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Ebay Collecting Sales Tax On Shipping Charges To Oklahoma

 
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Posted 01/28/2022   3:51 pm  Show Profile Bookmark this topic Add DonSellos to your friends list Get a Link to this Message
I buy covers frequently on eBay and in early January I noticed that the invoices of some sellers include shipping charges in the subtotal of the sale and then sales tax computed on that subtotal. This practice results in a tax overcharge as Oklahoma does not collect sales tax on shipping charges.

I have complained to sellers, to eBay, and to the Oklahoma Tax Commission about this with agreement of my position from eBay and the Oklahoma Tax Commission, but no action to correct the practice. Sellers tell me they have no way to change their invoices as they are generated by eBay.

Does anyone have a contact at eBay that might get some action? So far my complain has been to eBay's customer service.

Have other buyers who reside in Oklahoma noticed this practice?

Sellos

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Posted 01/28/2022   10:42 pm  Show Profile Check revenuecollector's eBay Listings Bookmark this reply Add revenuecollector to your friends list  Get a Link to this Reply
There have been numerous complaints about eBay charging sales tax on shipping charges for states where it would not be taxed. To date, the complaints have fallen on deaf ears. eBay doesn't care... in the same way that for the longest time eBay collected sales tax for coins and bullion in states where it is nontaxable. It can still happen if the item wasn't listed in the coins categories.
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Posted 01/28/2022   11:31 pm  Show Profile Bookmark this reply Add Timm to your friends list  Get a Link to this Reply
Do I smell a big nasty law suit for...
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Posted 01/29/2022   09:17 am  Show Profile Check eyeonwall's eBay Listings Bookmark this reply Add eyeonwall to your friends list  Get a Link to this Reply
I think they may be collecting sale tax on postage sales (face or below) when it isn't taxable (at least in the states I am familiar with).

So is eBay remitting this excess sales tax to the states or retaining it fir themselves?
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Posted 01/29/2022   11:49 am  Show Profile Bookmark this reply Add DonSellos to your friends list  Get a Link to this Reply

Quote:
Do I smell a big nasty law suit for.


Probably not unless there is an attorney/collector who is interested in doing some pro bono work for a substantial percentage of a settlement.

I find eBay's cavalier attitude about this issue annoying at best. I understand that the sales tax laws are a wild mixture of rates depending upon where a buyer lives, but still the practice of collecting more than what is due just because it is a difficult task is unacceptable.

While I don't know if eBay profits from being the facilitator for collecting sales taxes for fifty different states, I find it difficult to believe that eBay does this as a public service without any compensation.

While my excess taxes on shipping charges usually are counted in pennies, the total from across the broad range of eBay merchandise categories must amount to hundreds of thousands of dollars.

I guess my only recourse is to pay the excess taxes and continue my complaints to eBay, to the Oklahoma Tax Commission, and add my state senator and representative in Oklahoma's legislature to the list.

It seems that the quickest solution might be to correct the invoice practices of listing shipping charges in the sale price subtotal. If shipping charges are placed on an invoice AFTER the sales tax is computed there is no problem. The invoices from some sellers do just that and there is no overcharge.

DonSellos
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Posted 01/30/2022   4:00 pm  Show Profile Bookmark this reply Add mootermutt987 to your friends list  Get a Link to this Reply
I would expect that whoever takes this to court would win against eBay, no sweat. The problem is that it is simply not worth it to anyone to do so.

To those willing to do a little work (ie: not me), contacting your state's Attorney General's Office may get some results. I suspect eBay will continue this practice for as long as lawsuits cost them less than the research and re-programming required by them. Hopefully, correcting this is on their 'To Do List'. A letter or two from various Attorneys General would cause them to move it up on their priority list. AGs may not be too motivated to take any action - their action would only result in less $$$ going into their state's coffers. ASSUMING eBay sends this money to the state.
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Posted 01/30/2022   7:22 pm  Show Profile Bookmark this reply Add cjpalermo1964 to your friends list  Get a Link to this Reply
The issue is tailor made for any of many law firms that specialize in consumer plaintiffs' class actions on a contingent fee basis. Cotchett Pitre & McCarthy LLP in the SF Bay Area is an example and the OP should consider giving them a call.
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Edited by cjpalermo1964 - 01/30/2022 7:22 pm
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Posted 04/03/2022   11:45 am  Show Profile Bookmark this reply Add DonSellos to your friends list  Get a Link to this Reply
A FYI reply.

After many complaints to eBay and to the Oklahoma Tax Commission, I believe that eBay has finally corrected its invoicing for Oklahoma buyers and is now collecting sales tax only on the sale price of the item, not the sales price plus shipping.

DonSellos

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Posted 04/03/2022   1:39 pm  Show Profile Check docgfd's eBay Listings Bookmark this reply Add docgfd to your friends list  Get a Link to this Reply
Don ~ Do those residents who were overcharged by eBay since day-one of their collecting sales tax have any recourse? It seems like some harm was done to buyers, especially those that made a lot of purchases.
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Posted 04/04/2022   12:00 pm  Show Profile Bookmark this reply Add DonSellos to your friends list  Get a Link to this Reply

Quote:
Do those residents who were overcharged by eBay since day-one of their collecting sales tax have any recourse? It seems like some harm was done to buyers, especially those that made a lot of purchases


Hi docgfd:

I certainly know that eBay was overcharging me and I assume other Oklahoman buyers were overcharged too. How much or for how long I don't know. I only recognized the overcharges in January 2022 when I looked at one of my invoices more closely. eBay's tax collecting agreement dates back to 2019.

I did get a few refunds from eBay, but they did not go back earlier than January of this year. Unless a buyer kept his/her invoices of purchases there is little to base a claim upon. I think overcharges in the past are just "gone."

My experience is that most buyers don't seem to care. I announced the overcharges at my local stamp club and asked anyone buying on eBay to check their tax charges on eBay invoices. The response from club members was "Oh well, its just a few cents."

The Oklahoma Tax Commission, while not quick in taking action, did respond positively and its response was probably more helpful than any of my complaints to eBay. I did ask the Commission if I could deduct unrefunded overcharges on my state tax return if I had invoices to prove the overcharges. I got no response to that question.

I don't know how widespread the overcharges are/were, but my internet research indicated there are seventeen states that don't collect sales tax on shipping charges. I suspect Oklahoman purchasers were not the only ones overcharged on the collection of state sales taxes.

Unfortunately, I am not a strong crusader and I don't intent to take this issue beyond my own case. I assume eBay has fixed the invoicing of other Oklahoma buyers too. However, if I lived in one of the other states that don't collect sales taxes on shipping charges I would be checking the computations on my eBay invoices.

Don Sellos
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Edited by DonSellos - 04/04/2022 12:01 pm
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