eBay Fees on Buyer-Paid Sales Tax

[BobC]

Originally Posted by Gusturd

Ebay likely is reporting all the sales tax remitted, but that doesn't change the fact that they are collecting who knows how many dollars worth of unnecessary sales tax and collecting a nice fee for themselves off it. I'm not even referring to the sales thresholds previously mentioned. I'm talking about the people like my wife that sell 10-20 items a year to clean out the garage/closets. These types of transactions don't require the collection of sales tax. How many of these sales are made on ebay each year?

First off, your statement that sales like your wife's aren't subject to the collection of sales tax may be inaccurate. It depends on what state the seller is in, and if that state has a sales tax. And then it further depends on if any of those 10-20 sales were to a buyer(s) that lives in the same state as the seller, because if so, that state may require the seller to collect sales tax on any same state sales since the seller is physically present in the state in which the item is shipped to.

However, I would still suspect a lot more sales that really don't require the collection of sales tax by the seller occur on Ebay than people might think or ever realize. Would not be surprised if far more than half of all Ebay sales are technically NOT legally subject to sales tax collection by the actual seller, and would not be shocked if it turned out only about 20%-30% (or maybe even less) of all Ebay sales would actually be subject to sales tax collection by the true seller.

What I wonder is how did Ebay get all sellers to agree to let them do this sales tax collection on seller's behalves in the first place. Remember, Ebay doesn't actually sell anything. Did they have a special update in their Ebay rules/contract for sellers where they effectively had all sellers sign off and agree to grant Ebay the exclusive right to act as their agent for sales tax collection? This was a very well thought out idea and plan by Ebay that does also benefit them. As some posters to this thread mentioned, they are not upset to pay a little something to Ebay to take care of the sales tax for them, so they don't really tick off all their sellers. And like another earlier poster mentioned, a lot of sellers likely feel the additional cost is very nominal. But as I tried pointing out in an earlier post, if you feel that buyers do take sales tax into consideration when making Ebay purchases now that effect the final bid/price they're willing to pay, the actual cost to sellers is likely much higher than they imagined. They just don't realize it, which is their loss and Ebay's gain.