Ebay seller scamming sales tax

Ebay sellers (mostly in Cali) have been automatically "collecting" sales taxes to items shipped out of state to other states that do not have a reciprocal sales tax collecting agreement with neighboring states. Several months back I complained to Ebay that Cali vendors were unfairly competing with honest sellers by adding that tales tax to their revenue.

Ebay must have lowered the boom on those sellers because now if the seller has their location listed as California I NEVER get sales tax added to my items being shipped to Florida at checkout.

However, some have found a "loophole" by "claiming" that they ship from "multiple locations" in the U.S. or "Ships from the U.S" which legally if they actually did have operations (like warehouses) in states that neighbor your state they can collect tax for your state.

So when I get sales tax added to my cart from these vendors before I pay, I ask them SPECIFICALLY which state(s) they ship from and I NEVER get a reply. So the scam goes on. So I go to another vendor with a close slightly higher listed price (which without sales tax added may be lower) that is listed in a State that I KNOW does not collect tax from Florida and buy from them. I just put it in my shopping basket and do NOT "buy it now". This way you can see if the seller is treating you and other sellers fairly.

Now all of this may be made moot at some point if the feds step in and make sales tax collection for EVERY state mandatory, but sellers may resist this, imagine keeping track of sales tax tables from every diddly squat local taxing authority?

When the sales tax laws change, I see vendors just using a sales tax app that will figure out the correct tax automatically. Accounting programs will adapt to sorting out the taxes collected. If everyone had to use printed tax tables and had to keep track manually, it would never get done. With computers to keep it straight it won't be too much of a problem.

Scott F said:

When the sales tax laws change, I see vendors just using a sales tax app that will figure out the correct tax automatically. Accounting programs will adapt to sorting out the taxes collected. If everyone had to use printed tax tables and had to keep track manually, it would never get done. With computers to keep it straight it won't be too much of a problem.

Click to expand...

I dare say that Ebay would go nuts trying to stay compliant with every taxing authority and I don't see a viable app that would be affordable to stay up to date... it wouldn't be as simple as coding a free flash light program. We will see. Anyway, till then crooked sellers are stealing money from users.

I don't know. If sales tax is required I don't think it is fair for on line sellers or someone buying on line to avoid it. But, I would not be happy if I were being charged for tax that isn't applicable.

To complicate things, in my state sales tax rates vary by city. Building and maintaining tax tables becomes more complicated as a result.

i stopped shopping ebay when they started to collect duty on international shipments automatically at checkout.plus there aren't very many deals on there anymore.it's all "buy it now".it's easier and cheaper to shop on amazon.ca,and free shipping with prime,which you need if you want to watch the grand tour.

Tax is theft.

It can depend on the item being purchased in some limited cases.

Not off of E-Bay but was ordering some fishing tackle items from a small custom maker/vendor located in a different state.

When I went to checkout I noticed I was being taxed on my purchase. Since I was in a different state I e-mailed the vendor questioning the tax being applied to my out of state order.

This being a very small vendor I knew for a fact that this company did not have an actual physical presence in my state which would also make the tax collection on the order a legitimate requirement.

The vendor replied it was a mandated Federal Excise Tax on all fishing lures and equipment on the manufacturers. They being a very small company just passed this tax on to the consumer rather than build it into the products price. I would guess this made book keeping easier for them as far as collected in this manner for all out of state sales made it much easier to calculate the payment they owed the government.

I had never heard of this so of course I searched the net and sure enough it was a valid Federal tax imposed on the manufacturer of the sales any fishing related gear on the manufacturer.

So it is possible depending on what you order and who you order from the tax is a legitimate item that the manufacturer/seller of such items is just passing their tax obligation to the FEDS on the products you ordered to you the consumer.

Sure on E-bay there are crooks who rip off customers by marking up shipping to crazy levels or would stoop low enough to pull a tax collection scam when no taxes were actually due.

But there are legitimate cases such as the one that I recently came across that is actually legit and I did complete the order.

