eBay

avionsunantiques · ‎12-01-2019

As most will know, ebay is now required to collect sales tax in certain US states for items delivered to those states, regardless of where they are sent from. ie, if you live in NY, and buy from Canada, your Ebay invoice will include NY sales tax.

That's fair enough.

The part that annoys me is we sellers are now paying paypal fees on the US sales tax collected by ebay!!!!!

Look at your paypal account for any item purchased by an US buyer in a US state for which ebay must now collect sales tax.

The tax is deposited into your paypal account as part of the total payment (item, shipping and tax). The tax is then instantly sent to ebay (ie it never really hits your account, it just looks like it does - ie you never have control or access to these funds - they are phantom funds)

However before these phantom tax dollars disappear from your account, paypal takes its percentage!

Now that I think it illegal.

Imagine if Paypal had a policy of putting $1000 into your account with every item purchase, then instantly removing the $1000 (ie using your account as a momentary accounting location entry for the $1000), and they charged you 3-4% of the $1000 every time.

That would be the same as stealing $30-40 from your account every time someone made a purchase.

This is apparently what paypal is doing with the US tax payments.

These payments are collected by Ebay, and have nothing to do with Canadains. However ebay has passed the paypal fees to Canadians by having the tax funds entered as an in and out accounting entry in your paypal account.

femmefan1946 · ‎12-01-2019

There's a long discussion of this with a title in ALL CAPS.

While I don't think it is actually illegal, and no tax lawyers or accountants have weighed in yet , it is certainly annoying -- even when the amounts are in pennies.

On dotCOM a seller did point out something that has not been noted before, perhaps because most sellers who are posting to the Boards have never had merchant credit card accounts.

When a merchant collects sales taxes and the payment is made on the credit card, the card will charge the merchant the usual fee for the amount of tax, even though it will be passed on, usually in less than 30 days, sometimes in minutes.

Which might be construed as meaning this is considered legally acceptable.

Dang. Poot. Phooey.

The other part of the question for Canadians is that we are being used to collect a foreign tax.

This is more questionable to my mind.

Does NAFTA or the WTO have anything to say about this?

How about Revenue Canada or Foreign Affairs?

@pierrelebel Hey Pierre, it's been a while, but have you been following this controversy at all?

pierrelebel · ‎12-01-2019

Nothing illegal about it.

Paypal charges a fee on the value of the transaction (including shipping, taxes, etc...). It is right there in the user agreement all sellers have with PayPal.

The same would apply if a seller were billing directly through VISA or Mastercard with a merchant account.

At the end of the day, let's be serious. It is annoying but only a few dollars.

Time to move on.

ricarmic · ‎12-01-2019

Don't forget it is also the Australian tax now and I think someone mentioned Singapore too.

The sad news is that things are only going to get more complicated as more countries around the world try to deal with this stuff......

lotzofuniquegoodies · ‎12-01-2019

I'm not sure about everyone else's varied opinion on this situation? I can only speak for myself. My biggest concern was the lack of transparency from the get go when we found out this was going to be implemented and how. We were just advised there was nothing we would, as sellers, have to do. Now I see "Check with an accountant." Like I can afford an accountant. Saying it's pennies does not help when it's a fee that's difficult to recover.

I just remember how the past "Photo Nightmare" was admittedly poorly handled and how those sorts of situations would NEVER happen again with token free listings for everyone's time and trouble. It didn't affect me in any major way but the sellers it did affect in fixing listings, cost them many hours in time and grief. Deja vu all over again!!! Grief wise!!

-Lotz

ricarmic · ‎12-01-2019

As an aside regarding the photo nightmare, I had a large number of items affected.

I decided NOT to fix them because there was still the original (main) picture left, and see what happens.

On a regular basis I see "one picture" items selling, a couple sold this week, so they are still slowly selling off on their own. I am glad I didn't spend the week(s) of effort it would have taken me to fix them one at a time....

gwrocen · ‎12-01-2019

@pierrelebel wrote:
Nothing illegal about it.

Paypal charges a fee on the value of the transaction (including shipping, taxes, etc...). It is right there in the user agreement all sellers have with PayPal.

The same would apply if a seller were billing directly through VISA or Mastercard with a merchant account.

At the end of the day, let's be serious. It is annoying but only a few dollars.

Time to move on.

You avoided the issue with your reply. This whole issue can’t be dismissed so flippantly.

The issue is that I have to pay fees to PayPal for eBay's and some American State’s income.

(eBay will get a commission on the tax money it remits to each state.)

Tax money is showing up in my PayPal statement even though I have no authorization

or legal right to have that tax money come to me.

