eBay is deducting seller fees on US tax from Canadian seller???

[freedom66]

Worthless to coment! Here is the  dip in my pocket and I live and sell from Canada!

"

Fees based on

C $318.75

• Item price
  C $300.00
• Sales tax
  C $18.75
• Fees based on

  C $318.75

Final Value Fee

-C $35.43

Variable percentage • Pottery & Glass category

Rate for C $0.00 - C $7,500.00

12.35%

Special promotion

C $3.94

International Fee

0.4%

-C $1.28

Charged because the delivery address is in United States. Final amount: C $318.75

Item fee total

-C $36.71

Final Value Fee

-C $0.30

-C $0.30

Per order fixed amount

Total fees

-C $37.01

GST/HST/QST (13%)

-C $4.80

Total fees (includes GST/HST/QST)

-C $41.81"

Thank you!

[femmefan1946]

You don't pay the sales tax. Your buyer pays it to his state government.

EBay is required to collect and remit those taxes.

For simplicity, it is noted on the invoice your customer is sent by eBay.

You do pay a fee to Paypal/Managed Payments on the full amount of that invoice, including shipping and taxes for processing the payment.

Evidently you have never had a merchant credit account. When the cashier at The Bay, or Tim Horton's, or WalMart accepts your payment, that payment includes GST/HST/PST.

And the store pays the credit card company a fee for processing that payment.

Not just on the price of the item but also on the sales taxes.

This is Standard Practice. The fee is for the processing not for the item.

We got our first merchant credit account circa 1978, and paid fees, including fees on taxes, until we retired and closed our shop in 2014.

You also pay  GST/HST/PST that eBay charges you for their services . That tax is on the eBay fee (FVF) and not on the item.

And part of your shipping cost is GST on the shipping service you use, but shipping is paid by the buyer, not you. You get money from the buyer to purchase shipping.

Since you are new, do you have a Solutions for Small Business account with Canada Post? This gives you small discounts (and a few other minor but useful perks) on some CP services.

https://www.canadapost-postescanada.ca/cpc/en/business/small-business.page?

[freedom66]

You missed the issue! Ebay collects the US taxes , but add that amount to my the price of the sold item and then deduct the FINAL VALUE  FEE from the total,  from my pocket!

Look at the  post, sold  item for C$ 300, eBay adds C$ 18.75 Massachusetts tax, and deduct the Final Value Fee from C$318.75.

This nothing have to do with GST/HST or shipping.

[femmefan1946]

No. I understand that eBay includes in OUR invoices to the customer the sales tax that the customer pays along with the selling price (which we get), and the shipping price (which goes to Canada Post or another shipper).

The the payment processor (until recently Paypal, now Managed Payments) charges their fee for processing the entire payment.

So if your the customer paid $318.75 (selling price + shipping+sales tax) the fee would be about 13% (depending on category, your seller status, etc) or ~$41.43.

I see that it was actually $41.81.

And separately, eBay collects GST (and provincial taxes ) on their fee of $41.81. That money goes to Canada and your province.

And yes. That is Standard Practice in the banking/credit/payment processing industry. Which is why I mentioned that our business was paying on that basis when the interwebs were barely a twinkle in Tim Berners-Lee's eye.

You may have not noticed it when Paypal was processing because their bills were monthly and also less transparent.

[freedom66]

It's C$ 18.75 Massachusetts tax, not the GST/HST!

I'll check with Revenue Canada regarding this.

Thanks for the post!

[marnotom!]

How would Revenue Canada be able to offer you advice on sales taxes charged in another country?

Have a look here, instead:

https://www.ebay.ca/help/selling/fees-credits-invoices/taxes-import-charges?id=4121

[pjcdn2005]

Revenue Canada has nothing to do with it as you are paying a fee, not a tax.   You are paying a fee on the total amount that the buyer paid just like you did with PayPal.   The difference here is that instead of paying 3.7% to PP on the tax that the buyer paid, you are paying 12.75% to eBay.  I doubt that anyone likes paying it but it's clear in the fee information given by eBay  that we pay fees on the total amount paid.

[mrdutch1001]

BTW, this has nothing to do with Revenue Canada...This is a USA state internet sales tax that eBay is required by law to collect and eBay is passing along a fee to the sellers for the task of collecting these taxes.

This is the way eBay has set up their collecting process for these sales taxes that they are required to collect & remit to the state taxation departments that require it. NO, I don't believe many of us appreciate having to pay fees on these sales taxes that really have nothing to do with our selling business, but it is what it is.

As sellers we adapt,adjust, deal with it and carry on OR stop selling online...

[byto253 · Accepted solution]

It is a back door fee increase -   No more and no less.  Just the way it is.  You look at the total fees paid and decide if the value is there for you in selling on Ebay or not.   

[freedom66]

Missing the point. The added tax to the sale price  in this case, is  Massachusetts tax, not the GST/HST !

[freedom66]

You miss the point. The added tax is the US tax, not GST/HST!

[freedom66]

You are tho only person which understood the problem. Thank you for advice, but I  make a part of living with sales on eBay and can not quit.

This is added fee incrise for sellers, but thankfully not all the US states have this...

[marnotom!]

---

@freedom66 wrote:

Missing the point. The added tax to the sale price  in this case, is  Massachusetts tax, not the GST/HST !

---

Actually, I'm in full agreement with you.  Perhaps you responded to the wrong post?

[pjcdn2005]

Yes I know that you were referring to US tax and that was what I was referring to in my reply.

There was no mention of Canadian tax.

I guess you missed my point.

[sniper10000]

we pay tax then fee on U.S TAX then Canadian tax on fee for tax.... Businesses CANNOT make own % to collect taxes or every store would.

[reallynicestamps]

If you are wrong and someone agrees with you, both of you are wrong.

We don't pay any US taxes. Not even on items we sell in US dollars on the dotCOM site.

Our US customers pay US taxes.  ---- Our Canadian customers don't pay US taxes. --- And Canadians buying from the USA  pay Canadian taxes on import.

We pay a fee to eBay /Managed Payments for the entire amount the customer pays.

And again, every merchant in Canada, from The Bay to Kim's Convenience, pays a fee to their credit card provider on the entire amount they recieve from their customers.

Taxes go to governments.

These fees go to our payment processor, Paypal or Managed Payments or Moneris.

EBay collects GST , a sales and services tax, on the payments we receive* which goes to Canada.

*  and again, we don't recieve any US taxes, they pass through our account.

[biglittleape]

I just noticed this, what a scam eBay is pulling.  Adding the sales tax THEY collect to the final value chargable amount is a total scam.  We should not be paying fees on taxes eBay collects on behalf of other regions.

This and the "international fee" because the item shipping address is in another country is a total joke. 

[recped]

Was the International fee that PayPal charged (since 2002) also a "joke"?

[sniper10000]

Yes a fee I get....the 2.35% and .4% international fee....
So 2.75% But Canadian sellers are paying item amount also.
So we PAY 12.75% of the tax and then are Taxed Canadian taxes on it.

Thats a joke and to me fraud. Can a store charge me tax then say I bought it in U.S and have to charge you 13% of tax on top of tax already paid. NOBODY gets credit card late payment rates for collection of tax.

U.S customs doesnt send a bill for 13% of whatever U.S buyer pays for duties fees and or taxes

[sniper10000]

Yes merchant fees a percentage of amount. NOT 12.75% and then tax it too.
They are collecting tax for another country WE sellers never charged it or received it yet are paying 12.75% of it....and the INTERNATIONAL rate too charged a fee for international then fee for tax then tax on tax.. Hi can I have the price of milk....