Perhaps this company does use the method I suggested as an aid to track their Federal tax bill but to me they would be smarter to just add this tax into their price like every other manufacturer does that is subject to the same taxes and not have a potential customer even need to question whether they are being ripped off or not.

All the comments made here only go to prove how screwed up our sales tax system is. When I mention to people that VAT (Value Added Tax) or GST (Goods & Services Tax) is implemented in almost every other country in the world, peoples eyes glaze over, they start dribbling, and then come up with comments like 'that'll never work here' or 'we don't need any more taxes'.
Even accountants I know do not understand how VAT actually works. I've run businesses in the UK and Canada operating under this system, and believe me, it's very simple and it actually works, unlike the nonsense we have here.

Here's a simplified explanation.
All other sales tax is abolished. A federal tax is implemented and proceeds are shared out. Lets say, to make it easy @ 10%

Business A makes a product and sells it for $100 plus VAT @ 10% = $110, to business B
Business B resells it to Joe Bloe who does not have a business, so is not a registered VAT vendor, at $200 + VAT @$20 = $220

Business B's VAT tax return has 100 +10 VAT in purchases, and 200+20 in sales, so claims the purchases against the sales tax collected, and then remits the balance of $10 to the VAT office.
Joe Bloe has paid the sales tax. and all the businesses have not.
What this does is stop all those guys who are doing 'cash jobs' and avoiding the tax, (they can't claim the tax they paid on their purchases) stop people slipping over the border to avoid paying tax, stops businesses like Ebay who continually tout sales tax is evil and do not collect it. Stops overseas business from unfairly competing with American companies who have to collect the tax. China in particular subsidizes even the shipping to extract money from us, and they collect nothing in the way of tax. VAT is collected as the products cross the border.
I hate paying taxes, but it is a necessary evil. Our infrastructure needs this money desperately. Avoiding paying tax is like shooting yourself in the foot.
If VAT were introduced, the actual rate of tax could be reduced. I'd guess so much more revenue would be generated the rate could probably be halved, so no one would complain if they had to pay say 5% VAT. I believe most sales tax rates are in the 8-10% range currently.

VAT Tax inspectors can currently detect anomalies in Tax Returns quite easily, so falsifying these to defraud is very unwise.
Hope this helps.

I'm far from an expert and can only say this anecdotally, but I think the VAT's in Europe might be a lot higher than the sales tax rates we pay here. That aside, one thing I like about the VAT system is you pay what you see. If it says $10, then you give the guy $10 and take your stuff (of course it would be the local currency instead of $). Whether we use VAT or sales tax, it would be so much easier if the price shown included everything. It must seem odd to europeans visiting here. They fork over the $10 then are told they owe another 90 cents.

LDUBS said:

I'm far from an expert and can only say this anecdotally, but I think the VAT's in Europe might be a lot higher than the sales tax rates we pay here. That aside, one thing I like about the VAT system is you pay what you see. If it says $10, then you give the guy $10 and take your stuff (of course it would be the local currency instead of $). Whether we use VAT or sales tax, it would be so much easier if the price shown included everything. It must seem odd to Europeans visiting here. They fork over the $10 then are told they owe another 90 cents.

Click to expand...

Yes, the tax is higher, but their infrastructure isn't falling apart, unlike ours.
And the 'excluded tax' concept here is just a bad policy/mindset by retailers. AND it doesn't alter the fact that the USA system is screwed up.

I order very often from Ebay and have never come across this.I'm actually surprised that there are still such problems with re-buying and shipping. Somehow, I did not think that there could be so many problems in 2021 with the current level of development of all services. It's strange. I haven't had a delivery problem in 3 years. I found a delivery service that works for me, figured out how to track speedpak, and ordered everything online. I'm a fan of ordering stuff on eBay at night. It's a stress reliever. I think it's obviously better than smoking and alcohol.

Sales tax is a regressive tax. It also removes competitiion between vendors.

the hammer said:

Sales tax is a regressive tax. It also removes competitiion between vendors.

Click to expand...

I agree it is regressive. I'm not following how it impacts competition between vendors. I assume you mean price competition.

Just conceptional -- let's stay away from politics.

