TAXES collected by ebay???

[luckylegend]

I sold my Celine wallet (120cad) to some buyer in the US and noticed that there are taxes that he paid to me that ebay took.
It’s the first time I saw an invoice with this. Two weeks ago I sold a designer item and in the invoice there were no such Tax line (100cad value)

**bleep**? Since when does ebay take this amount? I will be shipping normally through canada post I don’t understand how ebay can charge taxes ahead? Paypal just substracted the taxes out under “tax collected by ebay”
What if they have to pay customs if their package gets caught???
What is it?

Description Unit price Qty Amount
Authentic CELINE Macadam pattern Brown Beige Leather wallet Woman Authentic Used
Item# 293255648162 $120.00 CAD 1 $120.00 CAD

Shipping and handling $19.77 CAD
Insurance - not offered ----
Tax $9.30 CAD
Total $149.07 CAD
Payment $149.07 CAD

[dhslk]

From the California Government website:

"If you are a marketplace seller, beginning October 1, 2019, you will no longer be considered the retailer of your sales of tangible merchandise facilitated through a marketplace, as defined by statute, provided the marketplace facilitator is registered or required to be registered for a seller's permit or Certificate of Registration – Use Tax."

Which means, for TAX purposes, third party sellers are NOT considered as the seller---it is NOT possible to collect sales tax if you don't SELL anything. Ebay, on the other hand, IS the seller for tax purposes, and is the ONLY entity LEGALLY allowed to collect the tax on their marketplace. To run the tax money through our accounts is ILLEGAL!!!!

[marnotom!]

I don't think the money is removed by PayPal since eBay is purportedly collecting the tax.

Since PayPal bases its fees on what the buyer pays (the total transaction amount), that amount shows up on your end for accounting purposes.

In short, what we see is what the buyer sees.

[dhslk]

OMG. Talk to ANY accountant. IF the money shows up in your ledger (the TAX does show up in your Paypal ledger), THEN you have collected it!!!

[gwrocen]

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@dhslk wrote:

OMG. Talk to ANY accountant. IF the money shows up in your ledger (the TAX does show up in your Paypal ledger), THEN you have collected it!!!

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I agree with you 100%,  dhslk.  The way the tax is funneled through my PayPal account makes me liable.

Just because eBay wrote a new clause in the seller agreement does not mean it is right and proper.

Wonder if it would be worthwhile to send a message to the State Governor of every state

for whom I have had taxes funneled through my personal PayPal account and find out if that jurisdiction thinks this is legal?

I have checked and it is simple enough to send a message to a governor online.

You just have to type in the state and 'governor' (eg State Governor Nebraska)

and find the link to contact the Governor's Office.

[dhslk]

Here's the link for California https://www.cdtfa.ca.gov/email/

[luckylegend]

Yes it’s like when they make you sign something before you go on a car race that the company is not liable. It’s just made to discourage prople from suing, you can’t sign away your safety.

[dhslk]

It's MORE than that. Ebay is putting us in an ILLEGAL situation that could have huge individual ramifications for sellers. EVERYTHING that I have read (eg. the excerpt from the Californai Government site seems to point to ebay's new method of dealing with the tax to be the EXACT OPPOSITE of what the Marketplace Facilitator legislation says is supposed to now happen---that third party sellers on Marketplaces are now AT ARM'S LENGTH from any tax collection or remittance. ebay has just subverted that by funnelling the taxes through our Paypal accounts!

[femmefan1946]

@luckylegend Poshmark may make a profit (although AZ famously did not for the first 20 years of its existance) and eBay makes a profit.

Not all the sellers do.

[teenytrinkets]

This whole issue really needs MEDIA ATTENTION.

I'd like to see what the CRA has to say about this - or other governing bodies in Canada that have any input on the legalities of inappropriate merchant tax collection, and merchant fees being paid on said inappropriate taxes.

I'd have no problem with Ebay raising fees to accommodate the expense required to create their own new software to manage their tax collection. I'd also have no problem with PayPal raising fees to accommodate the expense required to create their own software to allow the buyer to see only one transaction (but then it is somehow split between seller and ebay in the details).  Us long-term sellers have seen many different iterations over the years with regards to fees.  Lots of stuff we don't like, but it's LEGAL.

BUT NOT THIS TIME.  I have a HUGE problem with Ebay collecting this tax THROUGH me, and a MONUMENTAL problem with PayPal CHARGING ME FEES on the taxes that I have nothing to do with.

I consider this whole situation absolutely ludicrous. I've never seen such bad design, bordering on ILLEGAL, in any computer system.  The last time I took issue with anything even close to this was when a "Family" store was charging provincial sales tax on children's clothing.

Just because Ebay and PayPal change their terms of service, doesn't mean it's actually legal - or moral for that matter.

It's time to blow this out of the water and see what some outside sources have to say!

[recped]

Let  me know when the US Supreme Court agrees to hear your case!

