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Wed Apr 12 2017 07:20:05

Buyers Think Sales Tax on eBay Is a Scam

By: Reader
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Dear Ina,
All of a sudden eBay sellers are adding sales tax to sales. This past weekend I did a "Buy It Now" to a seller in Arizona and another in New York state, that both added a line item of sales tax. Neither of them was a large vendor who could have had operations in my state.  

See this link to a collectors forum, people have varying theories why.

Thanks
Tom
Reading EcommerceBytes Letters Blog: Buyers Think Sales Tax on eBay Is a Scam
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Readers Comments

Buyers Think Sales Tax on eBay Is a Scam   Buyers Think Sales Tax on eBay Is a Scam
This user has validated their user name. by: Ric
       
Wed Apr 12 08:20:11 2017
eBay's recent and never ending fee hikes could be the motivator for some sellers to fraudulently collect sales taxes as a way to bring in new revenue and offset increases they face.

Sales tax does not appear to buyers until they are in checkout. As such, sellers could use sales tax as a way to increase revenue without raising prices and being demoted in search.

Given the many ways eBay is less than honest with their sellers, it would not be at all surprising to find a small sub set of sellers who will not think twice about resorting to collecting sales tax and never reporting the revenues.
Buyers Think Sales Tax on eBay Is a Scam   Buyers Think Sales Tax on eBay Is a Scam
by: rstpete This user has validated their user name.
       Web Site
Wed Apr 12 09:43:52 2017
I am seeing this more and more and I am confident it is a fraudulent way to increase profits.  I told the last seller I was going to contact his and my state and inquire about his sales tax status and he immediately refunded the sales tax (in fact he offered to ship me the product free which I declined). I charge sales tax on sales in my state because I have a sales tax license.  I have no way to send sales tax to any other state and I know those sellers do not either. I encourage buyers to challenge charged sales tax across state lines.  
Buyers Think Sales Tax on eBay Is a Scam   Buyers Think Sales Tax on eBay Is a Scam
This user has validated their user name. by: WOODJUNGLE! ON EBAY
       
Wed Apr 12 10:41:04 2017
What you pay as buyer is what you pay.  Whether its item price, shipping, handling, packaging, etc.   You need to be comfortable with the TOTAL dollar amount that you are paying. It makes no difference how its disbursed by the seller. When you see and add on TV saying for sales that says "NO SALES TAX," it just means that you pay that line item.  The seller pays it for you.  Its marketing, a ploy. LIKE FREE SHIPPING!  If you are contacting a state about this, you have too much time on your hands and I would suggest a hobby.
Buyers Think Sales Tax on eBay Is a Scam   Buyers Think Sales Tax on eBay Is a Scam
This user has validated their user name. by: WOODJUNGLE! ON EBAY
       
Wed Apr 12 10:41:58 2017
What you pay as buyer is what you pay.  Whether its item price, shipping, handling, packaging, etc.   You need to be comfortable with the TOTAL dollar amount that you are paying. It makes no difference how its disbursed by the seller. When you see an add on TV saying for sales that says "NO SALES TAX," it just means that you DON'T pay that line item.  The seller pays it for you.  Its marketing, a ploy. LIKE FREE SHIPPING!  If you are contacting a state about this, you have too much time on your hands and I would suggest a hobby.
Buyers Think Sales Tax on eBay Is a Scam   Buyers Think Sales Tax on eBay Is a Scam
This user has validated their user name. by: iheartjacksparrow
       
Wed Apr 12 12:17:13 2017
@Woodjungle - The issue in question doesn't have anything to do with the total paid. It's about a seller illegally collecting sales tax which he/she has no intention of ever remitting to the state(s) in question.

