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

[reallynicestamps]

Ruby Lane (mostly fairly high end or curated collectibles and antiques) has an even more annoying method of dealing with the Internet Sales Tax.

https://community.ebay.ca/t5/Seller-Central/How-another-venue-is-handling-Internet-Sales-Taxes/m-p/4...

Dear Shop Owner,

Early last month we informed you about new laws that are requiring Ruby Lane to collect and remit state sales tax on behalf of our sellers.

We now are fully integrated with our third-party tax compliance company Avalara and ready to begin collecting state Sales Tax on your behalf in those states where we have an obligation to do so.

Sales Tax and Service Fee starting Thursday, November 14th

Beginning on Thursday, November 14th, 2019 Ruby Lane is going to add the required by law state sales/use tax to all purchase orders based on the buyer's shipping address. A list of states where we are handling sales tax for you is maintained in our FAQ.

In addition, to help offset some of the cost of collecting, reporting, managing and remitting sales tax to 37 states we are currently required to collect sales tax for, buyers are going to be charged a 2.95% Service Fee, rounded up to the nearest 25 cents, at the time of purchase. We know the concept of charging buyers a service fee for marketplaces such as ours is relatively new, but this is a common practice in the auction world with Buyer Premiums, and in many other online spaces applying a service fee.

Collecting Sales Tax and Service Fees from You

For all orders, the Sales Tax and Service Fee is going to be remitted to you as a part of the buyer's payment, for any way you accept payment. Ruby Lane then deducts the same Sales Tax and Service Fee amounts, plus starting January 1, 2020 the new seller Service Fee (see below), from your Ruby Lane account when your order is finalized. Ruby Lane then uses that money to pay the state sales/use taxes on your behalf.

As purchase orders are finalized and sales tax & fees are deducted from your shop account for amounts already paid to you by your buyer, it may cause your shop account to go negative. Shop owners are strongly encouraged to fund their shops accordingly.

.....

There is a new seller Service Fee of 3.75% of the item totals + shipping/handling on all finalized orders, rounded up to the nearest 25 cents.

It has not been received well.

[silverpinups]

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

Hopefully PayPal has added a Sales Tax section to our November/19 Monthly Financial Statements and Monthly Sales Statements.  

[ricarmic]

It is in its own column in the downloads, it was in one of the other threads I started, see my second post here:

https://community.ebay.ca/t5/Seller-Central/The-US-quot-tax-flow-through-quot-has-started/m-p/429379...

[hlmacdon]

One thing to note on that is they use the same sales tax column that any other sales tax gets lumped in to, so if you are collecting Canadian sales tax just use the country filter set to the US and remove the marketplace taxes for when you are pulling that data for your own tax records. This is one of the biggest problems with how it is being processed, they are comingling ebay liable marketplace sales taxes that flow through us with any seller liable sales taxes.

[hlmacdon]

@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.

Late to replying to this but 100% this is what should happen in the future and be expanded to international marketplaces that do any volume of business to Canada (ie Aliexpress). I'm surprised it hasn't to date given how much retail lobbying there is. There is tremendous wastage on the CBP and Canada Post end dealing with this. Given the level of marketplace sales activity it is grossly irresponsible to not address the tax shortfalls they generate.  

[cranewares.wixsite]

I remembered what happened back in the day and agree that it wasn't fair. However, now that we have calculated shipping options as well as SHIPPO (or other service where you can directly purchase your shipping label) integration, there should be no need to continue to charge 10% on shipping for the sellers who use both features/services.

If they had remotely thought of this, their reasoning behind applying their fee on both item value and shipping cost would now be moot. However, I'm sure they have enough financial incentive to not think about this.

[ypdc_dennis]

ZOMBIE thread from 2019

At tishuhu:

Lots of Sellers have "free" shipping where the shipping cost is not broken out separately.  Your suggestion would penalize them, and it would also penalize any Seller who does not use Shippo.

[justcosmic]

What's worse - if you have a cancelled transaction and refund the buyer - guess what (at least in my case) I ended up having to refund the tax to the buyer! Yeah that's right - tax that I never recieved!

And I tried talking to ebay staff and they swear blind that it is nothing to do with them and they don't even know that ebay are collecting these taxes, because support staff are so poorly trained. They tell me to take it up with paypal. In mycase it's a large loss on a large sale.

And they really just make it their clients problem.

They should be locked up for this.

[pjcdn2005]

If you did the cancellation through eBay they are supposed to refund the tax portion.  If you did the refund through PayPal you refund the whole amount including tax and then eBay credits you the tax.  I obviously can’t see your account so don’t know if that’s how it was done but you might want to double check.

[sniper10000]

Don't forget we "the sellers" are getting hit with the fees imposed by paypal. I know it is illegal. How? well I live in Canada and we dont charge Americans taxes it is up to customs or purchasers state. We dont have control of tax money it is essentially funneled through our accounts and payed directly to Ebay. Paypal says they just charge the fees...they know the tax is not ours so they can get rid of back room deals and charge Ebay the fee. Sell 50 items for about 1000 to a tax state and see if you notice them taking your profits. Paypal also charges sellers more if purchaser pays in a different currency 2.9% goes to 3.4 % and flat fee. Ebay 10% and now extra fee on tax when Ebay said no cost to sellers at all. So 100 collected in tax check you paypal bet you are out a few dollars... O.k now do that 500 times a year and $2 is now $1000 so yeah that is criminal. Before it went into effect it stated NO CHARGE TO SELLERS...Guess they think most dont check. I sure do when my money for items, my money for shipping my money in fees oh me taxed GST on sales as Canadian but still charged Washington state taxes if ship to comc oh and send from COMC home and pay tax again. Ebay knows where I live...same address as in 1999 when I joined. Cant tax people on everything multiple times and pass fees to sellers while they laugh and get bonuses as they prob get 1%+ I know like 1.5% in Canada for collecting taxes for the Government. 100 million in tax collected they bank 1 million. So sellers say 2.5% fee on taxes so 100,000,000 x $0.025 =2,500,000 paid by sellers in paypal fees so Ebay can collect and not pay a fee for them. O.k if Paypal is not in it with Ebay why do we not get control of the tax if we pay a fee on it??? I didnt agree for paypal to charge me fees on money I dont see or have control of. They are crooked as ever. High fees they do 0 work or advertising for us. paypal and ebay is about 15% without fee for taxes a bit more to 20% send to auction house they advertise and do all the work

[reallynicestamps]

TL/DR

We are not collecting taxes, eBay- an American company- is collecting taxes paid by American buyers. EBay then sends the tax to the buyer's state.

This was decided by the US Supreme Court a couple of years ago.

EBay/Managed Payments and Paypal did decide that the simplest way to do this is to add those taxes to the buyer's invoice and then route the parts to the appropriate state.

Paypal, and now Managed Payments, are following a Standard Practice of payment processors.

I assume you have never held a merchant credit card account, or you would know that your merchant fees are paid on ALL the money that passes through the account, including price, shipping, service fees, and taxes.

So if in your B&M shop you sell a Thingummy for $100 with a set up charge of $20 and sales tax on Goods AND Services of 13%, your customer would put $135.60 on his credit card and  your merchant fee would be a percentage of the whole amount. If your merchant fees* were set at 2.9%, that would be $3.93.

The merchant fee is invisible to the buyer.

Which is why many occasional sellers who have never worked retail or learned bookkeeping are confused.

*Most credit cards do not charge a flat transaction fee of 30c like PP and MP.  There is however a monthly rental charge for the machine.