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Seller Sues eBay in Federal Court for Double Taxation

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Seller Sues eBay in Federal Court for Double Taxation

Alexander Gifford filed a federal lawsuit against eBay Inc. on Wednesday. The lawsuit states the basis for federal jurisdiction is “double taxation.”

The seller is seeking relief, writing: “Return of all funds collected by eBay, Inc. on used goods through double taxation.”

The seller sets out his argument in the filing’s Statement of Claim as follows:

“The argument is that once you have purchased something legally at retail, which would include a sales tax, it is then yours to do with what you choose. The imposition of taxes again on the same asset at two different points of time would actually be the definition of double taxation. EBay, Inc. is collecting taxes on used assets which at the time of original point of sale a tax was collected, hence, the causation of this lawsuit.

“In most cases this tax lower boundary of profit is negligible and the profit is not big enough to have a tax imposed on it. An EBay fee, a transaction fee, a sales tax, and then increased shipping costs makes the argument that something is awry and needs correction.

“Attempting to make up deficits through a taxation without adequate representation starts to sound like a constitutional crisis.”

Gifford v. eBay, Inc. was filed in Eastern Michigan District Court, case 2:21-mc-50359.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.

10 thoughts on “Seller Sues eBay in Federal Court for Double Taxation”

  1. Unfortunately, I don’t think Alexander has a chance of winning. If a used car is sold, the new buyer pays sales tax, even though, when new, the original buyer paid sales tax on said car. If you go to a used book store, you pay tax, even though the original purchaser paid sales tax when the book was new. I don’t know of any law that states if someone, somewhere paid sales tax on an item, a future sale of the same item cannot be taxed.

  2. There are myriad of issues regarding ebay and sales tax, not the least being their charging of fees to the seller on taxes collected but never in the sellers’ possession, and for which they bear sole responsibility for collecting as marketplace facilitators. Talk about ripoffs. This particular suit sounds like it’s in the wrong venue. Individual states have varying code on collection of sales tax on used goods. I don’t believe there is a constitutional protection against double taxation.

  3. I do not know what this has to do with ebay specifically. I am in Canada and all for profit thrift stores charge tax on used and donated items. Only registered charities do not charge sales tax. The article says that the seller is seeking relief. As a buyer? Or is he seeking a reimbursement of fees that ebay charges on the total plus tax? There has been discussion for a long time about the legality of ebay charging fees on the total including tax. Perhaps this is what the case is about. Is there a link to read the document that was filed?

  4. Not sure if all states are the same, but in my state you can apply for a Sales Tax Exemption Certificate which you can use if buying something (say from an estate sale or swap meet) for resale.

    I think in this case, I think eBay is just following the rules, and not making up their own taxes. Fees maybe, but not taxes.

  5. While I applaud the OP – Im not sure this is the right fight/one Id choose to plant a flag on.

    I cant seem to find any state laws stating that used goods arent subject to taxation.

    While there is an argument to be made for it – it happens all the time/all day. Used book stores, flea markets, pawn shops even inheritances due to money/property being left in wills etc are subject to it.

    There are alot better things (stronger cases to be made) if you plan on suing eBay such as facilitating fraud, theft, coercion – stuff like that – things you can actually prove.

    Here you would have to find a statute that absolves you and or eBay from said tax collection – and Im not sure where that would be.

  6. He is likely in the wrong venue but he does likely have a case if he is not a professional seller but instead what my State calls a ‘casual seller’, and eBay is still collecting sales tax on his in-state sales. Here, casual sellers / occasional sellers are exempt from collecting sales tax or registering to collect same. If I sell my stuff, whether new or used, to some random guy down the road, and I do not make a regular business of selling that type of stuff, no tax is due, from either buyer or seller. I suspect many other States also have such an exemption.

    But you don’t usually file a case in Federal Court without a very qualified attorney and without first going through your local court system first, so there is likely more here than meets the eye. Who is his attorney? Someone other than the complainant must see some $$$ in the situation 🙂

  7. Don’t get too excited this person has filed multiple frivolous lawsuits over the years against all kinds of government offices including: Trump, the FBI, the Estate of George Bush, a Senator, the Vice President. The list goes on and on. Every case I looked into online was dismissed. He doesn’t seem to utilize an attorney (at least in the cases I researched) taking advantage of the system that allows you to file for free.

    He filed an APPLICATION to proceed without prepaying fees or costs by Alexander R. Gifford. (DPer) with the complaint against eBay.

    It’s likely the case will be dismissed before it even get’s to court.

  8. As others have mentioned, an item can be taxed for Sales any time it changes hands. It takes some type of exception to NOT be taxed, like a Resale Certificate on file, or a governmental ordinance allowing certain thresholds of activity. Plaintiff’s premise is entirely wrong, and wants to blame eBay for following the direction of the new marketplace laws. Loser with a capital L.

    EBay will have its own penance to pay for the dozens of ways it robs sellers in broad daylight. The tipping point is getting closer, and eBay will be begging for business. It will be too little, too late.

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