Help Selling Virtual Goods

[cschmidty]

I am having a bit of trouble figuring out exactly what kind of account I need to sell virtual game goods. Here is what I am doing...

I own a minecraft server and I would like to let people support the server by purchasing packages of items and permissions. All of the profits will be put towards keeping the server running (updating hardware, software, etc).

I have a few questions about this. First, what kind of account should I use (personal/business). Second, how would I go about setting it up? Third, would I need to pay any taxes.

Thanks

Please keep in mind that I do not want to be doing anything illegal. If this violates any of the terms and conditions (I have read them and haven't found much) please let me know.

[snowshoe]

You would have to have either Premier or Business Account in order to accept credit card payments.  A Personal Account won't work.

If you're not a registered business, you can go with a Premier Account.  Note, Premier Accounts are designed to display your your email address on the PayPal Screens and will display your real name on Invoices.  Business Accounts allow you display a business name on both the PayPal Screens and Invoices.  If you go with a Business Account, you will need at a minimum a SSN and may be asked for an EIN also.  With the Premier, you may have to use your SSN number.  Just some things to keep in mind.

As for setting up either a Premier or Business, the process is not difficult.  You can either upgrade your Peronal or keep the Personal and setup a Premier or Business.  Note, if you keep the Personal Account, you will have to have new bank account and credit card for the Premier or Business.  Make sure that all the names of the accounts match the name that you use to setup the PayPal Account.

Also consider taxes, if you make over $20,000, you will have to file a 1099.  See this info:

https://cms.paypal.com/us/cgi-bin/marketingweb?cmd=_render-content&content_ID=marketing_us/IRS6050W

What you have in mind won't violate any PayPal Policies however, as you dealing with intangible items meaning you are not selling and shipping anything physical that can be tracked, you are taking a risk.  There's no seller or buyer protection for your scenario.  Many people are doing the same thing you want to do and many people get scammed in the process.