Will sellers continue to sell on Ebay under the new EBAY MANAGED PAYMENTS??

[thecatspajamas]

Cory, you are correct for sales to states which do not have a remote sales tax, or which have low sales tax. Because eBay will be charging that full 12.35% rate to process the "full sale price" (final bid + shipping + sales tax) vs. the current arrangement where the ebay final value fees are not charged on the sales tax portion, there will be a number of states whose higher sales tax rate drives up that total fee price to slightly larger than it is now. It's been a bit since I worked out the numbers, but I recall the break-even point being somewhere around 5% sales tax resulting in equivalent fees for either scenario.

So some higher, some lower, it's probably a wash in the long run for most online sellers. The sticking point for much of the conversation I've read over the new fee structure is that eBay is essentially charging their full commission on the sales tax versus the current arrangement where the only fees charged on the sales tax are by Paypal for processing the transaction. Because they are no longer breaking out the fees for each sale into separate final value fees and payment processing fees, some are viewing this as a tax on a tax kind of scenario, and take issue with that scenario.

Edited to add: I went back and re-worked the math, and the break-even point if you do not have an eBay store is when selling to a theoretical state that has 5.82% sales tax. If the sales tax rate is higher, you will pay slightly more in fees under Managed Payments than previously with Paypal processing the fees.

Also note that if you have an eBay store that is more than just the basic store, the eBay fee under MP drops to 11.5% instead of 12.35%. In that scenario, the seller would see a savings in all cases where the sales tax rate is less than 16.23% (which I believe would be in all cases). So you are correct in that scenario.