Ebay Charging Tax On Shipping In State Were It Is Not Supposed To.

I have noticed for well over a year (as far back as Dec. 2021) ebay has (what at first appeared randomly) charging sales tax on shipping. I live in a State (Mass.) where it is clear they do not charge sales tax for shipping.

The reason I am posting this on here is because after further scrutiny, it appears they are only charging the tax in the "Stamps Category". My few purchases from other categories the shipping was not taxed.

Foreign purchases seem to go either way, haven't figured out a pattern.

Below is a list of States that I found online that don't charge tax on shipping.

States that don't charge tax on shipping --- Alabama, Arizona, Colorado, Idaho, Indiana, Iowa, Louisiana, Maine, Maryland, Massachusetts, Nevada, Virginia and Wyoming.

Three States that appear not to charge tax on shipping, but have exceptions --- California, Illinois and Minnesota.

I'm just wondering how widespread this might be if some members from the above states could check their transactions.

Unfortunately ebay does not make it easy to check, as far as I could tell, you have to check one transaction at a time and go into payment details .

mike2006

Add Oklahoma to the list of states that do not collect tax on shipping charges. A year ago, I complained steadily about every shipping charge that ebay charged tax on. My thread on this topic is below in this forum somewhere. I also sought help from the Oklahoma Tax Commission which supported my complaint mildly. For a period of about three months, ebay stopped charging sales tax on the shipping charges of my philatelic purchases, then it reverted to its old ways (probably a new employee took over ebay tax collections). I again complained to the state tax commission, who again promised to help, but so far has not done so. I have currently stopped complaining about it and just pay the added taxes.

The practice still annoys me greatly and I am heartened to see that another stamp collector has noticed the same erroneous taxing of shipping charges. I need to contact my state house and senate representatives for help, but age and poorer health have lowered my resistance and I no longer have the energy to continue the fight.

I did not realize that ebay may not be charging taxes on non-philatelic purchases which probably would have much higher shipping costs and more taxes. If that is the case, the practice of taxing shipping costs of philatelic items is doubly irksome.

Part of the problem is that we lack support from other sectors in philately. The few ebay sellers I have contacted about the problem show no interest. It doesn't affect them. I doubt if the philatelic press or philatelic organizations know about the practice either and would not be willing to enter the fight, It doesn't affect them either.

Mike, please let us know of what measures you have taken to combat the problem. Feel free to use the SCF's private messaging to contact me if you prefer. Also, if ebay buyers in the other states you mention have experience taxation on shipping charges, I hope they will give us their perspectives on the issue. A concerted effort from a number of different state buyers might make a difference.

Thanks.

DonSellos

I suggest you solve this the old-fashioned way: civil litigation. The 'bay being a fat, juicy class action target, I expect Joe Cotchett or Elizabeth Cabraser would be interested.

Don, thanks for the detailed reply. I have not had a chance to search for your previous thread on this topic, so this is just a reply to your above comment.

"Mike, please let us know of what measures you have taken to combat the problem."

As of now I haven't done anything, besides posting on this forum.

I was trying to find out if this is widespread, or just possibly a bug that is only happening to a small number of ebay buyers. Still too early to tell, but so far it does not appear to be very widespread, or maybe people just don't care because individually it is not a lot of money. Although for ebay it could easily add up very quickly from the 9.4% fee on the tax on shipping. This costs more for both the buyers and sellers.

When I first noticed it I thought it was happening randomly to all the transactions. It was just recently that I decided to print the details of about 25 transactions, that is when I noticed the 3 transactions that were not taxed, were not in the stamps category.

For me it is not so much the money, but the principle, I just hate the idea of giving more than necessary to ebay or the tax man, it just aggravates me.

If I am correct, and it is only happening in the stamps category, then it will be much harder to get it corrected. Don, as you said, it would take a lot more than just a couple of complaint to ebay or the State Attorney General or tax agencies, to get something done about it.

Hopefully more will post either way, taxed, not taxed, taxed stamp category only, taxed all categories.

It might be a wider issue. I wonder if either ebay's coding is wrong, or ebay uses a default setting that sellers forget to adjust.

