USA Ebay Collected Tax - Is there a list of Tax Rates State by State that ebay charges USA Buyers?

[grandmas-great-items]

Hi,

As the title asks...Is there a state by state list of the Ebay Collected USA taxes that I can refer to so I can better calculate my handling fee on an item by item basis since we are charged fees on the tax and then charged GST on the fees.

I sold an item to Texas and the rate seems to be 8.25% on total including shipping. Item to Kansas seems to be 9.5% on the total including shipping. Small differences don't mean much on lower priced items but if I add higher priced items in future it would be good to understand the high and low end of the tax rates ebay will charge the buyer in USA depending on the state the buyer is from and I can calculate the fees they will charge on that.

Thanks in advance to all of you who are always eager to jump in and help everyone here 😁

[femmefan1946 · Accepted solution]

This is not an eBay tax.

The "internet" sales tax is just the usual sales taxes charged by each state to customers resident in that state.

Here is the list.

https://www.salestaxinstitute.com/resources/rates

You don't pay the sales tax, however, because eBay uses your invoice to simplify payment for the buyer, the payment the customer pays is run through your Managed Payments* account.

You are charged eBay fees on the entire payment your customer makes.

On a $1000 sale to Texas, you would be charged ~ 12% of the $82.50 payment or $9.90 .

Your Kansas customer would pay $95.00 in tax and your would pay $11.40.

Is the $1000 sale profitable enough to allow for a $1.50 difference?

What if the customer is actually in Mexico , using a TX od KS recieving address, and you are charged the international fee and/or 4.4% rather than the 3.9% we pay for US credit card payments?

*And was by Paypal too.

[pjcdn2005]

What if the customer is actually in Mexico , using a TX od KS recieving address, and you are charged the international fee and/or 4.4% rather than the 3.9% we pay for US credit card payments?

Managed Payments charge Canadians an international fee of  .4%  for US buyers and 1% for other countries. The rate is based on the buyers registered address so if a Mexican buyer has an item shipped to Texas they would pay the internet use tax in that area. The seller would be charged fvf plus 1% an international fee on the total amount received from the buyer.

[pjcdn2005]

Keep in mind that buyers pay the internet sales/use tax for the state plus any tax that their area charges. Also, some states charge tax on the shipping amount if it is separate, some don't.  It can confusing.

[grandmas-great-items]

Thanks @femmefan1946 

That is exactly what I was looking for.

So looking at the list, it can be different even in the same State depending where they live. Just looking at the Kansas one it is 6.5% State plus 0-5.1% Local so my buyer lived somewhere where it was an extra 3% on top of the 6.5% state tax to give the  9.5% tax ebay collected on behalf of the State/Local tax authorities.

So basically it can be 0% for some states like Delaware and all the way up to 13% (4% +9%) in Alabama.

Just a correction...add another 5% GST that ebay charges on the fees they charge on those taxes. Plus ebay charges 12.35% fee plus an extra 0.4% fee on USA purchases. So on $95 tax charged to buyer I would incurr $12.11 ebay fee on those taxes plus pay $0.61 GST on the tax fees. Soon to be higher when fees increase again.

@pjcdn2005 Ok thanks. So some will charge tax on shipping and some don't. Well I know Texas and Kansas charge tax on shipping now lol. Yes more confusing, indeed. If we are forced to I guess it's better ebay does it automatically.

[femmefan1946]

EBay collects GST and remits it to Revenue Canada.

Just as the GST collected by the supermarket on your groceries (or cleaning products anyway) is sent on. The store doesn't keep it.

EBay is required to do this for the tax collectors. It could be argued that it saves eBay sellers money (because time is money) since the calculation and collection is done for them instead of having to be worked out on each and every sale.

I try to think of the fee charged on passed-through foreign taxes as a service fee for work I have avoided. It helps a little. Not much, but a little.

Since we started selling here in 1998, I have pretended my selling costs are 20% of my sales. It's somewhat lower in reality, but it is more comfortable to learn my costs are only 12% or 15% of payments received when I was thinking they were 20%. YMMV.

[masterpcs2011]

Just in case you don't know Canadian Sellers are also charged an "International Fee" for shipping addresses outside of Canada. As far as the Final Value Fee + HST Canadian Sellers are charged on Tax Collected by Ebay "on our behalf" lol To me this is nothing more than another fee cash grab from sellers. I certainly don't believe in these Fees & No longer ship outside of Canada

[grandmas-great-items]

@femmefan1946  I understand the tax ebay collects is sent to the respective State or Canada with respect to the GST.  It's just the extra fee on the tax and then the extra tax on the fee on tax that makes me lol. It would be like Canada charging GST on the provincial tax to some extent. Although if I'm not mistaken businesses keep a very small portion of provincial taxes as payment from the province for collection of said taxes. I'm not sure about the GST if there is a payment to businesses for collection.

@masterpcs2011 Yeah thanks, I do know that and I also don't ship internationally right now for that reason. The International tax list will be interesting to look at. I'm going to research that a bit more in the next few months as I slowly list a few things here and there. The high tracked packet prices if taxed would be crazy extra fees on tax and then that GST fee on the fee on tax. If I do go international I might just add a few countries to test the waters.

I agree with you on the fee on tax and the tax on the fee on tax is a BIG LOL Nickel and dime us here and there. Ebay gets some extra and Canada gets some extra just from the tax they charge buyers in USA. Fees are going up soon too. Few extra nickels and dimes for them lol

[femmefan1946]

1.) Fees on taxes.

We had a merchant credit card account since the late 70's until we closed our shop and retired in 2014.

It is Standard Practice for payment processors, like cards, Paypal, and Managed Payments, to charge their fees on the entire payment, bottom line, rather than parting it out.

The GST charges come from the governments, and are paid to them, not to eBay (or AZ or etsy or your corner store).

You are mistaken about the rebate on taxes collected. Ontario did do this at least until the 90s, but that payment for service (preparing the remittance) was dropped a couple of decades ago.

2.) You will likely find that overseas sales make up a very small proportion of your sales. The buyer is paying the actual shipping cost as usual - overseas shipping should be Calculated as often as possible, not Flat Rate.

There may be outliers in sellers and in categories, but generally, less than 5% of sales go overseas. The US market makes up 80% or more of sales for most Canadian sellers.

I believe that eBay's fee on overseas shipping is based on the domestic shipping rate, not the actual shipping cost. I am willing to be corrected on that.