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@PayPal_Randy and anybody else who may be interested. This is what I submitted to PayPal Merchant Technical Support:
I am being audited by the State of New Mexico for gross receipts taxes and they need me to show them what purchases were made by residents within the state of New Mexico and what purchases were made by residents outside of the State of New Mexico. Based on a previous support request that I submitted, I understand that, for legal reasons, you cannot provide the state or zip code for individual digital purchases.
However, would it be possible to provide a summary report that simply states the total dollar amount of sales within a state (in my case New Mexico) and external to the state for use with tax audits? This should be generally useful for all PayPal business customers that sell digital only goods.
Thank you for your consideration. In my case, I have until September 11 to provide the requested data to my state tax auditor.
For those with ties to PayPal and may be able to assist, they assigned the following case number to this request: 06253677
I will keep you all posted.
While we wait for a response, assuming PayPal support was correct in insisting that they cannot provide me with the state of residence of the purchaser of digital transactions without a subpoena, a question comes to mind. Since the Google Play Store can provide me with the state of the purchaser for digital sales on their platform, is Google wrong to provide that information to me or is PayPal out of touch when it comes to digital transactions?
What amazes me is not only the runaround but then the callous attitude from the "supervisor" who, when I explained to her that I would have to pay state sales tax that I should not have to pay because they were refusing to help me, just repeated that if I wanted that information I would have to submit a subpoena.
When I asked if they could provide me with a report that just provided totals for in state (in my case NM) and out of state purchases she said "no" because it is not a report that they make available and they would not provide a custom report for me. When I asked if I could ask someone in management she just said no and that I have no recourse.
It then occurred to me that others might benefit from the summary sales report I asked if there is any way I could submit a request for a new report that would benefit more than just me to which she told me I could try and then gave me that link to submit a new report for general use.
Amazing, totally amazing, and very disappointing. When others were complaining about PayPal I always had great experiences with PayPal and told the complainers so. Now it's hard for me to defend them from a customer service perspective. I guess we will see. If they accept my request for a new report and help me with my audit I will certainly be a happy customer despite the confusion and runaround.
This is the response I got back. It seems patently false. My response is below. I'm actually getting a little tired of excuses from PayPal. The implication seems to be they do not care about their customers going through audits since they have the information but are refusing to disclose it or help in what seems like very reasonable requests.
On Aug 6, 2019 2:54 PM, Merchant Technical Support wrote:
Thank you for contacting PayPal Merchant Technical Support.
I apologize for the frustration with your reporting.
Unfortunately, since there is no address information being passed to the transactions there will be none available in the reports. Unfortunately this means that this data wouldn't be able to be provided to you solely from paypal.
But, if you are having customers input their address details into your site for profile creation on your site, you can use that list and cross reference it to the transactions from the paypal.
Thank you for using PayPal and have a wonderful day!
<name withheld to not violate forum rules>
Global Technical Support
If that is true then how do you know to charge sales tax for digital purchases by buyers in NM? Also, the State of New Mexico auditor tells me that you have IP addresses for all purchasers which will provide the location. Of course I can request address information in the future but that does not help me with my current audit.
You are talking to staff who cannot modify the software nor are they at the level to pass the information on to those who can request software changes,nor do they understand this would affect all paypal sellers who sell digital goods,since more and more states are auditing internet sellers,you should post it on Ebay seller forum ,and get some responses.
may be sign a petition and present to someone in Paypal.
@Teslafan101 I have to agree with you. This is the latest response. I am obviously not happy with it but until PayPal decides to keep better records for sellers of digital only goods they are of no help with a state gross receipts tax audit.
@PayPal_Randy , @PayPal_JonK I think PayPal is remiss in not supporting customers who sell digital goods. PayPal owes it to its customers to warn them that it will not be able to support them in an audit. This word needs to get out before more people have to spend money on gross receipts taxes that are not owed but they have to pay because of lack of PayPal support. Like I mentioned, Google PlayStore has their act together because they were able to provide me with reports that satisfied the auditor because they clearly called out the buyers state of residence at the time of purchase FOR DIGITAL GOODS sold through the Google PlayStore.
----- Final PayPal Response ----
Unfortunately, the data for the buyers IP address is not something that we would have on file to be able to provide. The data that we have to be able to provide in reporting is the same as what you would have available to see in your reporting.
Therefore unfortunately, there is not any way we would be able to accommodate such a report.
So, this is going to cost me thousands of dollars (even with the fines waived) so, for now I am charging the State Gross Receipts tax on all sales no matter what state the buyer resides in. I am also adding this disclaimer to my "Buy it Now" page:
NOTE: I must charge New Mexico gross receipts tax on EVERY sale no matter what state you reside in because PayPal will not supply a report for digital sales that provides State Auditors with total sales inside and outside of New Mexico. As a result, I cannot prove to state auditors that any sales were made outside of New Mexico so I have to pay sales tax on all sales.
Of course, until this kicks in, auditors will continue to collect money from me that I do not owe.
Thank you PayPal.