New eBay Fees Will Include Commission on Sales Tax

by: Just Plain Irritated

I have some mixed emotions about eBay charging a commission on Sales Taxes.

eBay spent a huge amount of money on programming to collect the sales tax for all those states, plus the counties, cities, etc that require it. And to compile the data and to remit those collected taxes to the appropriate entities.  They are doing sellers a major service in doing that for us. For that, I feel we should be paying a transaction fee or something,

Is a commission fair? No I don't believe it is. It takes the same process to collect and remit for a sales tax collected on a $1000 sale as it does on a $10 sale.

Again, I think a transaction fee would be far more fair, and probably more acceptable to sellers.

by: toolguy

The average sales tax in the US is under 5%

So a sale of $100 would have a tax of $5, if eBay takes 10% of that it's .50 cents for a $100 sale

Would you rather collect and remit taxes to 44 states?

Or pay an additional 1% in fee's?

I wouldn't and I agree with the above poster

by: Marie

@Just Plain Irritated

I too firmly believe that Ebay should be paid for the collecting and remitting sales tax per the MFLs.  They have real costs involved in processing and managing this process.

Two points to consider when you are trying to decided how your feel about Ebay charging FVFs on Sales tax.

If it were not for MFLs, then the majority of sellers on Ebay would not likely even qualify to pay sales tax in any state but their own.  Ebay is 80% small sellers.  So very unlikely they would eve owe taxes to all those states so this problem would not exist but for the MFLs.

The other point is that most if not all the states Ebay collects and remits sales tax for are highly likely giving them a discount on what they have to pay.  So whether it is 2% or whatever it is, it should compensate for the money Ebay has put into the program.  Most states have programs like this for large companies.  Not always made public, but they are there.

by: hawk

how corrupt and crooked can anyone be , and get away with it by paying off the officials that oversee all this. ebay ceos are a disgrace to themselves , their company , and to this once great country , that used to have some laws to go by.

by: lancecorp

So Marie - by your own example then Ebay is already being paid for handling the remittance of taxes for sellers and should not be double dipping by charging FVFs on said tax. Just come out and say it.

by: Chicago48

That means sellers will pay a commission on sales tax that eBay must collect on behalf of states that charge it.
^^
Is this a tax on a tax?   :)

by: cvsharkey

If the "commission" is part of the fee for processing--that is because payment processing is completed on the entire amount. Always. Sales tax is never separated from the amount.

Think about it: you charge something on your credit card; do they charge you interest on the entire amount or do they only charge interest on the product/service?  

by: salesrep1

This is my take on this I figure the programming to collect the sale tax is mind boggling enough right or wrong each transaction would have seperate issues so to oversimplify 1 rate per category and thats it . May I remind u that there in the financial biz for years commissions on stock trades were in the $50-150 range making trading very costly then a radical idea the $7(can't remember or was it $5) Any way for $5 u could trade in the mean time the big companies laughed said How . Well for the next 20 years the big companies lost momentum still charging ridiculous commissions oh then the final dagger Free Trades no commissions wow now u see mergers . Well in the short term Ebay will oversimplify and charge more with less bookeeping needed. Eventually a new player will take to the horn be it Facebook or Pinterest or Square the next 10 years will be the push to new players.

by: ebayout

@cvsharkey
"you charge something on your credit card; do they charge you interest on the entire amount or do they only charge interest on the product/service?"
If you pay your card in full, there is NO "interest", aka additional "fee".
ebay gives you no choice. You're dinged from jump street.  

by: Sierra

I currently have 29 items listed on eBay; that's a lot for me. 13 of those items have a total of 27 watchers; these items are all BIN, not auctions. Until eBay lets me sell something, higher fees aren't going to bother me. LOL!  

by: railady

Anyone who collects and remits sales tax in my home state (and I have to assume it's the same in most others) is entitled to a VENDOR COLLECTION CREDIT.

When I complete the forms to submit with payment, toward the end, there is a space entitled "Vendor Collection Credit" showing the amount the state will award me for my work collecting and remitting the funds.  

I am sure eBay (and any other business) is qualified and entitled to this perk.  

by: railady

And as for the online selling venues like eCrater or Mercari that have evaded being labeled as a "Marketplace Facilitator" this far ... I wonder how long that is going to last. You can bet that now the big sites have caved, tax hungry officials are lining up their sights on the lesser ones. "Anywhere" that hosts individual vendors selling across state lines.  

They look like great places to sell for many folks, but for me, sadly, no.  Nobody in my interest area even knows they exist. Listings are about zip! No potential buyers visiting a site will not work for me. Alternative selling sites have been discussed at length in other posts on these forums. Let's keep this thread on track.

by: Sierra

@railady - Don't know what state you're in, but California doesn't offer that credit!  

by: iheartjacksparrow

@ railady - I agree with Sierra. What used to be the State Board of Equalization, and now the California Department of Tax and Fee Administration, has never offered me a "bonus" for collecting and remitting tax monies.

As to you comment regarding eCrater and Mercari and Marketplace Facilitator Law, the law is defined in California as: "[A} person who contracts with marketplace sellers to facilitate for consideration, regardless of whether deducted as fees from the transaction, the sale of the marketplace seller’s products through a marketplace operated by the person or a related person.”

eCrater does not charge any seller a fee for any transaction. Every seller has the option of designating a portion of their sales be paid to eCrater for to insure that our products are promoted on search engines. And that's only if the sale is derived from a buyer searching through the home page; if a buyer goes directly to our store, there is no fee ever collected. I have many repeat buyers who have bookmarked my store, so fees for those sales are never requested. I image the MFT laws are the same, or close to it, for every state.  

by: JohnGermaine

The GREED never ends!

by: Marie

@lancecorp
That is my opinion, right or wrong.  But it is what I believe.  If you are referring to my post to Just Plain Irritated, I was merely trying to give them a couple other points to consider when they are trying to form their own opinion.  My opinion in response to them was not important.  Besides I've already posted my opinion about this a couple times on this blog.  I didn't think I needed to yet again.

by: Marie

@Sierra

Have you ever read this article.

https://news.bloombergtax.com/daily-tax-report-state/e
bay-san-jose-move-toward-sales-tax-split-ahead-of-proposed-ban

by: Covid-20

You gotta love the "Suddenly new" accounts that you have never seen before posting pro-Ebay rhetoric. Looks like Ebay isn't so busy during this virus lock down after all so as not to keep the propaganda room stocked with fresh forum trolls behind their computers to try and desperately save their drowning name. Should utilize their goofy resources to bolster customer service phone support instead. Just sayin'.
Absolutely lame. Not buying it.

by: Sharkin

Ebay has to collect sales tax because they do more business than the minimum sales tax collection in each state.  Do any of you sell $500,000 to massachusetts in a year?  Then you do not have to collect sales tax for that state.  I have a website and do not have to charge sales tax.  Only in my home state Colorado.  Ebay should be paying the processing fees on the sales tax,  The seller has nothing to do with EBAY collecting sales tax.  That is on them.

by: ebayout

So...how many lines of code does it require to process "TX=8.25%"?
And for the work involved in all that programming, why must we pay a 10% fee ad infinitum?