LDUBS said:

the hammer said:

Sales tax is a regressive tax. It also removes competitiion between vendors.

Click to expand...

I agree it is regressive. I'm not following how it impacts competition between vendors. I assume you mean price competition.

Just conceptional -- let's stay away from politics.

Click to expand...

Correct on both!

the hammer said:

LDUBS said:

the hammer said:

Sales tax is a regressive tax. It also removes competitiion between vendors.

Click to expand...

I agree it is regressive. I'm not following how it impacts competition between vendors. I assume you mean price competition.

Just conceptional -- let's stay away from politics.

Click to expand...

Correct on both!

Click to expand...

Still not following. Let's assume a 10% sales tax.

Vendor A offers a product at $1.00. End price to Joe Consumer is $1.10

Vendor B is highly efficient and offers a competitive price of $0.90. End price to Joe Consumer is $0.99.

How is price competition negatively impacted? I am missing something.

LDUBS said:

the hammer said:

LDUBS said:

I agree it is regressive. I'm not following how it impacts competition between vendors. I assume you mean price competition.

Just conceptional -- let's stay away from politics.

Click to expand...

Correct on both!

Click to expand...

Still not following. Let's assume a 10% sales tax.

Vendor A offers a product at $1.00. End price to Joe Consumer is $1.10

Vendor B is highly efficient and offers a competitive price of $0.90. End price to Joe Consumer is $0.99.

How is price competition negatively impacted? I am missing something.

Click to expand...

If vendor A were in an area where the sales tax was 10%, the cost to the consumer would be $1.10.
If the consumer was purchasing over the Internet BEFORE the unconstitutional Internet sales tax, the consumer would be saving 20 cents on the purchase.
It’s all about competition. Just like a one of those areas where states reduce sales tax rates to drive sales into urban areas.

the hammer said:

LDUBS said:

the hammer said:

Correct on both!

Click to expand...

Still not following. Let's assume a 10% sales tax.

Vendor A offers a product at $1.00. End price to Joe Consumer is $1.10

Vendor B is highly efficient and offers a competitive price of $0.90. End price to Joe Consumer is $0.99.

How is price competition negatively impacted? I am missing something.

Click to expand...

If vendor A were in an area where the sales tax was 10%, the cost to the consumer would be $1.10.
If the consumer was purchasing over the Internet BEFORE the unconstitutional Internet sales tax, the consumer would be saving 20 cents on the purchase.
It’s all about competition. Just like a one of those areas where states reduce sales tax rates to drive sales into urban areas.

Click to expand...

Thanks. Now I get the point -- tax free online vs brick & stick sales.

I don't buy enuf on eBay to be really up on the details of taxing, but what I really Do notice is the scam so many of them try to pull with shipping. One vendor might have a much lower price on an item than others selling the same thing.

Then, if you're watching, you might see he has shipping of $25.00 or some such, while another with a higher starting price might have shipping of $5.00, making his product actually less expensive.

Just for fun, try shopping for AA batteries one time. Migawd.

gogittum said:

I don't buy enuf on eBay to be really up on the details of taxing, but what I really Do notice is the scam so many of them try to pull with shipping. One vendor might have a much lower price on an item than others selling the same thing.

Then, if you're watching, you might see he has shipping of $25.00 or some such, while another with a higher starting price might have shipping of $5.00, making his product actually less expensive.

Just for fun, try shopping for AA batteries one time. Migawd.

Click to expand...

I saw that some guy is selling a refurbished AAA battery for $1,000. Free shipping. :LOL2:

I'm not quite sure about the taxes. But I think that any outdoors products, the sales tax is not a general fund tax. At least in Ohio. I could be totally wrong about this. However collecting taxes on fishing and hunting, along with what is considered in the tax codes is to support the outdoors industry. With that said, I'm not sure about federal taxes. My purchases have only been taxed by state.
I agree with you on the reciprocating state taxes.
One inquiry about this gave me an answer that the item is shipped from the manufacturer or the distribution center nearest to me. Which is why they are charging taxes. I believe it is a scam by using loopholes in the tax system itself.