I bought an XBox gift card for Benjamin on eBay. I saved some money doing it that way instead of directly through Microsoft. Pretty sure it was NOT a scam, and the gift card worked as expected.

My issue? Tax.

I was charged California sales tax.

This is ILLEGAL, as far as I know. See this publication, pages 13 and 14.

Basically, California says that tax should NOT be collected at the time of a gift card purchase, but instead collected when the gift card is USED for a purchase. So, for example, if I buy a $25 gift card to McDonalds, there's no tax on it. However, when I go to McDonalds to buy food with it, the tax is charged at that time, and is subtracted from the gift card value.

That's how it works here.

Well, eBay charged me tax on this gift card anyway.

Why? Because California passed a law in 2019 requiring sales tax to be paid on all online merchandise purchases, regardless of whether or not it's being sold in another state.

eBay, in a sloppy attempt to comply with this law, forgot about the gift card situation, and just blanket-charges tax on everything, not realizing that certain sales in California are NOT taxed.

From pages 13 and 14 of that link:

What types of sales are included under gross sales?
The law requires that you report any sale of tangible personal property, whether or not you have been paid
for the property. Normally, payment for your sales will be in the form of money (such as cash and charge
sales). However, there may be times when you will receive other forms of payment (such as exchanges of
property), and the fair market value of those payments must be reported.

Do not include receipts for the following sales under total sales:
California Lottery sales (scratchers, lotto tickets, and so forth)
Money order service charges
Sales of gift certificates (see note on the next page)
Electronic waste (also known as eWaste) fee charges

As mentioned in the previous chapter, you must report a sale for the tax reporting period in which it occurs,
even if you receive payment in a different period. For example, you may sell an item in June for $500 and
allow the customer to take possession of it immediately on credit. Since the customer took possession of the

Please note: Gift certificates. Although you do not include the sale of a gift certificate under your total sales,
you do report the sale that occurs when you accept the certificate for a taxable sale of merchandise or
property. The sale must be reported for the reporting period in which the certificate was redeemed.

Am I wrong here? I can't imagine I am. I think eBay has been fucking California consumers since 2019 on this.

Here's a discussion of the matter on an eBay forum: https://community.ebay.com/t5/Archiv...qaq-p/30310756

Would love to see a class action suit over this. I despise illegally collected taxes, no matter how small the amount.