EcommerceBytes Letters to the Editor Letters to the Editor
Your emails to EcommerceBytes
For consideration, send your email to ina@auctionbytes.com with "Letters to the Editor Blog" in the subject line! Remember to include your name as you would like it to appear in the blog.
Tue Oct 2 2018 11:35:50

eBay Seller Charged Sales Tax on Free Shipping Supplies

By: Reader

Sponsored Link

Dear Ina,
The pasted email below needs to be read from bottom to top - in short, it seems eBay's shipping supplies seller is now charging sales tax to all buyers wherever they are.

"We recently started to collect sales tax in all applicable states due to the change in eBay regulations that was imposed by the supreme court. If we have over a certain sales volume in a year we are required by law to charge sales tax on purchases sent to the corresponding states that require it."

I live in Georgia, and Georgia's website on sales tax does not state this, so they are collecting taxes on out of state sales in which they have no sales tax nexus presence which the buyer should be paying on his year end taxes - this is either duplicate tax collection, or tax collection not required with a one-size-fits-all approach.

I have asked them to provide me with their Georgia State tax ID number but haven't heard back yet.

Do you think this means large amounts of "sales tax" is going to be collected by some eBay sellers but never paid to the respective states as there is no obligation for them to do so? This is similar to eBay's Global Shipping Programme where they collect duty/tax on items not even dutiable in many countries, such as books, magazines, etc.

If you can post this for discussion it would be most interesting.  

As always, great blog, read it most days, post on some, but I can't see us remaining an eBay seller once they force managed payments on us in a few years time.
Kind regards,
N.



Comments (19) | Permalink

Readers Comments

Perminate Link for eBay Seller Charged Sales Tax on Free Shipping Sup   eBay Seller Charged Sales Tax on Free Shipping Sup

by: dander This user has validated their user name.

Tue Oct 2 12:18:25 2018

if you get a discounted or free item, some states require sales tax paid on the full value of the item. Not saying its fair or not fair. But its a fact

Perminate Link for eBay Seller Charged Sales Tax on Free Shipping Sup   eBay Seller Charged Sales Tax on Free Shipping Sup

This user has validated their user name. by: Marie

Tue Oct 2 12:45:18 2018

This is a question that Ebay has not yet addressed.  In some states, sales tax is NOT due on a Seller's shipping supplies.  They are tax exempt.  To my knowledge Ebay has no way for us to flag our shipping supply purchases as tax exempt.

I don't know which states allow for this in their regulations, but it is something that needs to be addressed by Ebay.  ESPECIALLY with their seller of Ebay shipping supplies.

Perminate Link for eBay Seller Charged Sales Tax on Free Shipping Sup   eBay Seller Charged Sales Tax on Free Shipping Sup

by: Silver Ice King This user has validated their user name.

Tue Oct 2 23:18:07 2018

I would ask for their resale tax ID for my state and if they are unable or unwilling to provide it, I would contact my agency responsible for Sales Tax and let them know that this company was charging CA sales tax and appears to not submitting it.  They would be in touch with them so quickly its not even funny as that is one thing they will not tolerate from businesses.

Technically I am exempt from the tax, but if they are that desperate I will pay it, but will also do all I can to make sure that California is aware of what they are doing as they WILL contact them AND assign them a resale license number which will require them to submit at least quarterly reports and divide the sales tax up among at least 63 various taxing authorities with tax rates between 7.5% and 10.25%.  This ought to be interesting to watch and see how they react to having to deal with that aspect of things.

The tax districts are so screwy out here you cannot even charge by zip code as some zip codes are in multiple tax districts depending on the address.

Perminate Link for eBay Seller Charged Sales Tax on Free Shipping Sup   eBay Seller Charged Sales Tax on Free Shipping Sup

This user has validated their user name. by: LasVagueness

Wed Oct 3 00:49:35 2018

I pay sales tax for eBay shipping supplies...always have to the best of my recollection.  

Perminate Link for eBay Seller Charged Sales Tax on Free Shipping Sup   eBay Seller Charged Sales Tax on Free Shipping Sup

by: mcposty This user has validated their user name.

Wed Oct 3 02:24:35 2018

They dont have to collect taxes no matter what the supreme court says. States have no power over other states.

Perminate Link for eBay Seller Charged Sales Tax on Free Shipping Sup   eBay Seller Charged Sales Tax on Free Shipping Sup

by: angryllama This user has validated their user name.

