Changes to the way eBay-collected taxes are processed

eBay recently announced changes to the way taxes are processed in situations where eBay collects and remits taxes on behalf of sellers. eBay is responsible for collecting and remitting internet sales tax (IST) for many US states and also collects and remits goods and services taxes (GST) in Australia and New Zealand

The following changes take effect in November 2019:

  • In situations where eBay is required to collect taxes (IST or GST) from buyers, order totals sent for processing will reflect the gross order amount inclusive of tax.
  • Once settled, the tax amount will be automatically deducted for remittance to the applicable taxing authority.
  • A record of the sales tax portion of the order will be available on the Seller Hub Order details page and through our Download order report.
NOTE These changes do not apply to sellers who are opted into managed payments on eBay. The eBay Collect & Remit Tax processing is not changing for sellers in the managed payments program.

There are corresponding API changes to address this new behavior. The changes apply to the following API calls and reports that return order/transaction information:

  • Trading API calls (please see release notes for details)
    • GetOrders
    • GetOrderTransactions
    • GetItemTransactions
    • GetSellerTransactions
NOTE GetAccount in the Trading API has been updated to account for the eBay Collect and Remit tax that is distributed to the seller's account by PayPal, and then pulled from the account by PayPal for eBay to send to the appropriate tax authority. See the Trading API release notes for additional information.
  • Fulfillment API calls (please see release notes for details)(
    • getOrder
    • getOrders

Here’s what’s changing in the API for eBay Collect & Remit situations where the seller is NOT opted into managed payments:

  • eBay-collected tax will be included in the following fields:
    • Order.Total
    • Order.AmountPaid
    • Transaction.AmountPaid
    • Transaction.ConvertedAmountPaid
  • eBay-collected tax will appear in both Taxes and eBayCollectAndRemitTaxes containers. (For sellers opted into eBay managed payments, the eBay-collected tax amount appears in the eBayCollectAndRemitTaxes container only.)

The following sample response for the GetOrders call in the Trading API illustrates the changes that take effect in November. The other order/transaction calls will present the information similarly.

<GetOrdersResponse xmlns="urn:ebay:apis:eBLBaseComponents">
   <Timestamp>2019-10-141T16:40:12.361Z</Timestamp>
   <Ack>Success</Ack>
   <Version>1127</Version>
   <Build>E1127_CORE_APIXO_19083361_R1</Build>
   ...
   <OrderArray>
      <Order>
         <OrderID>26-00009-52302</OrderID>
         <OrderStatus>Completed</OrderStatus>
         <AdjustmentAmount currencyID="USD">0.0</AdjustmentAmount>
         <AmountPaid currencyID="USD">17.6</AmountPaid>
         …
         <ShippingServiceSelected>
            <ShippingService>UPSWorldWideExpressPlus</ShippingService>
            <ShippingServiceCost currencyID="USD">11.0</ShippingServiceCost>
         </ShippingServiceSelected>
         <Subtotal currencyID="USD">5.0</Subtotal>
         <Total currencyID="USD">17.6</Total>
         <ExternalTransaction>
            <ExternalTransactionID>5194620985</ExternalTransactionID>
            <ExternalTransactionTime>2019-09-18T01:06:29.000Z</ExternalTransactionTime>
            <FeeOrCreditAmount currencyID="USD">0.0</FeeOrCreditAmount>
            <PaymentOrRefundAmount currencyID="USD">16.0</PaymentOrRefundAmount>
            <ExternalTransactionStatus>Succeeded</ExternalTransactionStatus>
         </ExternalTransaction>
         <eBayCollectAndRemitTax>true</eBayCollectAndRemitTax>
         <TransactionArray>
            <Transaction>
               …
               <Item>
                  <ItemID>1578649928</ItemID>
                  <Site>US</Site>
                  <Title>CCS-QE-TEST-ITEM-1375443523307-2</Title>
               </Item>
               <QuantityPurchased>1</QuantityPurchased>
               …
               <TransactionID>10669162012</TransactionID>
               <TransactionPrice currencyID="USD">5.0</TransactionPrice>
               <eBayCollectAndRemitTax>true</eBayCollectAndRemitTax>
               …
               <Taxes>
                  <TotalTaxAmount currencyID="USD">1.6</TotalTaxAmount>
                  <TaxDetails>
                     <Imposition>SalesTax</Imposition>
                     <TaxDescription>SalesTax</TaxDescription>
                     <TaxAmount currencyID="USD">1.6</TaxAmount>
                     <TaxOnSubtotalAmount currencyID="USD">0.5</TaxOnSubtotalAmount>
                     <TaxOnShippingAmount currencyID="USD">1.1</TaxOnShippingAmount>
                     <TaxOnHandlingAmount currencyID="USD">0.0</TaxOnHandlingAmount>
                     <CollectionMethod>NET</CollectionMethod>
                  </TaxDetails>
               </Taxes>
               <eBayCollectAndRemitTaxes>
                  <TotalTaxAmount currencyID="USD">1.6</TotalTaxAmount>
                  <TaxDetails>
                     <Imposition>GST</Imposition>
                     <TaxDescription>GST</TaxDescription>
                     <TaxAmount currencyID="USD">1.6</TaxAmount>
                     <CollectionMethod>NET</CollectionMethod>
                  </TaxDetails>
               </eBayCollectAndRemitTaxes>
               <ActualShippingCost currencyID="USD">11.0</ActualShippingCost>
               <ActualHandlingCost currencyID="USD">0.0</ActualHandlingCost>
               …
            </Transaction>
         </TransactionArray>
         <MonetaryDetails>
            <Payments>
               <Payment>
                  <PaymentStatus>Succeeded</PaymentStatus>
                  <Payer type="eBayUser">ppfop_e2e_us2</Payer>
                  <Payee type="eBayUser">pay20_neworder_hold_us_seller_1</Payee>
                  <PaymentTime>2019-09-18T01:06:29.000Z</PaymentTime>
                  <PaymentAmount currencyID="USD">16.0</PaymentAmount>
                  <ReferenceID type="ExternalTransactionID">5194620985</ReferenceID>
                  <FeeOrCreditAmount currencyID="USD">0.0</FeeOrCreditAmount>
               </Payment>
            </Payments>
         </MonetaryDetails>
         <SellerUserID>sample_us_seller44</SellerUserID>
         <SellerEIASToken>nY+sHZ2PrBmdj6w...GoDZKDqQWdj6x9nY+seQ==</SellerEIASToken>
         <CancelStatus>NotApplicable</CancelStatus>
         <ExtendedOrderID>26-00009-52302</ExtendedOrderID>
         <ContainseBayPlusTransaction>false</ContainseBayPlusTransaction>
      </Order>
   </OrderArray>
   …
</GetOrdersResponse>

From the example, you can see how taxes figure into the order total: $5.0 (subtotal or transaction amount) + $11.0 (shipping cost) + $1.6 (tax amount, which appears twice) = $17.6 (order total)

When PayPal deducts the sales tax from your account, the transaction is clearly identified as tax collected by eBay. In the event of a cancellation or return, eBay returns the sales tax (prorated for partial refunds) to the seller’s account.