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PayPal fee charged on sales tax

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New Community Member

PayPal fee charged on sales tax

Hello, In the PUA i cannot located language which provides PayPal the right to its fees on sales tax collected from the buyer. I as a seller, must collect sales tax in certain states and submit monthly returns and pay the sales tax in full to the State. When I called my State DOR that I wish to reduce the liability to be paid by the amount PayPal charged me the State informed me it is illegal for PayPal to charge their fee on the sales tax collected. How do other sellers manage this issue? Thank you

5 REPLIES 5
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Advisor

Re: PayPal fee charged on sales tax

Paypal just like credit card processor charges a fee on the total amount received.

your state staff does not kow what he is talking about.

when you goto a store and by something with your credit card,merchant pays fee for the total amount charged.

chalk it up to business,mark up your price to compensate for that,also you get to use the sales tax proceeds before you remit to the state.  

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Contributor

Re: PayPal fee charged on sales tax

I think it's Nevadasmith that doesn't know what he is talking about. No company in the US charges an additional fee to collect sales tax. I go to McDonalds and buy a burger for $1.99 and McDonalds adds state tax to my purchase. In VA it's 4%. McDonad's- like all companies other than PayPal- do not then add the tax and the apply an additional 2.9% fee on that total. Worse- Paypal is making revenue by charging you fees for taxes you do not collect or receive. Ebay collects these taxes on your behalf- so it would make legal sense that they charge on the full amount in terms of final value fee. PayPal never sees these tax funds but makes profit on them. How is that legal?

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Contributor

Re: PayPal fee charged on sales tax

I'm super glad that I'm not the only one who is looking into this! However, it's a tad disappointing with the tens of thousands(I think, not sure, just speculating at the number) of sellers who use Paypal, I'm seeing only this post(thus far in my research on this topic) with only 3 other people than myself saying they have a problem with it.

 

It definitely seems illegal that they are just profiting extra tens or hundreds of thousands, if not much much more, each month(again, speculation) by just switching the order which they place these fees and collections, and just taking more from the seller without any valid reason. I feel we're being robbed a few cents at a time, which adds up. It's business - therefore I'm going to avoid as many fees as possible - legally. This is me safeguarding my business, that is, investigating this matter - WHICH IS COSTING ME MONEY at the end of the day, and finding solutions. I really feel this is illegal, and dirty business that looks clean. Anyone actually know, or have links or anything to a specific law on this, or if one exists?

 

Thanks

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Contributor

Re: PayPal fee charged on sales tax

Can we sign a petition make PayPal fix it and refund us or Can we sue PayPal? We did not collect sales tax, eBay collected them

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Contributor

Re: PayPal fee charged on sales tax

Actually to me it's not whether we or ebay collected the sales tax. What seems unfair is that Ebay is collecting extra fee from the sellers because the sales tax is included as part of what the customer pays us, as per the recent change. Fair? I don't believe so. I think it's wrong nickel and diming sellers. Although it's small, it would definitely reflect on monthly/annual income of ebay corp and the sellers.