Wed Oct 3 04:36:54 2018

@ Silver Ice King You are smack on with the TRUTH of what this wrong-headed legal ruling having come down NEGATING the QUILL decision that only companies with a NEXUS ( physical presence ) in any given state USED TO BE required to collect AND REMIT sales taxes in those (usually few or only ONE) states where THAT company had a NEXUS.  
You are also right that entirely too many who have been commenting on this just KEEP ON MIS-Categorizing this SNAFU that is still coming as though Internet Sellers with NO NEXUS in more than their Very Own State will "... only be collecting and remitting STATE sales taxes ..."  NOPE.  As you pointed out citing CALIFORNIA example where there are easily HUNDREDS of different Taxing Authorities who have TOTALLY LEGAL and APPROPRIATE claims on sales made within their TOTALLY LEGAL taxing district.
I owned and operated an Industrial Sales business in LOUISIANA and I can TESTIFY that just for LOUISIANA we were faced with the same sort of MishMash of multiple different TAX rates within just about every one of the state's "parishes"... think COUNTIES.  One extra notable one actually provided a 4th Graders HAND DRAWN Map showing WHICH rate for WHICH portion of THEIR parish.
Ditto on ZIP CODES not being sufficient.  Right in my own Houston neighborhood, MY zip code covers residents AND businesses that are in three different incorporated Texas cities: Houston, Cypress, AND Katy.

It won't happen, but reverting to an acknowledgment that QUILL was SETTLED LAW, a proper ruling and SHOULD AGAIN be the Law of the Land is the only way to turn this FIASCO back into something workable.

Perminate Link for eBay Seller Charged Sales Tax on Free Shipping Sup   eBay Seller Charged Sales Tax on Free Shipping Sup

by: Eagle This user has validated their user name.

Wed Oct 3 05:46:50 2018

Congress needs to give out a directive for sellers to follow on the new sales tax law that covers all states, like a 5% across the board instead of guessing at how much to pay per state, a total sales in each state before sellers are required to collect, and paying directly to each state as required. If they want us to collect sales tax across state borders then the government needs to set up a central collection agency where sellers can send one check with total collected for every state and the agency divides to up to each state. Instead, they either do nothing and complain about Trump did this and Mueller did that, and Rosenstein did it all. We vendors should not be responsible for the first dime until Congress can come up with a balance and equal way of collecting and submitting the tax.

Perminate Link for eBay Seller Charged Sales Tax on Free Shipping Sup   eBay Seller Charged Sales Tax on Free Shipping Sup

by: InspirationPlus This user has validated their user name.

Wed Oct 3 06:49:29 2018

I order my USPS shipping supplies directly from USPS. Free means free... no sales tax and delivered within a few days.

I only ship USPS, so I don't know how FedEx or UPS does it.

It's my understanding that free supplies do not qualify for sales tax. How can 'nothing' be taxed? 5% of 0 is 0. It's not the same as a product that has had a price and the price is reduced. I would report the incident to the state AG or to USPS, UPS, FedEx... whatever the case may be. At least you will get clarification and if it's illegal, it will be taken care of with the seller.

Perminate Link for eBay Seller Charged Sales Tax on Free Shipping Sup   eBay Seller Charged Sales Tax on Free Shipping Sup

by: thebobman This user has validated their user name.

Wed Oct 3 08:25:29 2018

Shipping/packing supplies are sales tax exempt in wisconsin as they are technically used for resale as they are transferred to the customer as part of the sale

Perminate Link for eBay Seller Charged Sales Tax on Free Shipping Sup   eBay Seller Charged Sales Tax on Free Shipping Sup

by: Barbbie This user has validated their user name.

Wed Oct 3 09:21:16 2018

I am in on reporting anyone who charges me taxes illegally.  My state can use the money if they are going to charge it to me.  As far as I know, ebay has no way to upload your tax exemption, do they?
We also have another lovely rule to go with all of our weird tax divisions, if you overcharge a buyer, you incur fines if they catch you and must repay the buyer as well. With taxes from 0 to double digits, I cannot express what a PITA it is to have to choose just one rate, I absolutely hate to make sales in my state, when I see one, I dread it. If it is high tax area, I just lost money because I still need to pay the state the right tax; if it is low tax area, I need to make a refund.
This whole thing is a nightmare.

Perminate Link for eBay Seller Charged Sales Tax on Free Shipping Sup   eBay Seller Charged Sales Tax on Free Shipping Sup

by: Snapped This user has validated their user name.

Wed Oct 3 10:17:12 2018

''This whole thing is a nightmare.''

You ain't dreamed nothin' yet.  Wait until eBay suggests one should 'factor in' sales taxes into the selling price so to be able to advertise their item as being tax 'free'.  

Instant 3-5% GMV increase, that.  

Sleep well....

Perminate Link for eBay Seller Charged Sales Tax on Free Shipping Sup   eBay Seller Charged Sales Tax on Free Shipping Sup

This user has validated their user name. by: Marie

Wed Oct 3 13:03:59 2018

@InspirationPlus

Saying these are "free" supplies is a bit misleading.  They aren't free.  Each seller with a store receives a coupon every quarter that they can use on Ebay branded shipping supplies.

