SALES TAX CALCULATION INCORRECTLY CALCULATED BY PAYPAL ON PAYPAL SALES

[gourdguru]

I have amy account set up to automatically calculate the sales tax on all transactions shipped within the state of Texas. The calculation is supposed to calculated to include shipping & handling. For years this has worked flawlessly....until recently.

I have made no changes to my account but the last 2 weeks I have had 2 transactions with the incorrect calculation.

1. The first transaction the sales tax should have been $14.74 but PayPal charged $14.06. Not a big deal except for the fact that the State of TX is going to want $14.74. I have filed an incident report & have been conversing back & forth with PayPal. They keep coming back to me not able to figure out why this is a problem & they don't seem to know how to fix it. These are the engineers, hmmm, interestin! This transaction was on 8/15/27. I have asked them to fix the transaction so it is correct & they can't figure out how to do this.
2. The 2nd transaction was yesterday. The sales tax should have been $25.14 but PayPal charged $24.04. Again I submitted a screen shot of this transaction & again they don't know what to do to resolve the issue.

After 15 years with PayPal I'm ready to tell them I've had it with their incompetence.

Is anyone else having this problem? This is NOT on Ebay nor is it involving PayPal here.

[DPCreations]

Are you selling from a web site?

What order details are transmitted to PayPal?

[gourdguru]

Yes, I am selling from a website & have been for 15+ years.

I use PayPal Add to Cart Buttons.

I have the sales tax set up for all orders shipping to TX with the correct Tax rate which includes tax to be added to shipping & handling charges. 

Bottom line, nothing has changed on my end whatso ever. The tax rate is correct, the buttons are correct, etc! The only thing that is not correct (not all the time) is how PayPal seems to calculate the taxes for particular transactions. There's no rhyme or reason to these errors. It's not all the time. I have had a couple of other orders come in that are shipping to TX that are correct so there is no logical explanation as there has been no logical explanation why PayPal was not including "required" phone numbers on some transaction & no phone number on other transactions.

I believe the bottom line is there are glitches in their system since their last software updates....as usual! They make updates & make them live before they work the glitches out. Kinda like Microsoft!

[DPCreations]

Are these single item orders or multiple item orders?  

Does PayPal create an internal invoice?  If so, what are the details?

[gourdguru]

These 2 transactions were multiple items but that varies from order to order.

I have no idea if PayPal creates an internal invoice. I've never seen one unless I generate an invoice to receive money. When someone places an order on my website all I get is the transaction details which lists every item individually with item number, quantity, price, etc. Each & every item on my website has the information set in the add to cart button so it should populate to the transaction details assuming it's not **bleep** up by PayPal as it has over the last few months.

These forms also have the subtotal, sales tax, shipping amount, handling amount, paypal fees & other pertinent information which is supposed to include the buyers name & address, shipping address & name if different from the buyer, phone number & email address....assuming that all things are working as they are supposed to.

I'm sure if you get orders with transaction details you know what kind of invormation is on them.

[DPCreations]

I have an ecommerce site but the ecommerce site creates its own invoice to include item details, shipping, and tax; only the total is transmitted to PayPal.

To see if there is a PayPal internal invoice click on one the transaction lines in your PayPal activity list.  There should then be a clickable link for the PayPal invoice; it's just PayPal's internal records.  I'm curious if that record shows any details.

Now for the multiple items.  PayPal has a wierd way of calculating sales tax; I found that out with PayPal Here where PayPal creates a receipt with the records.  PayPal does not calculate the sales tax from the total but rather PayPal calculates the sales tax on each item and then adds all of the sales taxes together.  What happens then is that the rounding errors means that the total sales tax is incorrect by or or 2 cents.

In FL I just record the sales tax as PayPal calculates it and then create my quarterly report on that data.  Actually, PayPal calculates the tax incorrectly for FL as PayPal uses a % tax rather than a tax based on bracket amount.

On advantage item tax is that some items can be listed as no tax.

Just for your information, Square calculates tax on the total rather than on individual items.

I just went back and read your original post and saw that it wasn't just a cent or two, but might be related to shipping.

If you would post $ details of the items, total, shipping, and taxes. I'd be curious to see what it might think of how it happened.

I'm curious of your error is rounding errors for individual items.