Here's one that will really bother you.......Canada should enact a similar Marketplace Facilitator rule so that eBay etc have to collect GST/HST for anything sold by a seller outside Canada that ships to Canada (This is what Australia did).

No more waste of money paying customs people to collect a few dollars on a $50 shipment.

No more $10 fees from Canada Post for collecting those few dollars.

No more lost revenue of shipments Canada Customs let slide because they are too busy.

No more unequal treatment for Canadian based retailers (on/off eBay) who have to collect  GST/HST on every sale even if it's only a $1 sale.

[ypdc_dennis]

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@recped wrote:
...Here's one that will really bother you.......Canada should enact a similar Marketplace Facilitator rule so that eBay etc have to collect GST/HST for anything sold by a seller outside Canada that ships to Canada (This is what Australia did).

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That is not what Australia did.

Their tax policy only applies to imports under their $1000 limit. Everything above that is collected by Australian customs.  Smuggling ebay packages across the Australian border is a minor issue compared to Canada. Ocean front borders make a big difference.

What the USA has now is a State sales tax rule that applies to all sales both domestic and foreign. So no worries about where the package is shipping from, just the destination.

At the current time we have eBay's Global Shipping Program which adds to Canadian tax coffers. And over on the A-river the stuff they ship to Canada from their own USA warehouses includes tax and duty collection for Canada (does not apply to 3rd party sellers who ship directly).

Big changes would be required to current procedures to make it work for Canada. Not going to happen with a minority government in Ottawa.

-..-

[dhslk]

There are now several other threads on this topic, including https://community.ebay.ca/t5/Seller-Central/FYI-that-Australian-taxes-now-flow-through-PAYPAL-too/m-...

[momcqueen]

"...since the tax portion is now flowing into each and every one of our PayPal accounts...""

Ebay has collected the appropriate sales tax on my sales and the monies have not flowed into my PayPal account. As the seller, I don't see sales tax collected anywhere other than on the ebay page that it was collected on behalf of the transaction.

I'm not seeing the nature of your issue here.

If sales tax must be collected (as per direction from the governments of Australia and certain American states) better that ebay collect it than that ebay require me as a seller to collect and disburse it: I'm not qualified to do that and neither would be 85 per cent of sellers here.

[ricarmic]

Hi Momc! 

My morning coffee has not had its effect yet so I may be misunderstanding your note, but the tax $$ do show up in our PAYPAL accounts, but only for a nanosecond, then off it goes again.

If you look at the amount in your paypal summary it includes the taxes, you have to open up the transaction to see the PAYPAL fee and tax removed.

So a $10 sale with 10% tax shows up as $11.00 on the paypal payment, and $11 comes into our account (which is what we see on the summary page) and when opening the item transaction, the lines for the $1 and the relevant PAYPAL fees deductions are visible.

This causes an accounting challenge depending on how one decides to account for this from an accounting perspective.

[mrdutch1001]

In a recent PayPal transaction to a USA buyer in a state where the states internet taxes are collected, the PayPal transaction statement shows a + tax amount and then under the PayPal fee line the next line reads"Tax collected by eBay" and shows the - tax amount.

[ricarmic]

Note that sometimes taxes will not be deducted if the buyer happens to be a reseller (ie I've had NY buyers that have not had tax deducted because they sellers and are buying my stuff to resell - similar concept to what used to happen here in the days before HST)

[marnotom!]

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@mrdutch1001 wrote:

In a recent PayPal transaction to a USA buyer in a state where the states internet taxes are collected, the PayPal transaction statement shows a + tax amount and then under the PayPal fee line the next line reads"Tax collected by eBay" and shows the - tax amount.

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Because sellers are charged fees based on the "transaction value" which appears to be defined in this case as the amount paid by the buyer, the entire amount has to be accounted for.  PayPal and eBay seem to be leaving it up to sellers as to how they want to account for the amount that eBay remits as tax.

I don't think any of us would prefer the alternative where there's no mention of the tax anywhere on the seller's end, yet the seller would still be charged fees based on the transaction value.

[mrdutch1001]

as a low volume, casual seller of low value items, the extra pennies PayPal will charge me for the transaction fee is not alarming for me ...as in recent years I have been experiencing less than $300 in sales per year from eBay, accounting for these extra pennies are not of concern to me....BUT the very idea PayPal is using PayPal accounts as a pass through system for the tax collection is concerning and there will be much more to be reckoned with for those sellers who are high volume and/or high value item sellers...

[marnotom!]

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@mrdutch1001 wrote:

BUT the very idea PayPal eBay is using PayPal accounts as a pass through system for the tax collection is concerning and there will be much more to be reckoned with for those sellers who are high volume and/or high value item sellers...

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Does anybody know how other payment processors are dealing with this issue for eBay sales?

[mrdutch1001]

I sell on other venues(small sites compared to eBay), but don't know if or how the sales tax is dealt with,  as yet there has been nothing specific to a sales tax indicated on the site order details or the PayPal transactions.