If I purchase an item that is coming from outside of California, I don't expect to be charged sales tax. If I was, I'd do as "rstpete" above and contact the seller demanding a copy of their seller's permit issued by their state's sales tax division.  
Buyers Think Sales Tax on eBay Is a Scam   Buyers Think Sales Tax on eBay Is a Scam
This user has validated their user name. by: WOODJUNGLE! ON EBAY
       
Wed Apr 12 12:28:49 2017
In no way am I associating myself to an unscrupulous seller, but it is none of your business what the seller does with the money he collects. Many sellers charge sales tax for out-of-state sales. It is not for you to determine if they're doing it legitimately or not. Of course that is my opinion but if you want to waste your time on that knock yourself out.
Buyers Think Sales Tax on eBay Is a Scam   Buyers Think Sales Tax on eBay Is a Scam
This user has validated their user name. by: toolguy
       
Wed Apr 12 12:36:47 2017
@WOODJUNGLE! ON EBAY

If I buy something for $10 and charged sales tax and the seller doesn't turn them into the state it's not only dishonest it's ILLEGAL!

It is my business when someone is trying to rip me off. . .
Buyers Think Sales Tax on eBay Is a Scam   Buyers Think Sales Tax on eBay Is a Scam
by: papergoy This user has validated their user name.
       
Wed Apr 12 13:31:44 2017
I expect that most states have a use tax where the purchaser is required to pay the state of their residence for the purchases. They could legitimately argue that they paid the tax to the seller- and then their state would go after the seller- illegally collecting sales tax (and not remitting to the state) is a serious offense.  I cannot believe any business would accept the potential consequences of doing that.  If the companies are collecting illegally BUT remitting the money to the state in question I'm sure that's something that can be worked out.  If they're charging the taxes and keeping it...you're looking at serious consequences.  I charge on sales to New York State as required by law, and am amazed at the number of people who complain.  I tell them that if they don't like the law..complain to their representatives not to me as I'm powerless to change things.  
Buyers Think Sales Tax on eBay Is a Scam   Buyers Think Sales Tax on eBay Is a Scam
This user has validated their user name. by: WOODJUNGLE! ON EBAY
       
Wed Apr 12 13:40:13 2017
All I'm saying is as a buyer you should speak comfortable with the amount you're paying. There's all sorts of ways to make a sale and what money goes where. It's like a shell game. Just worry about what's affecting your pocket.
Buyers Think Sales Tax on eBay Is a Scam   Buyers Think Sales Tax on eBay Is a Scam
by: tango This user has validated their user name.
       
Wed Apr 12 13:45:43 2017
...people...unless u know the exact totals of the sellers revenue per state for ALL his sales and other nexus determinations, not just ebay - you cannot judge.  Some sellers have sales tax nexus in other states (revenue about xy$, sales office, warehouse distributions etc, outside of home state.  Be sure, each states sales tax division is on any sellers *** who messes with the rules.  Its not a buyers call what/where a seller must collect sales tax.  And buyers, start to realize, if you bring enough stuff into CA (for example) without paying sales tax nor having a resale license, the CA Boe will be on you like white on rice sooner than later :) I cannot stand people who complain about their roads, services, institutions, etc. while not wanting to pay their share of sales tax. chers.
Buyers Think Sales Tax on eBay Is a Scam   Buyers Think Sales Tax on eBay Is a Scam
This user has validated their user name. by: WOODJUNGLE! ON EBAY
       
Wed Apr 12 15:24:49 2017
And I have to stop using the the speech to text option on my cell phone to post.
Buyers Think Sales Tax on eBay Is a Scam   Buyers Think Sales Tax on eBay Is a Scam
by: Lightning This user has validated their user name.
       
