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Ebay Collecting Ohio Sales Tax And Shipping Tax-Others To Follow

 
 
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Pillar of the Community

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 Posted 09/12/2019  10:46 pm Show Profile   Bookmark this topic Add jmkendall to your friends list Get a Link to this Message
I just noticed that my last purchases were more expensive than I thought. I looked at my invoice and Ebay is now collecting 7 to 8 percent sales tax. This sales tax includes the money you pay for shipping. If you buy an item for $20 and shipping is $20 you are effectively paying a 14 percent tax rate. Which, of course is variabe depending on shipping cost.

I don't know about you, but this will surely affect my buying habits knowing that from now on I will be paying more for each item. Perhaps it is time for me to start buying locally in the grey market.

What say you?
Edited by jmkendall
09/12/2019 10:56 pm
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13167 Posts
 Posted 09/13/2019  05:08 am  Show Profile   Bookmark this reply Add Spence to your friends list Get a Link to this Reply
@jmk, this previous ccf link has a pretty vigorous discussion of this issue (just not focused on Ohio):

http://goccf.com/t/336727
"The danger we all now face is distinguishing between what is authentic and what is performed."
-----King Adz
Bedrock of the Community
United States
12472 Posts
 Posted 09/13/2019  10:05 pm  Show Profile   Bookmark this reply Add basebal21 to your friends list Get a Link to this Reply
They're only charging sales tax for locations where it's required so shopping locally won't change that fee. You'll also be at the mercy of what they have.

While I don't like the potential burden it places on sellers, as a buyer nothing should have really changed as it should be been reported for taxes anyways
Edited by basebal21
09/13/2019 10:07 pm
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22055 Posts
 Posted 09/14/2019  09:41 am  Show Profile   Check nss-52's eBay Listings Bookmark this reply Add nss-52 to your friends list Get a Link to this Reply
If you pay 7% on a $20 purchase, and 7% on the $20 shipping, you are still just paying 7% of $40.
To say you are paying 14% on the $20 purchase and 0% on the shipping is incorrect.
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 Posted 09/14/2019  4:54 pm  Show Profile   Bookmark this reply Add BStrauss3 to your friends list Get a Link to this Reply
What you pay depends on how your state law defines it (i.e. whether the taxable price includes s/h or now).

Don't like it?

Take it up with your state's legislature.
-----Burton
45 year / Life ANA member (joined 12/1/1973)
Life member: Numismatics International, CONECA
Member: TNA, FtWCC, NETCC
Owned by four cats and a wife of 35 years (joined 1983)
Pillar of the Community
United States
1360 Posts
 Posted 09/15/2019  2:30 pm  Show Profile   Bookmark this reply Add jmkendall to your friends list Get a Link to this Reply
NSS. I don't think you get it.

If you have a $20 item with 7% sales tax you pay: $21.40

If you have a $20 item with 7% sales tax AND 7% tax on a shipping bill of $20 then your total is $22.80.

Making your effective tax 14 percent.

If I buy an item here in Ohio from any other vendor who will then ship it to me, other than ebay, there is NO tax on shipping. None. Ohio does not require sales tax on shipping.

I am a vendor in Ohio. I am very familiar with the tax laws. I asked the state about this last week. Just to make sure I don't have to remit extra taxes owed.

There reply was that sales tax is only due upon the sale itself. Indeed the woman I talked to had the gall to say "that is why it is called a sales tax, and not a shipping tax".

With all the shady things ebay has done over the years it would not surprise me to see them claiming taxes on the total amount given to them by the customer ( like they claim that money for shipping is "profit", or part of the sale) and then keeping that 7 percent.

Until of course someone complains, and they say "whoppsy, sorry, won't do that again".
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 Posted 09/15/2019  3:57 pm  Show Profile   Bookmark this reply Add basebal21 to your friends list Get a Link to this Reply

Quote:
NSS. I don't think you get it.

If you have a $20 item with 7% sales tax you pay: $21.40

If you have a $20 item with 7% sales tax AND 7% tax on a shipping bill of $20 then your total is $22.80.

Making your effective tax 14 percent.


