eBay

luckylegend · ‎11-08-2019

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

luckylegend · ‎11-12-2019

Ohh thats interesting what was the commission before that?

dhslk · ‎11-13-2019

Here are a few excerpts from a Canadian tax law website from July 2019 discussing the collection of US sales tax by Canadians (US Sale Tax Guide for Canadians):

"Economic nexus will be based strictly on the volume of sales and/or unit count you sell into the state. There is no ambiguity in the application of the law. From the states’ perspectives, once you cross that threshold, you are obligated to register and comply."

(...in other words, if you sell over a certain $ value or a certain units value in a specific US tax jurisdiction, then collecting sales tax for that jurisdiction is required. In my case, I sell miniscule amounts to any one jurisdiction and DO NOT have an economic nexus anywhere in the US; therefore, US sales taxes should NEVER be in my account---it is EBAY that has the nexus, not me, and ebay is the registered tax collector, not me).

"Am I in trouble if I start collecting sales taxes without a registration?

It is illegal to collect sales tax from customers if you haven’t obtained a sales tax permit/registration number from the state. Please make sure that you register first before you start collecting."

(In other words, EBAY may be causing me to engage in ILLEGAL activity; by putting the tax money into my possession for even a nanosecond, they are opening me, and ALL Canadian small sellers , up to HUGE legal problems for illegal tax collection). PLEASE someone out there who is a lawyer, take this on!!)

The method that ebay was using earlier in the year worked, and was legal. The sales tax was collected and remitted by ebay, as it should legally be.

I am going to alert my MP to this.

luckylegend · ‎11-13-2019

What can I do to bring it to the right people’s attention?

marnotom! · ‎11-13-2019

@dhslk

Is there anything in that website that makes mention of the role of the use of marketplace facilitators in collecting and remitting these taxes?

I found similar information to yours, but I also found information that hinted that if Canadian sellers are making use of a marketplace facilitator to conduct their business, the marketplace facilitator's obligation to collect and remit state sales tax trumps anything a Canadian seller may have as a "nexus".

ypdc_dennis · ‎11-13-2019

@briankelm wrote:
... the customer has to pay the taxes to the seller, then ebay and paypal take a percentage of that from the seller ...

eBay does not charge a fee on sales tax.

dhslk · ‎11-13-2019

I think the whole point is EBAY , and EBAY alone, are responsible for collecting the tax. According to what I have been able to find online, it is very clear. EBAY has the nexus, EBAY has the obligation to collect and remit the tax, NOT THE INDIVIDUAL SELLER who does not sell any sort of volume ($ or count) to any US sales tax jurisdiction and is not authorized to collect or receive the tax.

Can someone at ebay legal department please present a justification and explanation for this??

(I'm not a lawyer, but I did get 90% on LSATs and offered admission to McGill law school many, many years ago, so am not bad at reading legalese etc.)

And, as someone else mentioned, to allow Paypal to remove taxes from my account is also problematic. Imagine if they did that with Canadian taxes. There is a PROCESS in place for me to collect and remit Cdn taxes. ebay/Paypal couldn't just unilaterally rewrite the rules to suit themselves, which seems to be what they are doing.

cottagewoman · ‎11-13-2019

I totally agree with previous message. The onus is on eBay to collect, not us, which they were doing before November 1st. This opens all Canadian sellers with U.S. transactions up to all kinds of scrutiny, not to mention book keeping headaches since the tax portion is now flowing into each and every one of our PayPal accounts. Anybody know of a line to deduct on the tax form for 'taxes collected by a foreign state'? Don't think so- because it's not supposed to happen!

All state laws with marketplace facilitator clauses are very explicit in the fact that the facilitator must collect and remit - not remit only which is the current state of affairs.

I understand paying fees, and am grateful that eBay is doing this - because, guess what, they HAVE TO. If there were no marketplace facilitator rules and we all had to register, collect and remit on our own, do you think eBay would take this all on? Seriously doubt it.

pjcdn2005 · ‎11-13-2019

@dhslk wrote:

The method that ebay was using earlier in the year worked, and was legal. The sales tax was collected and remitted by ebay, as it should legally be.

I am going to alert my MP to this.

IF the way ebay is doing it now is illegal and I don’t agree that it is...then the way ebay was doing it before is just as illegal. The illegal part would be the fact that the taxes are collected at all, not where the money is processed.

Dont get me wrong, I don’t want to pay fees on it either but the ‘illegal’ argument is a stretch imo.

dhslk · ‎11-13-2019

The Weekly Chat thread seems to have disappeared, so I will repost here:

"

From Amazon help pages:

"

A Marketplace Facilitator is defined as a marketplace that contracts with third party sellers to promote their sale of physical property, digital goods, and services through the marketplace. As a result, Amazon is deemed to be a marketplace facilitator for third-party sales facilitated through www.amazon.com.

