GOOSE CREEK, S.C. (WCBD)– In October, Susan Selvey bought a new water heater on eBay for her Goose Creek home.
The Berkeley County resident said that when she received her invoice, she noticed a higher than normal sales tax.
“I looked at the total price and it was just too high” said Selvey. “I said, this isn’t right,” she added.
Selvey realized that she was taxed at the 9% rate of Charleston County, instead of Berkeley County’s 8% rate.
South Carolina has a statewide 6% sales tax, but individual counties can implement additional sales taxes.
This map provided by the South Carolina Department of Revenue shows the break down.
Selvey called eBay several times to report the problem.
“The agent with eBay agreed with me that yes, there had been an over taxation and said that it has to go to the internal team and that I would hear a response within 5 days. I didn’t,” Selvey said. “I waited a month then I called eBay again and got the exact same response,” she continued
After failing to get an explanation, she called the Count on 2 Investigators. eBay refunded Selvey the $10.27 overcharge, but she worries it could be happening to others.
“If 1,000 people buy on eBay every day, and every day they overtax, that is a lot of money that is being taken out of the pockets of South Carolina residents unfairly,” said Selvey.
The South Carolina Department of Revenue told News 2 that it is up to the retailer to collect the proper tax rate.
Ebay said Selevey’s case was a mix up because they didn’t have the closing 4 digits on the commonly used 5 digit zip code.
As a result of our Count on 2 Investigation, eBay said they will now review the full 9 digit zip code to calculate the proper sales tax for future buyers.
They provided a statement, which reads in part:
“We’re focused on ensuring our customers are as least burdened as possible by various Internet Sales Tax legislation. We’ve been working across the country to advocate as various state laws are put into place and we are committed to partnering with state legislators to enact fair legislation. We believe that it’s important that buyers and sellers are given time to understand new requirements that ultimately impact their online purchases and businesses.”Ashley Settle, eBay Corporate Communications
Selvey made a second online purchase with a different retailer to see if it was an isolated incident. She was also taxed 9% buying art supplies on www.DickBlick.com. Selvey said that she reported the problem and they promptly refunded her the difference, but she says she hopes others review their orders diligently.
Scott Peterson is the Vice President of U.S. Tax Policy and Government Relations for Avalara, a software company that automates tax compliance for retailers.
He said online sales make it more challenging for retailers to apply sales and use tax.
“Any retailer in any place of the world has to be able to account for the sales and the tax that they make anywhere in the United States which is a relatively complicated thing to do because of the differences in the states,” said Peterson.
Peterson said zip codes rarely provide enough information for retailers to apply the proper tax. Avalara’s software uses the customers’ latitude and longitude coordinates to identify their exact location and calculate the correct tax.
He urges customers to be vigilant as companies adjust to new compliance regulations.