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Sun Jan 12 2020 11:12:02

Business Buyer Baffled by eBay and PayPal Sales Tax Reporting

By: Reader

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Dear Ina,
I don't sell on eBay. I am strictly a buyer, using only PayPal. I purchase many, many things on eBay.

eBay does not have an option to download purchase history, so I must rely on the PayPal Reports for the information. 

When I downloaded my 2019 PayPal Transactions to determine how much I owed for Minnesota Use Tax, I was shocked to see how the taxes I paid on eBay purchases are being reported. This is going to take forever to get straightened out. Very frustrating! 

Up until November 2, 2019, PayPal had a separate row for sales tax paid on all eBay purchases. Just the tax amount on one row, with the description of "Sales Tax (1)" or "Tax collected by partner". It did not even associate the tax with the purchased product it applied to. The row below, I found out, is the purchase price and item description for which that tax applied to. 

After November 2, 2019, PayPal's reporting now just shows one total amount, which includes item price, shipping, discounts, and sales tax charged, all combined into one amount. 

So now I have to go to each item in my eBay Purchase History and manually enter the tax and shipping I paid for purchases I made after 11/2/19 on the spreadsheet. I need to categorize all of my business expenses. It is even worse to match things up when there was a combined order. Very time consuming.

While I was doing that, I added a formula to calculate what the tax rate was that I was charged on my purchases. Where I live the tax rate should be 7.375%. What I was actually charged is close, but every tax charge is at a different rate. I know that is not PayPal's problem, but eBay should fix that. eBay should also make a download option available for Purchase History!

I would like to know why PayPal is combining all of the charges (price of item, discount, shipping and sales tax paid) into one total amount! They must have the separate amounts somewhere since they need to report/pay taxes, right?
Thank you,
Sandy

Comments (25) | Leave Comment | Permalink
Readers Comments

Perminate Link for Business Buyer Baffled by eBay and PayPal Sales Ta   Business Buyer Baffled by eBay and PayPal Sales Ta

This user has validated their user name. by: Marie

Tue Jan 14 12:23:44 2020

@Utopia

I didn't miss your point.  Most states that have sales tax have also had Use Tax laws on the books for many years.  But they just had no way of enforcing the law and depended on the honesty of the states residences to pay the tax.  That wasn't working out very well for any of them.

Then along came the overturning of the Wayfair ruling by the Supreme Court.  Now states have a way of collecting the use taxes due.

So while you may not like it.  It is per the laws of your state.  If you want it changed, then you need to do that at a state level.

Perminate Link for Business Buyer Baffled by eBay and PayPal Sales Ta   Business Buyer Baffled by eBay and PayPal Sales Ta

by: SenseiSez This user has validated their user name.

Tue Jan 14 21:53:43 2020

Small wonder that eBay combines all the figures, including tax, into one amount! Well, no, not really!  In so, so many of  invoices that I've seen, my buyers have NOT been charged the correct amount in tax for their location ... sometimes the SAME location (same sale price although different sales tax amount). One guess to all of us here as to where that extra money goes .... eBay!!!  Oh yes, to make sure and counter the usual commentator apologists, that I just may have misunderstood, or gotten my arithmetic wrong: I've bought items from China on eBay and I HAVE BEEN CHARGED A SALES TAX.  Yeah, just a glitch, I guess. It was, basically, a small amount, so I wasn't gonna put up any stink.  However, it just points out the usual, no, I won't say incompetence, although I will say thievery. Small wonder.

Perminate Link for Business Buyer Baffled by eBay and PayPal Sales Ta   Business Buyer Baffled by eBay and PayPal Sales Ta

This user has validated their user name. by: Lightning

Wed Jan 15 00:04:12 2020

The states are just trying to copy the new IRS short form that says:
How much did you make?  $______
Send it in.

Perminate Link for Business Buyer Baffled by eBay and PayPal Sales Ta   Business Buyer Baffled by eBay and PayPal Sales Ta

This user has validated their user name. by: toolguy

Fri Jan 17 16:23:10 2020

eBay is trying to rip off my customer on sales tax!

His tax rate is a flat 10% in Redmond Wa.

eBay is charging him 12.97%

$101.00 with tax is now $114.10

I gave him free shipping on the 5 items he ordered

Perminate Link for Business Buyer Baffled by eBay and PayPal Sales Ta   Business Buyer Baffled by eBay and PayPal Sales Ta

This user has validated their user name. by: toolguy

Fri Jan 17 20:23:00 2020

UPDATE: eBay revised the invoice to show $111.10 which would be correct for 10% sales tax on a sale of $101.00

Now the question becomes how many people have been overcharged in how many jurisdictions.

We recently heard another poster saying their customer was charged over 12% in sales tax.

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