@gwrocen wrote:
Would like to know why we have to pay a seller fee to PayPal for money
that is not part of OUR sales transaction?
Anyone else notice this?
PayPal charged the commission on the tax
collected by eBay for the state of Nebraska and added it into my total fee.
Commission is 3.7 % plus 30 cents.
Purchase $19.99
Shipping $9.50
Tax $2.06
Purchase total $31.55
Fee -negative $1.47
Tax collected by eBay -negative $2.06
Total $28.02
I have just reviewed the User Agreement with PayPal and here is the #1 clause:
You are independently responsible for complying with all applicable laws in all of your actions related to your use of PayPal's services, regardless of the purpose of the use. In addition, you must adhere to the terms of this Acceptable Use Policy.
Prohibited Activities
You may not use the PayPal service for activities that:
- violate any law, statute, ordinance or regulation.
Having a state tax “flow through my PayPal account” is illegal and violates the law because we do not have a tax number that allows us to "collect a tax from a buyer" for any state or province.
On the face of it, it looks like I am collecting the tax when it appears in the "purchase total" in my PayPal account. How do I explain this to my accountant? I would say that we are NOT legally entitled or authorized to collect this tax (without a tax number) for anybody else (ex. eBay) just because they say so. And especially since we do not have a "physical presence" in that jurisdiction. (see below)
As another member stated " even having the tax in our account for a nanosecond" is illegal.
The buyer in the above example owed me US$29.49.
Why is the purchase total showing up as US$31.55?
I am not entitled or authorized to receive that $2.06 extra and
I should not have to pay any PayPal fees on it.
Why is this illegal use being forced on me as an eBay seller?
Maybe I am interpreting this PayPal clause incorrectly. What do you think? .......................................................................................................................................
Here is some information from Google on the internet re US States and sales tax.....................
Is it illegal to not charge sales tax?
There is no sales tax obligation for the retailer if it has not established nexus in a state.
However, if a retailer does collect sales tax in a state in which it is not registered to do so,
that constitutes an illegal activity.
Do individuals need to collect sales tax?
The use tax is generally not the seller's responsibility; in most cases is supposed be declared
and filed by the purchaser in his or her home state. As a business, you are not usually required
to collect sales tax from individuals who purchase items from another state,
unless you have a physical presence in that state.
Should you charge sales tax?
If your business has a physical presence in a state (also known as a “nexus”),
whether it's a store, office, warehouse, employees, or other criteria established by your state,
then you MUST collect sales tax from customers in that state.
Do online sellers have to collect sales tax?
The basic rule for collecting sales tax from online sales is:
If your business has a physical presence, or “nexus”, in a state,
you must collect applicable sales taxes from online customers in that state.
If you do not have a physical presence, you generally do not have to collect sales tax for online sales.
Do I have to charge tax if I sell online?
The basic rule for collecting sales tax from online sales is: If your business has a physical presence, or “nexus”, in a state, you must collect applicable sales taxes from online customers in that state. If you do not have a physical presence, you generally do not have to collect sales tax for online sales.
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