NOT HOT: EB Charges Sales Tax on shipping

R

rukasu

CAGiversary!
I was thinking there might be a better place for this topic, but considering that this forum is where we look to evaluate where to get deals, this seemed appropriate. And I apologize if this has been discussed before, but I didn't find it in my searches.

EBGames.com charges sales tax on shipping. Put some items in your cart, proceed to checkout, and if EB charges sales tax for your state (I'm in California, so they do) then play with the "Choose a shipping method..." (One-day air, Two-day air, EB Saver, etc) drop-down and watch the sales tax adjust itself accordingly.

Now, sure it's "just a few cents" maybe, but consider in California here are examples of how much extra we're paying:
EB Saver: $3.49 = 27cents "sales tax"
Two-Day Air: $7.99 = 62cents "sales tax"
One-Day Air: $10.99 = 85cents "sales tax"

Multiply this by the volume of orders. For every 100,000 orders EB processes in California, this equates to an extra $2700 - $8500 that EB gets free and clear from us.

I learned this by returning items to an EB store where they refunded the cost of my items purchased with the sales tax attached. I should've been out $3.49 as a result, but I was out $3.49 in addition to the "sales tax" on the $3.49. And this was over a year ago. They're still doing it, and I figured it's about time I said something.

Does this scream class-action? I mean, you can't legally charge sales tax on shipping, can you? If you can, then never mind.
 
Nobody here probably knows they charge tax because you can buy a genesis or psx game for $.99 use SAVER and CAG15 and end up getting shipping for $.85 and a crappy game......... I just got Taz escape from Mars this morning for $1.70. :applause:
 
I noticed this before as well. But I just figured they were allowed to do it.

Since I use SAVER 95% of the time, it doesn't affect me much, which is why I haven't given it much thought. I only ever pay shipping on preorders, and even then I use the cheapest option. So over the course of a year, I doubt they wriggle an extra buck out of me. Probably less than half that (I rarely preorder from the site).

But it's an interesting question: can they legally do this? This is probably the wrong forum, but it's an interesting question nonetheless. I'm glad you brought it up.
 
My understanding is that taxing shipping is a state-by-state decision and that shipping is taxable in California, Colorado, Florida, Georgia, Illinois, Maryland, New York, Ohio, Texas, and Virginia.
 
[quote name='D. Monic']I noticed this before as well. But I just figured they were allowed to do it.

Since I use SAVER 95% of the time, it doesn't affect me much, which is why I haven't given it much thought. I only ever pay shipping on preorders, and even then I use the cheapest option. So over the course of a year, I doubt they wriggle an extra buck out of me. Probably less than half that (I rarely preorder from the site).

But it's an interesting question: can they legally do this? This is probably the wrong forum, but it's an interesting question nonetheless. I'm glad you brought it up.[/QUOTE]

No, you can't legally charge sales tax on a shipping service, or any service for that matter, in Michigan. Other states may be a different story.

Although, our governor would love to change this to allow for a new, fresh source of revenue.
 
[quote name='Scorch']Read much?[/QUOTE]
Read much indeed. You can still use EB Saver shipping without the SAVER code. It just costs $3.49 (I think) insted of free.

EDIT: I was wrong. It's actually $2.49 without the code.
 
Ohio recently passed a law where you have to charge tax on shipping costs. I would assume other states have the same laws in affect.
 
it's a state-by-state thing, but many online and mail order businesses still absorb that cost generally except for the state they do business from. it's why i usually end up doing the gamestop.com route if i had to choose between the two as they don't charge tax for my state (yet).

i guess eb is so huge or they have enough regular customers online that they don't care if they lose customers to B&M or other online storefronts by charging shipping, and sales tax, AND tax on shipping.
 
[quote name='bmulligan']No, you can't legally charge sales tax on a shipping service, or any service for that matter, in Michigan. Other states may be a different story.

Although, our governor would love to change this to allow for a new, fresh source of revenue.[/QUOTE]
Well, looking at my two preorders for the year, Trauma Center and Guitar Hero due to the brief price mistakes on both, I can confirm that I was taxed on shipping expenses both times.

I live in Michigan and work in Indiana, and tend to have items shipped to either place depending on the circumstances. Trauma Center was sent to my home in Michigan. Guitar Hero was sent to my workplace in Indiana. And both times, my billing address was my home in Michigan (not sure if that matters but figured I'd mention it).

So I got charged tax on shipping regardless of which I state I shipped to. Not exactly sure what to make of that.

Edit: Maybe the law is based on where a) the corporation is located, or b) where the item is shipped from. Perhaps it has nothing to do with where the item is shipped to.
 
I believe that there are also some places where if it is "shipping" they aren't supposed to charge, but if it says "shipping and handling" they can, because it's assumed you are paying for something physical in that such as a box.
 
I think they should rename "sales tax" to something like "tax". People like me, expect to get taxed on tangible items, not services.

I recently got married, and not only did I get taxed on every plate of food, I got taxed for the service, for opening wine bottles, for cutting the cake, for pouring drinks (that were already taxed), for setting up the dance floor, etc.

I paid hundreds of dollar in 'sales' taxes, although no item were sold to me, just services ;(
 
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