PayPal has given eBay access to MY PayPal account.

eBay is using MY PayPal account for laundering American tax money so as to avoid paying

PayPal fees which no doubt improves eBay’s bottom line.

I would imagine that the saving to eBay will be in the hundreds of thousands

if not millions of dollars over the course of a year.

You say that it is only a few dollars that we as sellers are shelling out.

I am an octogenarian. Those few dollars for me could be the difference

of whether I can put gas in my 10 year old car this week or whether

I will have to walk downtown along icy streets and risk falling and breaking a hip.

And if anyone thinks it is right that eBay (or maybe anyone else who wants to)

can just waltz in and use MY PayPal account with PayPal’s permission maybe I can use

SOMEONE ELSE’S PayPal account to launder my payments from eBay buyers.

I will arrange with PayPal to pass the buyer’s payment through someone else’s account

and I will just withdraw my full payment and someone else can handle the PayPal fees.

After all it won’t really hurt anyone because the money will just “flow through”

and it’s only a few dollars each time.

That’s precisely what eBay is doing.

And having someone else pay my PayPal fees would sure help me out!

mcrlmn · ‎12-02-2019

Likened to money laundering.

renata6 · ‎12-02-2019

The question boils down to who is "the seller" in our transactions.

If Ebay is "the seller", then they must collect and remit payment through their own accounts. They should not be using ours without our permission.

If we are "the seller", and Ebay is helping us by doing the remittances on our behalf, as they imply, then there are minimums, as follows:

" In most cases, if a remote seller has either:

a minimum number of separate sales to customers in the state; or
a minimum dollar amount of sales to customers in the state,

the law requires the seller to collect and pay sales tax. In addition, the seller must register with the state’s taxing authority.

Most individual sellers on Ebay would likely not pay any tax. So, of course, the states prefer that Ebay is "the seller", as it generates more income for them. We are simply the pawns in this game, paying fees on money that Ebay owes.

femmefan1946 · ‎12-02-2019

We called in pierrelebel because, although retired, he is both an accountant and an eBay seller, who had given freely his invaluable advice over the years.

It would be more useful if, instead of fulminating about one's opinions and hurt feelings, that one consults a tax attorney or accountant, like pierrelebel, and get expert advice.

gwrocen · ‎12-02-2019

@femmefan1946 wrote:
We called in pierrelebel because, although retired, he is both an accountant and an eBay seller, who had given freely his invaluable advice over the years.

It would be more useful if, instead of fulminating about one's opinions and hurt feelings, that one consults a tax attorney or accountant, like pierrelebel, and get expert advice.

Pierre Lebel ignored the issue with his frivolous reply that we should just pay the "few dollars"

and move on. Maybe we can all have our buyer's payments "flow through" someone else's account and let them pay our PayPal fees for us while we get to keep our full payment.

That's what eBay is doing.

eBay is getting PayPal to let that tax money "flow through" my account. eBay takes out the full amount of the tax payment and leaves me to pay the PayPal fee on that tax amount that I should never be involved in.

Why is that right? You don't have to be a tax attorney or an accountant to know that that is not right. Let eBay get its own PayPal account.

ricarmic · ‎12-02-2019

I think perhaps we've forgotten the reason that eBay explained as to why they went this way.

As I understand it, the customers were confused why they were getting two transactions, one for the item and a second one for the taxes. (I would be confused if I bought something and got a bill for the item and a second bill for only the tax).

I also suspect it was bogging down their call centres as folks were questioning why there was a separate bill and likely why they were paying taxes.

Putting everything on the bill made it look like a "normal" transaction with the item cost and taxes and shipping all on the same bill.

The unfortunate consequence for us is that to do this the $$$ have to flow through our PAYPAL accounts (which to me is more of an accounting pain than it is a $$$ pain).

For me, because I sell my stuff (in the stamp world) as "taxes in" I'm already paying the PAYPAL fees on anything I sell to Canadians anyway. I suspect everyone is paying PAYPAL fees on any Canadian taxes charged.

I'm not sure how other sites having to do this have handled it, but I understand the reasoning here.

I agree that it is yet another small, but still present "nickle and diming" loss to us, but things are going to continue to change as the world begins to find ways to tax stuff, and as it happens, just as it works for taxes collected for our own country, we will be paying a little more because of it.... not happily of course but its a fact of life.

lotzofuniquegoodies · ‎12-02-2019

@ricarmic @avionsunantiques @gwrocen

The problem was and still is the explanation we got from eBay was that "Nothing would change". Truly not the case. Nowhere in the original announcement did it clearly state sellers would be on the hook for these additional fees. Ebay and Paypal were still talking when this change was being arranged. They knew exactly what was going on. See below the explanation I received from a Customer Service Supervisor the beginning of October. (Fri, Oct 4, 2:34 PM)

Hello XXXX,

This is XXXX, I was the supervisor you have talked to earlier. As promised, I'm sending you this email to summarize what we have talked about over the phone.

