Without the tax the PayPal fee would have been lower: $223.05 ( $150.00 [Removed. Phone #s not permitted]77 There was no phone number in my message, PAYPAL. This phrase should read: $223.05 * 2.9% + $0.30 = $6.77
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I am having the same problem since Ebay started collecting sales taxes this year. PayPal adds up item price, shipping AND eBay-collected tax and THEN applies its 2.9% + $0.30 fee. For example, I sold a painting to a buyer in Kentucky and there was no tax added by eBay (only item price and shipping). Then I sold another painting at a similar price to a buyer in California and there was a tax added by eBay on that sale. PayPal charged a fee on the total amount including sales tax that I had never had in my hands because it was collected by eBay for remittance to state authorities. So, here is how the second sale details in my Paypal account look like: Item price $150.00 Shipping $73.05 Tax $12.75 Purchase total $235.80 Fee - $7.14 Tax collected by eBay - $12.75 Total $215.91 Here is how the fee is calculated: Purchase total of $235.80 * 2.9% + $0.30 = $7.14 Without the tax the PayPal fee would have been lower: $223.05 ( $150.00 [Removed. Phone #s not permitted]77 I lost $0.37 ($7.14 - $6.77) on this one sale only because my painting sold into California and not, say, into Florida which is a tax-free state on Ebay. The penultimate line (Tax collected by eBay) should be placed by PayPal before the Purchase total. Guys, this is getting ridiculous. It is getting to the point where I am better off selling only into the Ebay tax-free states that as of today are: Alaska, Delaware, Florida, Kansas, Louisiana, Michigan, Mississippi, Missouri, Montana, New Hampshire, North Carolina, Oregon and Tennessee. By selling into the remaining 36 tax-collecting states I am haemorrhaging money in PayPal fees. This is just not right. It has got to change. Whether it will take a class action lawsuit to make PayPal change things, I do not know. But I am guessing that it is exactly that.
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