators.pd...

@reallynicestamps / @femmefan1946, have you seen PST applied to your selling fees?  I'm not selling at the moment so I can't check this for myself.

[reallynicestamps]

It will vary from province to province.

Here's the word from BC

https://www2.gov.bc.ca/gov/content/taxes/sales-taxes/pst

The PST portion of our sales taxes is now being applied by marketplace facilitators (that's eBay).

The PST is charged on services.

[byto253]

Good point, I should have been clearer that buyers were being charged HST as of last summer.

[dinomitesales]

I'm in Manitoba. I've only ever been charged 5% GST on fees. Including on three listings I've sold since the new year began (one, literally minutes ago). Can you show a screenshot of what you're seeing?

eBay collects PST from my buyers in applicable provinces, but I've never seen it charged on fees.

[lotzofuniquegoodies]

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@dinomitesales wrote:

I'm in Manitoba. I've only ever been charged 5% GST on fees. Including on three listings I've sold since the new year began (one, literally minutes ago). Can you show a screenshot of what you're seeing?

eBay collects PST from my buyers in applicable provinces, but I've never seen it charged on fees.

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@dinomitesales 

Same here in AB...GST only...fortunately. I wonder if anyone is suggesting that eBay should be audited for charging fees correctly and accurately for all the Provinces/Territories? States for that matter?  Hmmm. Deep thought for 2023!

-Lotz

[femmefan1946]

Does Manitoba charge provincial sales tax on "services" or only on "goods"?

BC charges on both, but apparently only since last summer.

For small sellers this would be a percentage of a percentage, and might pass unnoticed, since for many eBay is a hobby and a tiny income and not a living.

[marnotom!]

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@femmefan1946 wrote:

Does Manitoba charge provincial sales tax on "services" or only on "goods"?

BC charges on both, but apparently only since last summer.

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We've been charged PST on telecommunications services for a donkey's age in British Columbia.  This bulletin was originally issued in 2013, but I think PST on phone services goes back even before then:

https://www2.gov.bc.ca/assets/gov/taxes/sales-taxes/publications/pst-107-telecommunication-services....

[reallynicestamps]

The one I linked  above has an update as of Oct /22 about market facilitators.

https://www2.gov.bc.ca/gov/content/taxes/sales-taxes/pst

[ez2curgr8]

I read the link attached so im going to call PST and confirm what ebay is doing is correct. If not I will ask them to be audited. Maybe they are trying to catch up but I don't read in the link that it is subject to pst when item is sold to someone in US from BC

[flipistics]

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@ez2curgr8 wrote:
I read the link attached so im going to call PST and confirm what ebay is doing is correct. If not I will ask them to be audited. Maybe they are trying to catch up but I don't read in the link that it is subject to pst when item is sold to someone in US from BC

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Certainly call them, but for ebay collecting tax on the fees it shouldn't matter where the buyer is. The buyer has nothing to do with it. The fees are on you as a seller for using ebay's platform and is between you and ebay Canada, for a transaction (not the sale, the charge for using the platform) occurring in Canada, meaning all applicable Canadian taxes are charged.

[reallynicestamps]

Our buyers pay sales taxes in their own jurisdiction.

Those taxes are run through our invoices because it is easier for the customer (and for eBay).

We pay our eBay/Manage Payment fees on the payment processing SERVICE based on the amount of the whole payment, not broken down.

So if you sell a $100 item which attracts $5 (5%) sales tax in Alberta or Delaware, eBay charges its(service)  fees on $105.

Which is about $13.54.

Then the Canadian taxes kick in on the eBay fee, so an Albertan would pay 67c and a British Columbian would pay  $1.76.

The eBay service fee is deductible on our income tax.

Do I have that right? 

I know Delaware doesn't have any sales tax. That is a fantasy for purposes of elucidation.