We've talked about the new sales tax update where sellers will be the one to receive the tax money together with the item cost plus shipping as part of the new update as shown on our Announcement boards: Oct 1, 2019

https://community.ebay.ca/t5/Announcements/US-Internet-Sales-Tax/ba-p/428022

As discussed, the new update will also take place on PayPal. We have confirmed that the full payment which consists the item cost, shipping cost and sales tax will be charged the PayPal processing fee.

We have already raised the concerns about the taxes being charged for PayPal fees and we're waiting for updates about it. Any updates will not be communicated to you directly but rather be announced soon if there are changes to happen.

If you have other questions, please let us know.

Sincerely,

XXXXX

eBay Customer Service- Supervisor

-Lotz

ricarmic · ‎12-02-2019

Yes I understand that this (as has many things) was poorly implemented.

In a past life, I did spend over 20 years in "systems" for a fairly large company and for pressure filled implementations like this (keep in mind the US Government forced this on eBay with a given "start date") it is very hard to make sure all the i's are dotted and t's crossed. I don't recall anything we had to do of this magnitude going 100% smoothly either......and some were very much worse.

I have to believe implementing this taxation stuff cost eBay a lot of $$$ already and likely a lot more as things continue to evolve, I'm sure nobody there is happy to have had to implement it either....

We also know if that if you call in to the CSRs 5 times you're going to get somewhere from 1 to 6 different answers to the same question.... I also had accountability for a CSR group in my past life, and it is very hard to keep everyone consistent with source information and solutions being applied.

I never said I was happy about the tax flow through, only that it is a fact of life and that I at least understood the rationale for why it was done this way.

esclyons · ‎12-02-2019

ebay was already collecting the tax money months ago.. But like i explained in the beginning, Ebay would sooner upset a few hundred sellers, then a few thousand buyers..

lady.stark · ‎12-02-2019

@pierrelebel wrote:
Paypal charges a fee on the value of the transaction (including shipping, taxes, etc...). It is right there in the user agreement all sellers have with PayPal.

The same would apply if a seller were billing directly through VISA or Mastercard with a merchant account.

The thing is, most sellers do not HAVE to collect those taxes. And we don't! It is really not the same as using a CC merchant account.

EBay is the party responsible to collect the taxes. Why is it my responsibility to pay for the fees *eBay* should be paying?

lady.stark · ‎12-02-2019

@ricarmic wrote:
As I understand it, the customers were confused why they were getting two transactions, one for the item and a second one for the taxes. (I would be confused if I bought something and got a bill for the item and a second bill for only the tax).

GSP is handled the same way. Taxes are charged seperately with a shipping cost. So... why is it still in 2 seperate transactions years after it was implemented? Simple: Pitney Bowes is paying PayPal fees on the GSP transactions. eBay is just GREEDY. Their "bogus reasoning" is just an excuse to offload the costs on the sellers.

renata6 · ‎12-02-2019

We have already raised the concerns about the taxes being charged for PayPal fees and we're waiting for updates about it. Any updates will not be communicated to you directly but rather be announced soon if there are changes to happen.

Duh, this supervisor seems confused. We are not concerned about taxes being charged for Paypal fees. We are concerned about Paypal fees on taxes....

gwrocen · ‎12-03-2019

@avionsunantiques wrote:
As most will know, ebay is now required to collect sales tax in certain US states for items delivered to those states, regardless of where they are sent from. ie, if you live in NY, and buy from Canada, your Ebay invoice will include NY sales tax.

That's fair enough.

The part that annoys me is we sellers are now paying paypal fees on the US sales tax collected by ebay!!!!!

Look at your paypal account for any item purchased by an US buyer in a US state for which ebay must now collect sales tax.

The tax is deposited into your paypal account as part of the total payment (item, shipping and tax). The tax is then instantly sent to ebay (ie it never really hits your account, it just looks like it does - ie you never have control or access to these funds - they are phantom funds)

However before these phantom tax dollars disappear from your account, paypal takes its percentage!

Now that I think it illegal.

Imagine if Paypal had a policy of putting $1000 into your account with every item purchase, then instantly removing the $1000 (ie using your account as a momentary accounting location entry for the $1000), and they charged you 3-4% of the $1000 every time.

That would be the same as stealing $30-40 from your account every time someone made a purchase.

This is apparently what paypal is doing with the US tax payments.

These payments are collected by Ebay, and have nothing to do with Canadains. However ebay has passed the paypal fees to Canadians by having the tax funds entered as an in and out accounting entry in your paypal account.