Thu Apr 13 00:57:11 2017
If you are a seller collecting sales tax to be forwarded to any type of municipal agency (state, city, local, etc.), you have to have the authority to do that.  That would be by obtaining a permit or license, etc.  If you have no intention of paying the money you collect, which you are technically holding in trust, you are committing fraud by misrepresenting the tax.  It is true that it is not obvious if the specific seller has obligations, has a nexus, has intentions to pay, etc.  None of that is very transparent.  If a buyer doesn't trust the seller, thinks he is pocketing the money, then the buyer's best recourse is not to do business with that seller, at a minimum.  
Buyers Think Sales Tax on eBay Is a Scam   Buyers Think Sales Tax on eBay Is a Scam
by: handmedownheaven This user has validated their user name.
       Web Site
Thu Apr 13 00:57:27 2017
States are actively scrolling sales sites looking for sales in their state which require payment of sales tax.  We have sold online for 3 years along with a brick & mortar business for 14.  When we closed the physical location, we closed our sales tax account and all of our sites now plainly state ''due to oppressive sales tax laws, we do not ship to the state of Georgia''.
Buyers Think Sales Tax on eBay Is a Scam   Buyers Think Sales Tax on eBay Is a Scam
by: moonmyst This user has validated their user name.
       
Thu Apr 13 00:58:07 2017
If a seller cannot provide their NYS sales tax ID number, I don't pay the tax and buy from someone else. I truly believe these sellers are not reporting the sales and simply stealing money. These idiots are going to ruin things for everyone.
Buyers Think Sales Tax on eBay Is a Scam   Buyers Think Sales Tax on eBay Is a Scam
by: comet This user has validated their user name.
       
Thu Apr 13 01:46:12 2017
@Tango--

I  have  no problem  paying MY State for MY share  of  roads;  bridges;  schools  etc.  However any seller outside of NY--or  who  could not prove to me  that  they are properly collecting  such sales tax BECAUSE  they have a business presence  IN NEW YORK--I  would def call out.  

The whole point  of  the "No across State line tax"  is because  the Government   in the other State does NOT benefit.  

I live where I can just as easily shop  in NY and pay  either 7% tax  where I live;  or 9% just  to the South of me;  or 5% in BernieLand  aka Vermont--or 0% in New Hampshire.  

When I have a big purchase to make--like a spendy computer  or  lawn tractor--do I go to Albany?  Or  to New Hampshire?  You betcha  I go to New Hampshire! NH govt  also knows I am going to buy gas  and meals  and visit other places  in the State--generating revenue.  

The "trade off"---In  NH  where they have NO car insurance requirements if you get  HIT--you had better hope YOUR insurance is good.  And if you WANT car  or motorcycle  insurance in NH--it is VERY expensive.  Their liquor is not taxed;  and it's cheaper;  so a LOT of people go buy  there. There are also a LOT of drumk people there!   Property taxes can be  a bit high;  and  hotel  taxes are a bit higher;  their car  registration fees are insane.  

If  NY  wants to come after me  these days for  making less on ebay than I could holding a yard  sale  once a summer month--well gee  it would keep me entertained.  IF I made  enough to make it worthwhile I would be overjoyed.  
Buyers Think Sales Tax on eBay Is a Scam   Buyers Think Sales Tax on eBay Is a Scam
by: Michael in BC This user has validated their user name.
       
Thu Apr 13 01:51:14 2017
I operate a Canadian federally and provincially registered business, and on all my eBay listings (almost all on the US site), I state in both the detailed sections at the top and in the general description : "Canadians pay sales tax".  Every Canadian resident who buys from me (irrespective of what eBay site the item is purchased on) gets charged anywhere from 5% to 15% sales tax, depending on their province or territory of residence.

Every buyer who pays tax receives a sales order receipt in his/her package which records my federal and provincial sales tax numbers, and breaks down the taxes charged.

I regularly get Canadian whiners who complain that "nobody else charges tax", or "why do I have to pay you sales tax when I'm buying from a US site ?".  

The reality is, if they're Canadian buying from a registered Canadian seller........they pay sales tax.  If they buy from a US resident seller, they are SUPPOSED to "self assess" the value of their purchase to determine the sales tax due, and to remit this to the appropriate federal/provincial revenue ministry.