Marketplace Facilitator legislation is a set of laws that shifts the sales tax collection and remittance obligations from a third party seller to the marketplace facilitator. As the marketplace facilitator, Amazon will now be responsible to calculate, collect, remit, and refund state sales tax on sales sold by third party sellers for transactions destined to states where Marketplace Facilitator and/or Marketplace collection legislation is enacted. In certain states, local taxes are not included within Marketplace Facilitator Legislation; Amazon is not responsible for those taxes."

What EBAY is doing is ILLEGAL and, by corollary, is making us do ILLEGAL tax collection and remittance!!!

..it is the MARKETPLACE (ebay, Amazon, etc.) that is responsible for collection and remittance!!!!!!!!!! NOT the third party seller!!!!! "

dhslk · ‎11-13-2019

You are incorrect. The recent Marketplace Facilitator legislation in the US makes it MANDATORY for marketplaces to collect and remit the tax. However, it seems to be ILLEGAL for us third party sellers to do so, which is what ebay has just started doing. I assume it is legally IRRELEVANT how long we have possession of that tax money. The point is, we are NOT legally allowed to collect, remit it---ebay IS legally allowed and indeed MUST do so.

@pjcdn2005 wrote:
@dhslk wrote:

The method that ebay was using earlier in the year worked, and was legal. The sales tax was collected and remitted by ebay, as it should legally be.

I am going to alert my MP to this.
IF the way ebay is doing it now is illegal and I don’t agree that it is...then the way ebay was doing it before is just as illegal. The illegal part would be the fact that the taxes are collected at all, not where the money is processed.

Dont get me wrong, I don’t want to pay fees on it either but the ‘illegal’ argument is a stretch imo.

pjcdn2005 · ‎11-13-2019

@luckylegend wrote:
Ebay has a CALCULATOR that can calculate the exact cost based on weight. I don’t think you need a genius software engineer to figure out the average weight and dimensions of boots, winter fur coat or a silk dress to be able to find approximate cost. Obviously some sellers opt for setting a flat rate and all , but it may be an incentive for people to use normal post especially here in US or canada where post fraud is not as high as in the philipines for example.

On the other hand ebay could just lower their comission from 10% to offset what they make on the shipping but it won’t happen and we all know it. Sellers just have to get used to it when calculating their profit...

You are missing the point that snoopwiz was making. When sellers only paid commission on the item not the shipping, some sellers would avoid some of the eBay fees by lowering the item cost and raising the shipping cost. But I think another main reason that the shipping fee was started was because ebay wanted to promote free shipping....have the seller put the cost of the shipping in with the item cost. But sellers who did that would be paying a fee on shipping, sellers who charged separately for shipping would not. Charging for both the sale item and shipping evens the playing field.

As far as getting used to it...It’s been about 8 years...I think that we are already used to it.

dhslk · ‎11-13-2019

The fact that the Weekly Chat session thread disappeared in interesting, no?

(you can still access it via the pinned Weekly chat announcement).

pjcdn2005 · ‎11-13-2019

I'm not sure what you mean by disappearing. I see the link at the top of the sellers board and as always, it can be accessed in the weekly chat section.

marnotom! · ‎11-13-2019

I'm not convinced that sellers are actually collecting these taxes. That's just an idea I was spitballing when I was musing about why sellers are getting charged PayPal fees on state taxes.

As suggested earlier, on PayPal account statements, the taxes were originally accounted for separately from the amount for the rest of the eBay transaction
(sort of in the same manner as a GSP transaction) but this practice ceased. It could be because too many buyers didn't get it, as stated in that post, or it might be that this raised the hackles of credit card issuers who don't do things this way. It would be interesting to find out how eBay sellers who use internet payment gateways other than PayPal have the issue of sales taxes handled.

I don't think eBay is skimming off the tax from sellers from sales where state sales taxes have to be applied. I think PayPal splits the payment as soon as it's received from the buyer, based on the information received by eBay. The problem is that having originally received one payment instead of two, PayPal charges fees on the "transaction value" which is the whole ball of wax or what the buyer pays, and the IT that PayPal currently in place can't separate the tax from the other transaction charges unless eBay does it first.

And PayPal may have its hands tied here anyway if credit card companies or other payment gateways are refusing to play the game of "What makes an eBay sale different from a B&M sale or one from another e-tailer?"

I think this is a work still in progress as lawmakers, lawyers, accountants and payment processors continue to deal with the role of marketplace facilitators in the collection of state sales taxes. While eBay and PayPal are pretty old school from an internet perspective, they still have to break new ground when it comes to the overall picture of consumer retail.

dhslk · ‎11-13-2019

On the Weekly Chat session, Tyler from ebay referred me to ebay's Tax Policy page. I quote from that page:

"

Once eBay starts to collect tax in the above states, no action is required on your part, and there will be no charges or fees for eBay automatically calculating, collecting and remitting sales tax. The collection process will apply to all sales, whether the seller is located in or outside of the United States.Prior to the effective date, you should continue to collect and remit tax in these states if required. Additional states will be added to this list at a later date.

