OT: Did you know that Paypal includes the sales tax when calculating their fees?

[Buythatcard]

I went to look at my Paypal account tonight to check a recent transaction. I looked at the breakdown to see how PP was calculating their fees. I was shocked to see that they include the sales tax as part of their calculation.

Does this sound strange or am I overreacting?

See the example below.

PP charges. 2.9% plus .30.

So, they took 2.9% of the total amount including the sales tax and then added their .30 per transaction.

When will the madness end?

[bcbgcbrcb]

You’re right. This is exactly how I have felt about eBay and pay pal collecting fees on shipping charges for a very long time now. I gave up that argument long ago.

[egbeachley]

PayPal charges their fees based on the amount transferred. Was the sales tax part of the amount that was transferred?

Should they not fulfill the sales tax transfer and allow you to make a separate payment to the State Taxing Authority?

[Buythatcard]

I just don't understand how this can even be legal. They are collecting the sales tax which is then turned over to the appropriate State. Yet, they are charging the seller a fee on something that the seller never sees.

These straws are starting to get very heavy on my camels back.

[Republicaninmass]

Class action suit. Where's that ambulance chaser when we need him?

[Buythatcard]

Originally Posted by egbeachley

PayPal charges their fees based on the amount transferred. Was the sales tax part of the amount that was transferred?

Should they not fulfill the sales tax transfer and allow you to make a separate payment to the State Taxing Authority?

They do not allow you to make a separate payment to the State Taxing Authority. That would be a nightmare for the Seller.

[Fballguy]

Originally Posted by egbeachley

PayPal charges their fees based on the amount transferred. Was the sales tax part of the amount that was transferred?

Should they not fulfill the sales tax transfer and allow you to make a separate payment to the State Taxing Authority?

We already paid the sales tax to eBay...Why would there be another sales tax for being paid? <<< Redacted

Nevermind...I misread the OP. But if you're going to be upset about the pennies being added to your fee by the sales tax...You should really be PO'd that their calculating your fee on the gross amount when you're only netting 90% of the sale price.

[savedfrommyspokes]

This change was announced months ago....I have been collecting sales tax and remitting in my home state for years and all the while PP has been charging that same 2.9% on the sales tax that I collected. So, this is not a surprise. Obviously, with nearly 30 states now in play that have their sales tax collected via ebay, the cost of paying this fee has increased 25x (or more). However, based on my average transaction amount and the percent of transactions that I am now covering this extra 2.9% cost on, it will cost me on average of 3 cents additional per payment.

I raised my s/h cost by 5 cents.

I reason that this extra PP fee will cover cost of someone other than me having to handle the remitting all of these sales taxes collected to all of these different states/municipalities.

[D. Bergin]

Death by a thousand cuts. Paypal also stopped refunding your fees when you refund a customer for almost any reason whatsoever.

I switched from a traditional merchant account over to a full service Paypal merchant account years ago because the Paypal fees were much more straight forward and less onerous for a smaller business such as myself.

Paypal slowly gravitating towards the torture by additional fees business model.

Ebay Managed Payments not any better (likely much worse), so you just have to swallow the pill and hope you're not just living in a simulation for the rest of your business life.

[rjackson44]

stick to b.s.t

[sb1]

FYI Ebay also adds the shipping before calculating the sales tax...so you pay sales tax on the shipping as well.

[MikeGarcia]

Originally Posted by sb1

FYI Ebay also adds the shipping before calculating the sales tax...so you pay sales tax on the shipping as well.

..So if I offer ''free shipping'' as a seller , but sneak in an extra $3 or $4 onto my BIN price, am I guilty somehow of tax evasion ? Seems like a wash.....how long until 'free shipping' becomes illegal.?
..

[sb1]

No...it's the total of sales price and shipping, so whatever the total is, is the amount they add for and collect on the sales tax.

[Exhibitman]

[pingman59]

Originally Posted by Buythatcard

I just don't understand how this can even be legal. They are collecting the sales tax which is then turned over to the appropriate State. Yet, they are charging the seller a fee on something that the seller never sees.

These straws are starting to get very heavy on my camels back.

AMEN brother!

[Fuddjcal]

Originally Posted by bcbgcbrcb

You’re right. This is exactly how I have felt about eBay and pay pal collecting fees on shipping charges for a very long time now. I gave up that argument long ago.

in MY world, the real business world...taxing transportation or SHIPPING is ILLEGAL!

Reason# 158 never to buy from these crooked F's again PERIOD

[buymycards]

Chuck, I don't know where you live, but I live in Wisconsin and delivery charges and shipping charges are subject to sales tax.

5) Delivery Charges
When a retailer sells taxable products or services which are subject to tax and the retailer charges the
purchaser for the delivery, the retailer's total charge, including the delivery charge, is taxable. It is
immaterial whether delivery is made by the seller's vehicle, a common or contract carrier, or the United
States Postal Service.
The correct state tax computation to be shown on an invoice when the retailer charges the purchaser for
delivery of the product is shown in the following example:
Merchandise $ 100.00
Delivery Charge 10.00
Subtotal $ 110.00
Tax ($110 x 5%) 5.50
Total $ 115.50

[egbeachley]

Originally Posted by Buythatcard

I just don't understand how this can even be legal. They are collecting the sales tax which is then turned over to the appropriate State. Yet, they are charging the seller a fee on something that the seller never sees.

These straws are starting to get very heavy on my camels back.

I still think that is way better than not being charged a fee for the tax, receiving the tax, then sending the tax to the state every month.

[rdwyer]

I thought that you didn't have to pay taxes on something you're selling, when you already paid taxes on that item to begin with. (?)

[CurtisFlood]

I think my last ebay transaction was around 2006. Last year I did a lot of ebay was around 2002. I don't miss feebay or paypay.

[Fuddjcal]

Originally Posted by buymycards

Chuck, I don't know where you live, but I live in Wisconsin and delivery charges and shipping charges are subject to sales tax.

5) Delivery Charges
When a retailer sells taxable products or services which are subject to tax and the retailer charges the
purchaser for the delivery, the retailer's total charge, including the delivery charge, is taxable. It is
immaterial whether delivery is made by the seller's vehicle, a common or contract carrier, or the United
States Postal Service.
The correct state tax computation to be shown on an invoice when the retailer charges the purchaser for
delivery of the product is shown in the following example:
Merchandise $ 100.00
Delivery Charge 10.00
Subtotal $ 110.00
Tax ($110 x 5%) 5.50
Total $ 115.50

We would only tax the Merchandise here in CA. At least that's the way I see it here.

Amazon taxes their prime memberships too, which I'm dumbfounded about.
The taxes never stop. Lets just keep creating more more more. You wonder why there are so many homeless. They can''t afford to pay their taxes.

[Ben Yourg]

In Florida the sales tax is not on the shipping.Shipping
is not extra profit,for the merchant.
He does not keep it. He just collects it,for the state?

[buymycards]

I think the problem is similar to what happened on eBay. People were trying to sell a $40 card for $1 plus $39 shipping to avoid the eBay and PayPal fees. The people who were trying to game the system ended up making things difficult for everyone.

[egbeachley]

Originally Posted by rdwyer

I thought that you didn't have to pay taxes on something you're selling, when you already paid taxes on that item to begin with. (?)

I’m referring to the seller collecting tax on a sale, sent by the buyer, that needs to be remitted to the State.

Seems much simpler to let PayPal collect the 2.9% fee on that tax and then do the remitting for you.