That's not how it works either, you aren't comparing the same thing. Either you have to pay for shipping or you don't. If you have to pay for shipping your first example would be
7% on $20 which is 21.40 + 20 for shipping which brings your total cost to $41.40 and the tax rate of your total purchase cost is actually less than 7 percent.

You're paying the 40 regardless of what is and isn't taxed which is your total purchase cost. Taxing both halfs of it is still just 7% of your overall purchase.
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 Posted 09/16/2019  11:20 am  Show Profile   Bookmark this reply Add jbuck to your friends list Get a Link to this Reply

Quote:
as a buyer nothing should have really changed as it should be been reported for taxes anyways
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 Posted 09/17/2019  10:31 pm  Show Profile   Bookmark this reply Add jmkendall to your friends list Get a Link to this Reply
Look I don't want to beat a horse, but the simple truth is that there was the price before taxing shipping, and the price after taxing shipping.

Ohio does not tax shipping. Ebay taxes shipping. So in effect you are, in the original scenerio paying a 14 percent tax. It just does not get any simpler than that. Cripes, I've got a degree in mathmatics...not that you need one to see this.

Also, Ohio, and most states do not now, or ever have taxed shipping. So there is nothing for you to have reported or remitted. The issue is not remitting taxes on buying a product ( which was not required under the old tax code in this state for mom and pop sales. Only for those people with a vendors license). The issue is remitting taxes on shipping which is NOT required.

I just don't see how to make it any simpler without looking like I'm insulting someone's intellegence.
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 Posted 09/17/2019  11:55 pm  Show Profile   Bookmark this reply Add basebal21 to your friends list Get a Link to this Reply

Quote:
Ohio does not tax shipping. Ebay taxes shipping. So in effect you are, in the original scenerio paying a 14 percent tax. It just does not get any simpler than that. Cripes, I've got a degree in mathmatics...not that you need one to see this.


No you're not. By your logic then if you have three items you're paying 21% tax. You don't add sales tax together.

14% of 40 would be 5.60.

What you are missing is that in both cases your pre-tax total is 40, there is no circumstance where your total is only $20 which is what used in your example.

When only the item or only shipping is taxed you're paying less than 7% on the total cost, when both are taxed you're paying 7%.

In no world is 2.80 for a total of 42.80 14%. It's 7% of your total cost.
Edited by basebal21
09/18/2019 01:10 am
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 Posted 09/18/2019  6:29 pm  Show Profile   Bookmark this reply Add BStrauss3 to your friends list Get a Link to this Reply
Depdending on STATE LAW, there are four scenarios...

/1/ S&H is taxable

Sale price is $20, s/h is $20, tax is 7% of $40 or $2.80, total cost $42.80

/2/ S&H is NOT taxable

Sale price is $20, s/h is $20, tax is 7% of $20 or $1.40, total cost $41.40

/3/ S&H is taxable, the item purchased is not taxable

Sale price is $20, s/h is $20, tax is 7% of $20 or $1.40, total cost $41.40

/4/ Neither S&H or the item purchased is taxable

Sale price is $20, s/h is $20, tax is $0.00, total cost is $40


-----Burton
45 year / Life ANA member (joined 12/1/1973)
Life member: Numismatics International, CONECA
Member: TNA, FtWCC, NETCC
Owned by four cats and a wife of 35 years (joined 1983)
Edited by BStrauss3
09/18/2019 6:31 pm
Valued Member
United States
143 Posts
 Posted 10/02/2019  2:33 pm  Show Profile   Check 3193zd's eBay Listings Bookmark this reply Add 3193zd to your friends list Get a Link to this Reply
Here is ebays new policy posted today.

Upcoming changes to eBay tax collection.

In 2018, PayPal and eBay worked together to implement a solution to comply with laws that require eBay to collect and remit tax on applicable transactions. Those transactions that require eBay to collect tax are currently divided into two separate charges - one for the item purchased and another for the associated tax.

Effective November 2019, PayPal and eBay will change the way these transactions are processed and how taxes are collected and remitted.

For transactions that require eBay to collect tax from buyers, the tax amount will be included in the gross purchase amount to be processed. Once settled, the tax amount will be automatically deducted for remittance to the applicable taxing authority.

You do not need to take any action.
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