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Ebay sellers, You are now paying the paypal fees on sales tax collected by ebay.
amwldcoin
Posts: 11,269 ✭✭✭✭✭
Just had my 1st sale which included the sales tax on the paypal payment. Yeap, Paypal is collecting the tax for ebay and the seller is paying the paypal fee. GRRRRR!
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I don't miss selling on fleabay at all..................
If I use my VISA in Seattle, aren't they getting 3% (or whatever) of the entire financed amount, including the 10% sales tax??
It isn't the selling that was so bad, it is the buying and paying of retail prices on what was once a great auction venue. If the prices are always wrong when buying, the selling will also be always wrong (money losing).
Sales tax is collected by ebay on your behalf. Also, shipping is taxed also, in most states. Here is an example from last night:
Payment details
Purchase Total$225.00 USD
Sales Tax$17.94 USD
Shipping Amount$26.50 USD
Handling Amount$0.00 USD
Insurance Amount$0.00 USD
Gross Amount$269.44 USD
PayPal Fee-$8.11 USD
Tax collected by eBay-$17.94 USD
Net Amount$243.39 USD
In most states, shipping is taxable on a taxable sale, exempt if on an exempt sale. Handling is not taxable in most states, as it is considered labor, and most states do not tax labor.
So, the sale was $225 with $26.50 in shipping. Sales tax was charged on $251.50, for a total of $269.44. As the money "accrued" to me, if even for a millisecond, paypal charged their fee on the $269.44 plus the transaction fee of $.30.
Fees, taxes, surcharges, or whatever name is used is being charged by many.
Most big retailers just don’t break it down.
That gallon of juice for $5.00 (using a random round number) being sold by your local store does not show all the fees they had to pay. Just think if the sales tag listed every % of a cent being charged.
Plant (as in trees, etc.) fee, land fee, water fee, fertilizer fee, cutter/corer fee, electric fee, labor fee (and everything that entails), transportation fee, and fee this and fee that. Dang that’s some inexpensive juice... makes you wonder if its real juice or not?
Just need to know how to apply the fees imposed when doing ones taxes to get some relief... maybe.
Time to go play with my taxes... not... yet.
Why then as buyers do WE ALSO GET CHARGED on Ebay sales & PayPal ?
Well, just Love coins, period.
The cost of doing business through the internet of things. We can stomp our collective feet but it is still passed on to us who co Dime...thanks to "taxation" without representation.
Practice makes perfect & nobody is perfect. So, practice being nobody and be perfect !
Add salt and butter, too. Since the fee for them is probably already rolled into the popcorn price (if you add them or not.)
Do the math! Copied straight from my Paypal account! This is the 1st sale this has happened on and was last night.
Tax$4.74
Purchase total$59.74
Fee-negative $2.03
Tax collected by eBay-negative $4.74
Total$52.97
Edit to add, the sale was $55.00. I didn't want to put any other info out there!
Yep. Charge eBay buyers $3 to ship a $10 coin (30% of the cost of the coin, oh my!) and they think they're getting ripped on shipping. List the same coin with free shipping for $15, accept their $13 offer and everything's okay. Go figure.
eBay collects sales tax on a purchase. They also remit the sales tax to the appropriate state. All that is happening now is that the bookkeeping is showing the seller that the funds were collected and remitted. Sales tax isn't being paid twice, it's just being made more visible to sellers. The complaint in this thread is that PayPal is now applying their standard fee on the sales tax amount in addition to the rest of the transaction (see my comment below).
Think of it a different way: every merchant pays a fee on all the money they take in, regardless of where the funds are earmarked to go. If you buy something at Best Buy for $100 with 10% tax, they pay credit card fees on $110, even though $10 is sales tax. That's what's happening here. You aren't collecting and remitting the tax (eBay is taking care of that for you). but you are being charged a fee on the full amount of the transaction, which includes the sales tax that was processed. It's broken out for you as a separate amount, but it's all one transaction. PayPal would still be charged the fee for processing/collecting that sales tax even if they never showed you a record of handling that part of the payment. I hate defending PayPal, but this is nothing different than what every other retailer deals with, except that you personally aren't handling the collection and remittance of sales tax.
It can be a shock to some, finding out that lunches aren't free.
I expect so, but the merchant is still expected to submit the collected amount in full to the taxing authority unless Visa separates it out when paying the merchant.
If you're going to pay retail then it's best to shop around. eBay is my go to place when buying [moreso than Amazon] so if I don't like the price and/or selection I don't buy. I don't need to buy coins.
Before it is over...probably putting in some hours teaching summer school.
Add the OMG .21% to the OMG 1/50th of the 2.9% that Paypal will not longer refund on returns and the OMG .60% when the Ebay top seller discount was cut in half. Don't forget the OMG .15% when the Ebay fee on coins went up from 6% to 6.15%. Inevitably Ebay will soon charge a FVF on the sales tax as well.