When a buyer purchases an item on eBay, and the ship to address is one of the above states, eBay will calculate and add the applicable sales tax at checkout. The buyer will pay both the cost of the item along with the sales tax. eBay will collect and remit the tax."

Their OWN policy states that there is to be NO COST to us (which there now is?--haven't check to see what is going on with Paypal fees on tax) and that EBAY and EBAY alone are responsible for collecting and remitting tax, not THIRD PART SELLERS, not PAYPAL !!!

dhslk · ‎11-13-2019

@marnotom! wrote:
I'm not convinced that sellers are actually collecting these taxes. That's just an idea I was spitballing when I was musing about why sellers are getting charged PayPal fees on state taxes.

Oh, yes we ARE 'collecting' the tax, against our will, as evidenced by its location in OUR Paypal account!!

tyler@ebay · ‎11-13-2019

@dhslk wrote:

On the Weekly Chat session, Tyler from ebay referred me to ebay's Tax Policy page. I quote from that page:

"

Once eBay starts to collect tax in the above states, no action is required on your part, and there will be no charges or fees for eBay automatically calculating, collecting and remitting sales tax. The collection process will apply to all sales, whether the seller is located in or outside of the United States.Prior to the effective date, you should continue to collect and remit tax in these states if required. Additional states will be added to this list at a later date.

When a buyer purchases an item on eBay, and the ship to address is one of the above states, eBay will calculate and add the applicable sales tax at checkout. The buyer will pay both the cost of the item along with the sales tax. eBay will collect and remit the tax."

Their OWN policy states that there is to be NO COST to us (which there now is?--haven't check to see what is going on with Paypal fees on tax) and that EBAY and EBAY alone are responsible for collecting and remitting tax, not THIRD PART SELLERS, not PAYPAL !!!

Hi @dhslk - to clarify, we do not charge you a fee for the collection and remittance of state sales tax where applicable. The gross amount is sent to you. Once that amount settles the state sales tax is sent back to us, and we collect and remit it to the applicable taxing authority.

PayPal, as the payment processor, charges their fees based on the gross transaction amount. But that is not a fee charged, collected or shared in by eBay.

Tyler,

dhslk · ‎11-13-2019

Oh, YES, it is. Ebay is trying to ILLEGALLY pass off this charge to Third Party sellers, AGAINST the LAW, by causing US to be the collector and remitter, even if just for a nanosecond.

tyler@ebay wrote:
@dhslk wrote:
On the Weekly Chat session, Tyler from ebay referred me to ebay's Tax Policy page. I quote from that page:
"
Once eBay starts to collect tax in the above states, no action is required on your part, and there will be no charges or fees for eBay automatically calculating, collecting and remitting sales tax. The collection process will apply to all sales, whether the seller is located in or outside of the United States.Prior to the effective date, you should continue to collect and remit tax in these states if required. Additional states will be added to this list at a later date.
When a buyer purchases an item on eBay, and the ship to address is one of the above states, eBay will calculate and add the applicable sales tax at checkout. The buyer will pay both the cost of the item along with the sales tax. eBay will collect and remit the tax."

Their OWN policy states that there is to be NO COST to us (which there now is?--haven't check to see what is going on with Paypal fees on tax) and that EBAY and EBAY alone are responsible for collecting and remitting tax, not THIRD PART SELLERS, not PAYPAL !!!
Hi @dhslk - to clarify, we do not charge you a fee for the collection and remittance of state sales tax where applicable. The gross amount is sent to you. Once that amount settles the state sales tax is sent back to us, and we collect and remit it to the applicable taxing authority.

PayPal, as the payment processor, charges their fees based on the gross transaction amount. But that is not a fee charged, collected or shared in by eBay.

marnotom! · ‎11-13-2019

Tyler appears to be referring strictly to eBay and its fee structure. I don't see PayPal mentioned anywhere. Yes, most eBayers are wedded to PayPal, but for all intents and purposes it's a separate entity.

I don't follow your second message. Why put "collecting" in quotes? eBay is collecting the tax, you never see it. PayPal, however, is charging fees on the total transaction value. It's unfortunate, it's unpleasant, but sadly, it's reality.

I don't think there's anything further that eBay or PayPal can do until credit card companies recognize or acknowledge the unique role marketplace facilitators play.

dhslk · ‎11-13-2019

Have you LOOKED at your Paypal account recently. YES, the tax does appear there, before it is removed by Paypal (as does Paypal fees).

I know this sounds a bit melodramatic, but this new practice of artificially funnelling the taxes through our Paypal account, when they have no LEGAL right to be there, is the sort of thing that MONEY LAUNDERERS do.