This is the law up here, though little of it seems to be policed.  The Canada Revenue Agency is missing out on a LOT of money here.
Buyers Think Sales Tax on eBay Is a Scam   Buyers Think Sales Tax on eBay Is a Scam
by: comet This user has validated their user name.
       
Thu Apr 13 02:02:37 2017
@Michael in BC----The Canadian govt will REFUND any sales tax  a US citizen  is charged WHILE IN CANADA.  I  don't  know  how this works  if  you buy on line and get charged Canadian tax  when the item is shipped TO THE US.

When we cross  the Border  we can get  forms to fill out  and submit  with our  receipts  to  your Govt for  this refund--not usually worth it unless you are  buying something spendy  or  going to IKEA  for a trailer load of stuff (the Montreal IKEA is actually the closest to us!)

However  if  your  Govt  is "ginoriing"  collecting AND you MUST  be registered--well surely  your Tax Deot  will not  turn a blind  eye to this forever;  there may be  sales figures under which you do not have to collect tax;  and here in the US  some  sellers will PAY the tax to the State BUT not charge as  they themselves do not BELIEVE  in charging sales tax.  Makes little   sense to ME  but  some places have signs  to TELL you this.  (I have to think that  somewhere in their charge  that tax figure is built in--just not a line item.)  and  some how here in NY it is ALWAYS referred to as The Governors Share--as  if  each individual Governor  got the sum total of  all our tax money!    
Buyers Think Sales Tax on eBay Is a Scam   Buyers Think Sales Tax on eBay Is a Scam
by: Moonwishes This user has validated their user name.
       Web Site
Thu Apr 13 04:14:42 2017
Any seller that legally should be collecting sales tax from a particular state, should have no problem proving that with their license and would be happy to show it. If they don't have a license and aren't supposed to be charging it but they are, it is illegal anywhere in the USA. If they are trying to boost their profits and keep their ebay fees down, then the only reason they are doing it is, if I'm correct on this, sales tax is the only thing left that ebay does charge a FVF on. So the seller is trying to deceive ebay, the buyer and the state that they are supposedly collecting tax for.

Woodjungle thinks those who are still on ebay should ignore this problem, but I disagree. Anything that smacks of being illegal effects all sellers even if they are not participating. When you lose a buyer from a venue, they are many times lost for life as well as possibly anyone they may have told about a seller charging sales tax illegally. If the venue's CEOs won't clean things up, we need to do what we can to make the sites we sell on the best they can be.

One problem with someone charging sales tax for a state other than their own is they don't necessarily know what is a taxable in a state and what is not. Every year at back to school times, people comes in droves to PA to buy school clothes to avoid the sales tax, since for regular school, work and just to cover your body clothing does not have a sales tax. However, things like a wedding dress, Halloween costume, house accessories and dog coats, all are taxable. Most people in a sate have a general idea of what is taxable and what is not, so if the joker trying to add in sales tax on a nontaxable item is questioned by a buyer, he has been caught. He deserves to be turned in to the taxing authorities for whatever state he is charging tax on. It is not to hard to figure out if a seller would in all likelihood not have a presence in any state but their own. Look at what they sell and in what quantities. If their inventory looks like last year's yard sale rejects, then it is pretty obvious he is scamming the buyer, the venue and the state.
Buyers Think Sales Tax on eBay Is a Scam   Buyers Think Sales Tax on eBay Is a Scam
by: glasspackaging This user has validated their user name.
       
Thu Apr 13 06:40:49 2017
If the sell on Amazon with FBA ... they could easily have sales tax nexus in many states...no matter what their size..... THAT is a fact and law.
Buyers Think Sales Tax on eBay Is a Scam   Buyers Think Sales Tax on eBay Is a Scam
by: HarrySachs This user has validated their user name.
       
Thu Apr 13 07:00:22 2017
Minnesota requires I pay sales tax on all my sales so I started charging sales tax on all my lower dollar competitively priced items. Regardless of what state the buyer is in.  
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