Of course as as fellow well versed in economics you understand that these pesky little percentages multiply as they are applied to gross profit rather than the revenue.
I have the Ebay clock at 34 months.
So if some of them drop out (sales tax issue) fewer bidders on bay for me compete against?
Well, let's see... we could get all hysterical about The End Of Ebay As We Know It or maybe just add a buck to our prices and call it good. I know what I'll be doing.
Fortunes have been made predicting the downfall of once great business institutions. ThinK Sears, General Motors, Bethlehem Steel and for a few decades, K-mart was the nation's largest retailer with over two thousand stores. I know, they were a customer of mine.
Any way, your simple response of adding a buck to the price of the items that you sell souldns brilliant, except that if the market could tolerate the hike...you should have been there anyway, unless you are a wealth redistribution advocate and it that case maybe you should just give the stuff out for free.
Shortly before I opened an Ebay account in late 2000, a fried was on the site selling designer clothes. Gross margins were about 40%. Final value fees were hiked by Ebay from 2% to 2.25% on amounts over $25 and a number of sellers were in an uproar. Hell, it was only an OMG quarter point and I wasn't selling anything on the site, so who cares.
Well today the 2.25% fvf on clothing is about 9%. Even with a store. I suppose that earning a profit is not much of a motive any longer so this can be a really fun hobby for folks with time on their hands.
The frog continues to simmer.
The same could be said about eBay and PayPal raising fees, but here we are- fees do go up.
You are assuming here, that retail coin prices can be determined more precisely than is actually so. Some of my stuff, I could probably raise more than a dollar and it'll still sell, some needs to be lowered. It's not an exact science. The fact is- everybody selling on eBay is going to be dealing with the same fee increases. I'll do what I think will work best for me, if others are willing to hold their prices and make less of a profit, more power to them.
Yes, that fable. However, a frog will not stay in a pot of warming water until it boils to death.
As well, the boy who cried wolf is another fable, not an instruction manual.
set your price with a buy it now and let the buyer pay your fees.
"Money does not care about speeches on morality. Capital asks whether the rules will remain the same tomorrow. With inflation, people assume price is the problem, and propose regulation—but price is simply the message." - Martin Armstrong
Of all the criticisms lobbed at eBay for their various fee hikes, there is no precedent to think this is going to happen (and feel free to mark this thread and call me out if I'm ever proven wrong--I'll admit to my error then). The only reason I've heard to justify this is that eBay started charging FVFs on shipping. But if you look at the history, sellers used to sell items with massively bloated shipping fees and low item prices so the net was the same to the buyer, but the FVF was miniscule (think selling a $100 coin for $3 + $97 shipping instead of $97 + $3 shipping). By charging a FVF on the shipping, eBay made this practice useless. So really, it was the sellers playing that game who ruined it for everyone.
I am with you on the final value fee on shipping.
Ebay seems to take every opportunity to maximize return and their recent change regarding taxation accounting appears to be a step towards charging a fee on that portion of the equation.
A year from today we will see who was right and who pays for the schnaps and kichel.
I believe he is aware of that...
Not really. There are two reasons they made the change from two separate transactions (item and sales tax) to just one (item and sales tax combined):
1- It's annoying for buyers to have two transactions. I don't buy much, but it always bothered me to have two separate payments to record.
2- It cost them money to collect sales tax. Consider a $100 item with $10 tax. The first way, the seller paid the processing fee on the $100 and eBay paid the processing fee on the tax. So while they owed the state $10, they only collected $9.70 (let's pretend the fee is an easy 3%). So eBay lost money relative to when they didn't charge sales tax.
You can argue that now the seller is just the one losing money with the tax (now the seller collects $10, but then pays out the $10 and a $.30 fee), but that's simply how every other business works. Nowhere else would the processor take on an extra charge like eBay did originally.
I'm an engineer. Facts are all I have.
Another thing folks haven't considered is the end of year tax accounting! All the sudden you have 6-10% more dead revenue showing up in your paypal account you have to account for.
And this is why the sales tax collection is the backbreaker of Ebay. The exemption of two decades was lifted by SCOTUS and the advantage vs the brick and mortar stores has evaporated. The advantage over Amazon which grudgingly complies with the tax collector, is kaput.
I don't know... who has a better selection of coins to choose from- eBay or Amazon?
How do you know???? They just started placing them in our ebay accounts.
Because I have Paypal transactions that show just that. Money in, money out. Very simple math.
Dang, I am SOOOO out of it. I thought there were only 50 states. Time to get a new flag, or just glue on a couple extra stars.
If you go to shows in your area you have gas, meals, travel time, show entry fee.
Every venue has pluses and minuses.
Fred's* Rule: People tend to count the stuff that's easy to count.
(* not my real name)
Smitten with DBLCs.