Is eBay Collecting the Right Sales Tax for Washington?

by: sasikat9

Ebay has to pad their bottom line somehow. Little mistakes like that do a good job of it. BUT THEN AGAIN EBAY DOESN'T MAKE MISTAKES ONLY THE SELLERS DO.
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by: Silver Ice King

I have already run across issues where Ebay is charging my customer sales tax but not reflecting it anywhere so they are going to be keeping that money as there is no record of them invoicing it, per the customer service rep (no not one of the offshore reps).  I was supposed to hear something back from them a week ago regarding this issue and naturally it has been dead silence as they have no intention of fixing the problem.  Another glitch that favors Ebays bottom line but will eventually cause them nothing but grief because when they have to deal with the California Sales Tax auditors they are going to be running across some of the best auditors around as they pay for the best.  The rules for Sales Tax are so complicated in California that there is no way in heck that those Offshore programmers who cannot even get the US Only shipping Holidays right are ever going to succeed getting these rates correctly and eventually the sellers will wind up paying for this disaster.

California has so many district taxes that vary that you cannot even use the zip code to get it right as some zip codes have as many as 3 different sales tax districts.  So who is going to wind up paying for these errors when Ebay gets audited and slapped with not only back taxes (CA uses the 3 year look back) but the penalties and interest as they do not have the staff that can come close to keeping up with the ever changing rules and rates.  California made the district tax mandatory for any district where the Seller (Ebay in this case) sells more than $100K per year.  

This is going to be fun to watch but a disaster for all the Sellers.

by: SenseiSez

@Silver Ice King - well, then, the bottom line is that eBay will just be robbing the sellers (us). There's no two ways about it  or semantics to say otherwise. I highly doubt that they will get away with it, though. Why even bother to contact eBay. Stories I've heard and read about their collecting of these taxes, such as taxes charged on purchases from states where no online sales tax is in effect show an intentional action ... most definitely not a mistake on eBay's part. Instead of bothering to talk to eBay, affected, and otherwise, sellers/buyers should contact the tax departments of the states involved. Let eBay explain to them!

by: The End

It is ILLEGAL.

by: Paul W

No doubt that eBay will keep the extra 1.4% tax they are charging me.   Criminal!

by: Mark4

We have had many orders shipping to WA, in most cases ebay is not charging the right sales tax for the different juristictions in WA. Most cases ebay is overcharging. We have had several angry customers, we have told them to call the WA Dept of Revenue and the IRS and report ebay as we are not applying the tax, rather ebay is. I would love to know where all that "overage" is ending up but guessing we all know the answer to that.  

by: Marie

Ebay is NOT padding their bottom line by collecting sales taxes that are not owed.  I understand there are lots of people on this site that just don't like Ebay and anything they do has got to be wrong and/or illegal or both.

Taxes are just another hot button issue.  Lots of opinions on the subject itself, then throwing Ebay into the mix just adds even more issues and complaints.

With all that said, keep good records.  If you pay a sales tax you do not owe, when you go to file your B&O report with the state, take it as a deduction as it wasn't owed in the first place.  That will resolve your issue of overpaying taxes.

I've brought this vary problem to Ebay's attention as have many other members, both buyers and sellers.  They say they are working on it as they are aware it is an important issue for some.

Since this is a new thing [internet sales tax] chances are pretty darn high that these states with facilitator laws will also be adding to their auditing staff to make sure facilitators are complying to the new laws.  

by: Marie

BTW, just as an additional observation.  If a sale on Etsy is taxable and paid for through Etsy's payment program, they do charge a payment processing fee for the amount they charge the buyer for Sales tax.

Ebay, when processing the payment through PP does not do this.  I don't know about the managed payment program since I'm not in it.

by: cfrphoto

Recent communication from Washington State DOR regarding marketplace facilitator reporting requirements:

"Thank you for your email message dated January 14, 2019 regarding selling through marketplace facilitators.

Our responses follow your questions.

1. Are market facilitators required to report Washington State sales to sellers when tax is collected on their behalf?

No. Generally, marketplace facilitators must collect the sales and remit the sales tax directly to the Department of Revenue on behalf of their marketplace sellers.

2. If not, how do in-state businesses and certain other retailers subject to B&O tax file an accurate tax return?

Marketplace sellers should maintain confirmation that the marketplace facilitator will collect and remit sales tax on their behalf.

In this case, the marketplace seller should report their gross sales to consumers (including sales made through a marketplace facilitator) under both the retailing B&O tax and retail sales tax classifications. For the sales where a marketplace facilitator collects and remits Washington’s sales tax on their behalf, they may claim a deduction under the Retail Sales tax classification for “Retail Sales Tax Collected by Facilitator.”

If you have further questions, please write again.

Tina Greene
Tax Information Specialist  Washington State Department of Revenue    RulingsDOR@dor.wa.gov"

Comment: While no reporting requirement exists, I don't understand how sellers required to report Washington State Sales tax will be able to file a complete and accurate tax return without detailed reporting from marketplace facilitators.

by: Spit in the Ocean

It is worse than that if you a a registered resaler in the State of Washington , a tax exempt status . Ebay is going to charge the tax to us anyway . Washington State Revenue Dept does not have a clear path for unfairly taxed vendors to get a tax rebate for the overpaid sales tax .  I was informed to keep good records of the unfairly collected tax from a tax exempt business . The State also said they would not put anything in writing and if I wanted a legal opinion to hire a tax lawyer .

 A sympathetic legislator has agreed has agreed to here me tomorrow , and I just wrote the letter two hours ago .

Fellow Washingtonians it is time to call your legislature and demand some action . For all you other states , HERE IT COMES ! .  

by: Steverd

How am I suppose to report my quarter taxes for Washington state, when I don't even know how much they charged my in state buyers? Do I just put, I had $1000 of in state sales, Ebay will pay you?  

by: Silver Ice King

@SteverD

If Ebay collects the tax they will be reporting the sale under their tax ID, or at least that is what I would expect.  You did not collect the tax, so you do not have a taxable sale, Ebay does as the facilitator.  This is going to cause issues and comments from a lot of Sellers when they suddenly have no taxable sales to their state after having reported them correctly. in previous quarters.  It might be in your best interest to contact the agency responsible for collecting the tax in your state so they can potentially flag your account with this information.  It might help save an audit.

by: Rexford

"Ebay is NOT padding their bottom line by collecting sales taxes that are not owed."

Since you seem to "know" that eBay is not padding their bottom line by collecting sales taxes that are not owed, perhaps you can tell us where the additional money goes when eBay overcharges tax for a particular jurisdiction.  Do tell.

by: mcposty

wheres the department of justice? ebay is commiting tax fraud.

by: mcposty

Doesnt ebay raise your final value fee on taxes paid? that means they are probably doing federal fraud by over charging tax for the sole reason of charging more for final value fees. If the department of justice does nothing, it proves they are in bed with ebay and Trump should shut them down.