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I am an Etsy seller, and I use Paypal to collect payments for purchases. All of the sudden- my in state orders are not being charged sales tax. My paypal account is set up to charge Illinois residents sales tax (the Domestic Sales Tax Rates section on my Paypal account shows Illinois as Active), I have been collecting sales tax from Illinois customers flawlessly for the last two years. Anyone have an experience like this? I tried deleting my sales tax profile in PayPal and re-creating it, but this didn't fix it. Thanks for any help you can give me,
I am have the same exact issue. I have added Idaho state for 6% and it doesnt add 6$ to an idaho based paypal account. To test it further I added a Washington state based sales tax and purchased an item with a Washington paypal address and it didnt add tax to that one either. Any ideas?
Hi RobinHallett and alpacas,
There are a few things that could be causing this to happen.
If you are using a 3rd party shopping cart, it's possible that the sales tax is being set manually by the shopping cart. In that situation, the sales tax would need to be setup with the shopping cart preferences or it would need to be setup to not specify any sales tax at all. Even if it sends a sales tax amount of $0.00 for a payment, that would override the sales tax options in your profile.
Another possibility is that when this is being tested, you are not logging into a PayPal account that has a shipping address that would trigger the sales tax. The sales tax isn't added to the total until after the shipping address is entered or after the customer logs into their PayPal account.
I would guess that this is probably caused by 3rd party shopping cart settings. I hope this information is helpful to find the cause of this problem.
I am in the process of setting up an Etsy Site and read this article http://www.handmadeology.com/etsy-news-etsys-new-checkout-system-supports-sales-tax/ and noted this specifically "If you have sales tax settings at PayPal, the new Checkout will ignore these settings, so make sure you set sales tax rates on Etsy"
This new checkout in Etsy rolled out August 2010- but I think the old checkout method was still in place for awhile and did keep using your PayPal tax settings. That may have recently gone away- thus the change.
Hope this helps.