Two weeks ago, I found that ebay charged 9% VAT on stamp orders from one seller in the UK and 21% on stamp orders from another. The first of those had stamps offered as 'buy now' and others auctioned. There was no VAT charged on the 'buy now' items. However, 'buy now' stamp orders from other UK sellers attracted a 9% VAT charge.

I wondered if this had anything to do with EU regulations. If so, no VAT is due in the UK. I think I am seeing the VAT charge because I am living outside the UK. But the interesting part is that import duties are levied on a recipient's share of the postage. This, exactly, is the part not taxed. I do not know if ebay determines these charges, or the seller does (or fails to do so). But ebay and taxes are somewhat of a lottery here as well.

This is VAT charge started to be charged last year.

I live in WA state and they do not charge sales tax on bullion purchases - gold or silver, ingots or coins that are being sold as a function of 'melt', etc. Ever since they (and Amazon) started collecting sales tax on things I buy, it has been on every type of product imaginable, including stamps (which are probably my #1 product purchased). About a week ago, I bought a graded, encapsulated coin - A Walking Liberty Half Dollar, graded by PCGS at MS65. This is, by anyone's measure, a collector coin. It is priced based on the coin collectors' market, NOT by melt value. Although it is silver, it is NOT considered bullion. Imagine my surprise when I was not charged sales tax! Admittedly, when silver goes up (or down) in price, all coins tend to be affected by that movement - even nickels and pennies, although to a lesser degree.

I am not a lawyer, so I don't know the intricacies of the law in WA state concerning this issue. HOWEVER, it seems to me that there should be 2 tiers of coins/metals/medals/ingots. One tier being that the items are being bought primarily as a metal (buying a sack of pre-1964 dimes/quarters/halves/dollars is a GREAT way to get into the silver market) and another tier being collector coins - coins whose value is more based upon collector demand than on melt value. I just find it hard to believe that their is an entire 'industry' that is exempt from sales taxation at the retail level. I suspect coin values are a 'rainbow' rather than a 'dipole' - you can spend anywhere from melt value, up to $1000's for a, say, 1944 Walking Liberty Half, all depending on the grade. The ends of the rainbow (very high grade vs very low grade) are easy to differentiate whether they are simply metal, or collector items, but somewhere slightly above melt value, there is a very gray area. Is this being bought as a lump of silver, or is this going in a collection? And so, I theorize that the lack of sales tax by ebay on a high-grade silver coin is based on that lack of a 'hard line' between melt and collector value. If I were to go down to the coin store in town, though, I believe I would be charged sales tax on the coin I bought on ebay.

ebay needs to re-vamp their philosophy on collecting sales taxes, based on state law and the EXACT type of material being sold. Whether the material is a1944 WLH in Good condition (in coin parlance, Good is actually NOT very good, such a coin is worth, today, on the order of $10), a 1944 WLH graded at MS65 (worth about $100), a stamp, a toilet, the shipping required for any of these products, or even the 'handling' (anything above and beyond postage and shipping materials I would think) of any of these products. Look, if they are going to differentiate some things, they need to look at it all. Yeah, TONS of work, but THAT'S not my problem.

My question, specific to the OP's Massachusetts issue, is what happens when ebay remits what they have collected to the State. Hard to believe that MA just sticks it in the "voluntary overpayment" pile.

I also assume that as per this:




SO, on the ebay invoices the shipping is clearly broken out separately?

I did find this bit of info:

NSK

" I wonder if either ebay's coding is wrong, or ebay uses a default setting that sellers forget to adjust."

I suppose it could be a bug in their coding, but whether their coding is wrong on purpose is anybody's guess.

Because it appears I am being charged tax on shipping on all of my stamp category purchases from US sellers, I would tend to think it is not anything to do with the sellers settings. But with all of the changes ebay makes in the backround, you never know.

As for other countries it seems hit or miss, my most recent purchase from the UK, did not charge tax on the shipping.

Rogdcam

"what happens when ebay remits what they have collected to the State"

I was wondering the exact same thing, although ebay clearly has the shipping charge listed separately, on the invoice they just put the total tax for the item plus shipping (which shouldn't be taxed).

So if they send the full amount, and don't break it down when sending the payment, then the state would probably not realize it is an over payment.

Now if the software program they use to send the tax payments, only correctly uses just the tax on the item and not the shipping, then that could be problem.