That coupon is used against the cost of whatever supplies the seller chooses to order.  Any balance remaining after the coupon is applied is the responsibility of the seller to pay.

Ebay has NEVER offered "free shipping supplies", they have been offering a quarterly COUPON in a predetermined amount guided by the store level the seller has.

@bobman

Yes because the become part of the end product being sold.

Perminate Link for eBay Seller Charged Sales Tax on Free Shipping Sup   eBay Seller Charged Sales Tax on Free Shipping Sup

by: Whatever This user has validated their user name.

Wed Oct 3 13:05:48 2018

Well call me stupid but I was always charged sales tax and I could care less since I'm getting the supplies for free - who cares?

Perminate Link for eBay Seller Charged Sales Tax on Free Shipping Sup   eBay Seller Charged Sales Tax on Free Shipping Sup

by: InspirationPlus This user has validated their user name.

Wed Oct 3 13:40:51 2018

@Marie
The subject of this thread is "eBay Seller charged sales tax on FREE shipping supplies'. I was simply responding to the OP's concerns. That's ok, isn't it?

As I stated, I don't order my shipping supplies from eBay, I order them directly from USPS. The free supplies, such as boxes and Priority labels are truly free with no sales tax and delivered free by USPS.  

Perminate Link for eBay Seller Charged Sales Tax on Free Shipping Sup   eBay Seller Charged Sales Tax on Free Shipping Sup

This user has validated their user name. by: Marie

Wed Oct 3 15:40:36 2018

@InspirationPlus

Well of course I did not say it wasn't.  I simply said the supplies are NOT "free".  Ebay issues specific coupons for supplies, any amount do above and beyond the coupon for the items the seller is ordering is due and payable before the order can be placed.

Whether the title is correct or the way people view these supplies are correct or incorrect.  Ebay does NOT offer "free shipping supplies".  Ebay offers a coupon that can be applied to whatever Ebay branded shipping supplies you might like to order from their designated seller of the items.

Sorry I ruffled your feathers.  No disrespect was intended.

Perminate Link for eBay Seller Charged Sales Tax on Free Shipping Sup   eBay Seller Charged Sales Tax on Free Shipping Sup

by: InspirationPlus This user has validated their user name.

Wed Oct 3 15:55:57 2018

@Marie

Well, I see where there would be sales tax applied on those items then. I wasn't aware of that. I was just addressing the OP and stating where I get my supplies and that they are free with no tax. My feathers weren't ruffled, but I don't think that comment was necessary. No disrespect intended.

Perminate Link for eBay Seller Charged Sales Tax on Free Shipping Sup   eBay Seller Charged Sales Tax on Free Shipping Sup

by: Tiffee Jasso This user has validated their user name.

Wed Oct 3 22:10:21 2018

In California when I use a coupon that gives money off an item, I am taxed at retail price because the coupon may make the item less in my cost, the store is still  responsible for the entire sale price as far as our state taxes go. Because the actual sale is X amount plus the coupon amount.  

Perminate Link for eBay Seller Charged Sales Tax on Free Shipping Sup   eBay Seller Charged Sales Tax on Free Shipping Sup

This user has validated their user name. by: Lightning

Fri Oct 5 00:04:47 2018

Got charged sales tax today from Bascom, ebayshippingsupplies.  It was on the full amount, which is the correct way of doing it, if they were even SUPPOSED to be doing it.  Pretty sure they are NOT supposed to be charging tax.  It's a windfall for them, a pure money grab.  Probably get about $4-$5 extra collected per quarterly order from a million ebay store owners, maybe more.  NICE!! (for them, at our expense). Who will police THAT situation?  I'll get them from somewhere else.  No wait, I have to order from them to use the voucher.  Oh, well.  Tail between my legs again.

Perminate Link for eBay Seller Charged Sales Tax on Free Shipping Sup   eBay Seller Charged Sales Tax on Free Shipping Sup

This user has validated their user name. by: Lightning

Fri Oct 5 00:05:40 2018

Oh, and this is a change from last time.  Didn't pay tax on the July purchase.



Login is required to post comments.
To sign in to leave a comment using your AB Verify User Name, fill in the form below. If you have not yet signed up for AB Verify, or if you'd like more information, go to the Registration Page
.

Login for AB Verify
Be sure and use your email address and password to log in.

 
Email:
Password:
 
 Forgot Your Password?
 Even though you are signed in with the AuctionBytes Blog, you will have to sign in to the EcommerceBytes blog. But you can sign in with your existing AB Verify info.