Question about sales taxes %

[macmanick666]

Hello Community.

I bought over 500+ on Ebay since 2004, but never took a shot at trying to sell items and I want to start. I've been reading the basics on how it works, just want to make the things clear prior to post my first item.
I tried to find my answer but it's still not clear to me.

I don't own a business, just a simple user from Quebec.

I understand that since July 1st, ebay is required to collect Canadian sales taxes (GST/HST/QST/PST) on applicable sales to Canada-based buyers.

So, as this being, why is this field for when you setup your item description?
Is it required? 

I assume ebay will apply taxes even if you don't enter anything in there...

Thanks a lot for your time in helping me.

[sparx_63 · Accepted solution]

Hello

That field was there prior to EBAY collecting the tax on July 1 2022.  EBAY will collect the taxes now whether you check the field or not.  Likely EBAY has not yet updated their program to remove this field.

Hope this helps

Sparx

[femmefan1946]

EBay takes care of calculation, billing, and remittance of the taxes for Canada, the US, the UK, the EU, and Australia. You don't need to do a thing..

You will see long threads about taxes here. The technical ones are for sellers who already have a large enough busines (over $30K annually) to be registered to collect taxes. They do not affect us little guys. 

You should be aware that eBay charges a fee for this service.

Your Final Value Fees are a percentage (usually 12.9%) of the selling price, the shipping price, and the taxes.

https://www.ebay.com/help/selling/fees-credits-invoices/selling-fees?id=4822

[macmanick666]

Thanks so much for the quick answer!
Really appreciated! 😊

[33nhl]

Ebay collects the tax portion pending what state or province buyer is in. 

I had some buyers complaing to me as they dont buy alot of times on Ebay and they thought i was collecting the tax , but ist Ebay that does it and some dont believe it.

It now adds $$ to sale price so many buyers will pass on high end items cause now that purchase of say $500.00 becomes $570.00 if the buyer has to pay 13% sale tax on a used item, will see if sales drop in the long wrong or buyers will be buying offline from ebay like kijii or facebook market where thare are no tax no fees if you sell something. 

[femmefan1946]

I disagree.
I believe that our customers are here either because they can't find it locally (including housebound shoppers) or because our price is lower.

Your $500 item, if it is available at all, would also have 13% sales tax if purchased locally or from any other online venue.

Kijiji is fine if it is there at all, but requires either pickup or planning for delivery, which even so might be an extra charge

There is a robust grey economy- legal sales for cash without tax- just as there always has been. The grey economy is no longer online.

[33nhl]

Im finding since the rule came into effect from July 1 2022 that many potential buyers that would have made purchases on Ebay are now slowly going to other means on making purchases of hockey cards or other sports cards such as kijiji or facebook groups or facebook market.  I believe with time there might have to be changes done by Ebay/governments that only brand new product would have to pay sales tax and not on used items, although it may be difficult to predict what is considered new and what is used.

With now the world economy taking a down turn many will resort to saving as much as they can on purchases by purchasing less or purchasing with out having to pay tax on used items.

Governments on the other hand will start to be cash strapped so they are going to look at all the means to grab cash from where ever they can thus it will just push buyers/sellers into more black market venues and cash sales no credit cards or etransfers or PayPal as in the USA going back 2 yeasr a bill had been introduced that USA banks/paypal and other online apps would have to submit deposits/withdrawls of day to day transactions of all account users to IRS  just as starting January 1st any USA member making any amount of sales of $600.00 or more in other words a person sells 10 items at $70.00 each or 1 item at $800.00 will get a tax form by Ebay or PayPal or other app for the 2023 tax year and will have to pay tax on gains thus already many have stopped selling on Ebay cause it now requires accounting skills or they have to pay a tax accountant to do the paper work come tax time in 2024 for tax year 2023.

[reallynicestamps]

I had to make a text document and put in white space and punctuation to understand that wall of text.

Governments on the other hand will start to be cash strapped so they are going to look at all the means to grab cash from where ever they can

Governments have never been afraid to run up debt. I find it amusing that Conservative politians faced with a budget “surplus” go first to cutting taxes, instead of reducing that debt as Paul Martin did in the 1990s.

thus it will just push buyers/sellers into more black market venues and cash sales

Technically, tax avoidance is “grey market”. The transctions are legal, selling a chair for cash is legal but without the sales tax makes it the grey market. Selling heroin without a prescription or pharmacist's license is black market.

no credit cards or etransfers or PayPal

But I agree that traceable transactions may be avoided by using cash instead.

as in the USA going back 2 yeasr a bill had been introduced that USA banks/paypal and other online apps would have to submit deposits/withdrawls of day to day transactions of all account users to IRS 

I hadn't heard of any US bill requiring daily reports to the IRS, which is currently understaffed by some 30,000 workers and looking to hire as many as 87,000 to cope with future needs.

just as starting January 1st any USA member making any amount of sales of $600.00 ... will get a tax form by Ebay or PayPal or other app for the 2023 tax year and will have to pay tax on gains

The $600 report by eBay to the IRS follows the former level of $20,000. A lot of anger about that, mostly from sellers who had not been declaring their online sales income.

It is the gross income, before deductions like procurement cost, fees, taxes, shipping costs. And yes, more bookkeeping will be required.

thus already many have stopped selling on Ebay cause it now requires accounting skills or they have to pay a tax accountant to do the paper work come tax time in 2024 for tax year 2023.
A lot of online sellers are about to learn that their “profitable side hustle” is actually a “money sucking hobby.”