eBay Tax Question:

[samosa4u]

I have a question for all you Americans here:

Do you guys pay tax on your eBay seller fees? I live in Ontario, Canada and we have to pay tax now. This actually started a couple of months ago, and prior to that we didn't have to. Here is some of my invoice below:

New fees Includes promotional savings where applicable
Final value fees $328.83
Subtotal $328.83
Total due $328.83

Tax Summary
Total Non-Taxable amount$0.00
Total Taxable amount $291.00
GST/HST at a rate of 13% $37.83
Total Current Invoice Amount $328.83

[BobC]

Originally Posted by samosa4u

I have a question for all you Americans here:

Do you guys pay tax on your eBay seller fees? I live in Ontario, Canada and we have to pay tax now. This actually started a couple of months ago, and prior to that we didn't have to. Here is some of my invoice below:

New fees Includes promotional savings where applicable
Final value fees $328.83
Subtotal $328.83
Total due $328.83

Tax Summary
Total Non-Taxable amount$0.00
Total Taxable amount $291.00
GST/HST at a rate of 13% $37.83
Total Current Invoice Amount $328.83

Did you say you are paying the tax as a seller, not as a buyer? If as a seller, I assume the tax is then being paid on the fees that you got charged by Ebay, correct? If so, that is a Canadian only issue. In the U.S., sales and use taxes are normally only charged to someone who purchases tangible goods and property. The Ebay fees charged to sellers are not considered services normally subject to sales tax here in the U.S. But just to be safe, in the U.S. sales taxes are handled by the individual states also, it is not a federal tax that covers all the U.S. So there may be one oddball U.S. state out there that does charge sales tax on such services but, if so, I'm not aware of it.

[Rhotchkiss]

This is a much more difficult question than a thread-response warrants, but I will try. As mentioned above, in America, sales tax is a state-level tax, usually levied on the sale of certain goods, paid by the buyer and collected by the seller, who then remits it to the state monthly/quarterly; use tax is the inverse, paid directly by buyer in cases where no sales tax was paid/collected- ignore it, rarely applies. In the US, as a general rule, no sale tax applies to cross-state transactions (this is where use tax theoretically applies, but again, ignore it); presumably the same rule applies to country to country sales.

Canada, whole different country, while different tax system, and I know zero about Canadian taxes. This could be a federal or province or local tax; it may only apply to certain goods or services; it may only apply when selling out of country. I have no clue. All I know is that seems like a very steep tax, so take advantage of the global health care and get your money's worth

[BobC]

Originally Posted by Rhotchkiss

This is a much more difficult question than a thread-response warrants, but I will try. As mentioned above, in America, sales tax is a state-level tax, usually levied on the sale of certain goods, paid by the buyer and collected by the seller, who then remits it to the state monthly/quarterly; use tax is the inverse, paid directly by buyer in cases where no sales tax was paid/collected- ignore it, rarely applies. In the US, as a general rule, no sale tax applies to cross-state transactions (this is where use tax theoretically applies, but again, ignore it); presumably the same rule applies to country to country sales.

Canada, whole different country, while different tax system, and I know zero about Canadian taxes. This could be a federal or province or local tax; it may only apply to certain goods or services; it may only apply when selling out of country. I have no clue. All I know is that seems like a very steep tax, so take advantage of the global health care and get your money's worth

That is exactly why I was asking the OP to confirm that he was being charged this on the fees he was paying as an Ebay seller. If that is case then it appears in Canada, at least where he is located, this provincial sales tax is charged on services he gets billed for, and Ebay is charged with billing and collecting it from him. As you and I pointed out, that is normally not the case here in the U.S. as the sales/use tax in most of all of the states is based on sales/purchases of tangible personal property, not fees for services such as this. Though there are some services that various individual states do charge sales tax on, like in Ohio we're I'm from there is sales tax charged on things like tanning or lawn care services. Ebay fees are not something to my knowledge that anyone here in the U.S. gets zapped with sales tax on, though some individual U.S. state might actually have it on their books, I'm not aware of it though. So the most likely answer to his question is no, we probably don't have what he has in Canada, specifically in whatever province he's living in.

[samosa4u]

Originally Posted by BobC

Did you say you are paying the tax as a seller, not as a buyer?

Yes, sir. I am paying 13% tax on my eBay seller fees. Here is more on this below:

To better reflect how we manage and operate our platform in Canada, on July 1st, 2017 we will be changing the contracting party for Canadian residents and businesses from eBay International AG to eBay Canada Limited, a Canadian corporation.

As a result, eBay users residing in Canada will begin contracting with eBay Canada Limited. This change will impact these users' User Agreement, User Privacy Notice, Billing Agreement, and other agreements with eBay.

The new contracting entity, eBay Canada Limited, is subject to Canadian tax law. As a result, sales tax (GST/HST/QST) will be charged on eBay fees starting July 1st, 2017. The applicable sales tax rate will vary by province, which we will determined based on your registered eBay address. You should confirm that your registered address is correct. The current applicable tax rates are:

Alberta (AB): 5.00%
British Columbia (BC): 5.00%
Manitoba (MB): 5.00%
New Brunswick (NB): 15.00%
Newfoundland and Labrador (NL): 15.00%
Northwest Territories (NT): 5.00%
Nova Scotia (NS): 15.00%
Nunavut (NU): 5.00%
Ontario (ON): 13.00%
Prince Edward Island (PE): 15.00%
Quebec (QC): 14.975%
Saskatchewan (SK): 5.00%
Yukon (YT): 5.00%

While the addition of GST/HST/QST on fees is new, eBay's prices will not change as a result of this legal entity change. Furthermore, you should see no interruption in your service as a result of this change, and you will not need to make any updates to your listings.

If you are a business user, we recommend that you consult with your tax advisor to understand your eligibility and the process for claiming an input tax credit on tax paid for services provided to your business.

Anyways, I was just curious to see if you Americans were also paying tax on your eBay seller fees, but you aren't. For years our contracting party was eBay International AG, which is located in Switzerland I believe, and we didn't have to pay any tax because of that. I think you Americans are contracting with eBay Inc., right?