marmat Posted April 25, 2020 Share Posted April 25, 2020 I noticed that the Paypal fee on my payments received from ebay is calculated on the total including the tax amount that ebay/paypal collects directly from me. I mean, if I sell an item for $100 and ebay add $10 for taxes, the paypal fee is calculated on a total of $110. I wonder if it is legit. The tax amount is collected by ebay and paypal, it has nothing to do with my transaction. The paypal account is only the bridge from the costumer and the government. I admit that I did not read the paypal conditions in full, what is the general opinion on this matter? Link to comment Share on other sites More sharing options...
Motor City Rob Posted April 25, 2020 Share Posted April 25, 2020 Funny, I just noticed the same thing this week. Seems unlawful, but I'm guessing they did their homework and it's legit. PayPal takes the total of sale price, plus shipping cost, plus taxes, and takes 2.9% of that total plus 30 cents for every transaction. It really adds up over time. Link to comment Share on other sites More sharing options...
marmat Posted April 25, 2020 Author Share Posted April 25, 2020 Here is a link to a discussion in the paypal community https://www.paypal-community.com/t5/Business-Tools/Fees-being-charged-for-the-amount-of-SALES-TAX-Ebay-is/td-p/1954502 Considering the total amount of paypal transactions processed every year, the sum collected in fees over taxes is HUGE Link to comment Share on other sites More sharing options...
Action252Kid Posted April 25, 2020 Share Posted April 25, 2020 Wow, I hadn't noticed this. Annoying for sure, but not as bad as eBay charging final value fees on shipping. If you sold (for example) $10,000 over the course of a year, and let's say buyers pay 5% in sales tax on that $10k, it would be $500 in sales tax collected/PayPal fees charged to you is ($500 x 3%) = $15). But if you charged $1,000 on shipping on those sales, eBay takes their cut of this (10%), which would be $100. Both are annoying/unfair, but can't really do much about either one. Link to comment Share on other sites More sharing options...
JollyComics Posted April 25, 2020 Share Posted April 25, 2020 Yeah, PayPal fee is about 3.75%. I sold a book for $25. Added to $8.85 shipping. It's about 5.35% Sales tax (California). So, I had to pay PayPal fee after the combination of the sale cost, Sales Tax and Shipping cost. Link to comment Share on other sites More sharing options...
path4play Posted April 25, 2020 Share Posted April 25, 2020 13 hours ago, marmat said: I noticed that the Paypal fee on my payments received from ebay is calculated on the total including the tax amount that ebay/paypal collects directly from me. I mean, if I sell an item for $100 and ebay add $10 for taxes, the paypal fee is calculated on a total of $110. I wonder if it is legit. The tax amount is collected by ebay and paypal, it has nothing to do with my transaction. The paypal account is only the bridge from the costumer and the government. I admit that I did not read the paypal conditions in full, what is the general opinion on this matter? WTF? I'm telling you this tax deal is hurting sales and prices on the margin. Okay, so yes, tax Amazon etc., to help even the playing field with local stores that pay mega tax. I get it, should have been doing that from day 1. Tax, on 80 year old paper flea market/garage sale goods with every flip and sale? Give me a break. PayPal just getting in the the scam. Link to comment Share on other sites More sharing options...
James J Johnson Posted April 25, 2020 Share Posted April 25, 2020 1 hour ago, Action252Kid said: Wow, I hadn't noticed this. Annoying for sure, but not as bad as eBay charging final value fees on shipping. If you sold (for example) $10,000 over the course of a year, and let's say buyers pay 5% in sales tax on that $10k, it would be $500 in sales tax collected/PayPal fees charged to you is ($500 x 3%) = $15). But if you charged $1,000 on shipping on those sales, eBay takes their cut of this (10%), which would be $100. Both are annoying/unfair, but can't really do much about either one. Paypal + ebay = Link to comment Share on other sites More sharing options...
Lightning55 Posted April 26, 2020 Share Posted April 26, 2020 This had been in place since October of last year. PayPal is processing payments, and doesn't care if it's for goods, taxes, or shipping. They are going to take their cut. If you pay your property taxes with a credit card, your town has to pay the credit company for handling the payment. Just the way it is in the business world. My average transaction is probably $80. Taxes might be anywhere from $5-$8 on that. PayPal will take an extra 15 cents to 24 cents, charged on the tax. The bright side is that someone, specifically NOT ME, is handling the tax reporting to 50 states. State sales taxes, county sales taxes, local sales taxes, countless jurisdictions. Just to be free of that nightmare, I'd pay DOUBLE. Be thankful for small favors. taro90, Action252Kid and WEBHEAD 3 Link to comment Share on other sites More sharing options...
Myowncollector Posted April 26, 2020 Share Posted April 26, 2020 They will take $ anyway they can. Miss the old days of getting checks or money orders in the mail. Side note I am surprised it look states this long to collect their sales tax and their are plenty of states that still don't. I think retail sellers were supposed to always charge a sales tax at least if you sold to someone in your same state and buyers depending on state were supposed to do the same with out of state purchase, but how many actually did. But now you are losing 2.9 percent out of a tax that isn't your responsibility? Not a tax expert but doesn't seem right. Maybe buyer should pay the fee on their sales tax paypal transaction. Sale tax plus 2.9 percent. Link to comment Share on other sites More sharing options...
Shrevvy Posted April 26, 2020 Share Posted April 26, 2020 In addition, eBay is forcing the collection and payment of sales tax that is not due. Each state has its definition of nexus. Depending on the state, a seller may need to transact $250,000 in that state to be required to make state sales tax payments. They are forcing a payment that is not required and profiting from it (at least Paypal is and eBay will as well as their payment system ramps up). Link to comment Share on other sites More sharing options...
Lightning55 Posted April 26, 2020 Share Posted April 26, 2020 55 minutes ago, Shrevvy said: In addition, eBay is forcing the collection and payment of sales tax that is not due. Each state has its definition of nexus. Depending on the state, a seller may need to transact $250,000 in that state to be required to make state sales tax payments. They are forcing a payment that is not required and profiting from it (at least Paypal is and eBay will as well as their payment system ramps up). It has nothing to do with the individual Seller. EBay falls under Marketplace laws, and meets that threshold easily in every state, regarding nexus. They have no choice but to comply or be found culpable. Previous to the enactment of these laws, it WAS up to sellers to determine if they met the nexus minimums, but that bus has left the terminal. Link to comment Share on other sites More sharing options...
littledoom Posted May 3, 2020 Share Posted May 3, 2020 Don't worry, this July ebay is distancing itself from PayPal with the expiration of their contract Link to comment Share on other sites More sharing options...
