mam98031 • Volunteer Community Member • Buyer/Seller since 1999
Ebay has not authority over what PP does, so Ebay will be of no help to you with this issue.
PP fees are for the entire amount received. That does include sales tax. So you may want to recheck your numbers. It is likely that PP is correct, you just have a misunderstanding.
If you want to give us an example here it would be easier to advise you. You can do it without giving too much detail. Just give us the various numbers, product, shipping, sales tax and PP fees.
@corvettestainless wrote:I keep exact track of my paypal fees and the taxes that were collected and then removed by ebay; the new fees include the amount of sales tax dollars that paypal collects from the buyer and then ebay removes.
Example- PP Fees were $170. Taxes collected were $203. New Paypal 'fees' per their report, changed about mid November to $373.
The amount was perfect and I no longer have to keep track manually, of the sales tax that pp is paid and ebay then takes out. This new 'amount' (fee) will be used on my deductions.
The change happened November 1st. The sales tax is being added to the payment being processed by PP. PP has always charged their fees on the total amount received.
Your PP fee on $203 worth of sales taxes would be $5.89.
As you may be aware, 11 new states have adopted Internet Sales Tax policies as of October 1, bringing the total to 34 states that now require the collection of sales tax. As the impact of this tax law becomes more apparent, PayPal and eBay are making changes that will make Internet Sales Tax collection less complex for buyers and for you.
Starting in November 2019, the way taxable transactions are processed and how taxes are collected for remittance will change, as follows:
- In states where eBay is required to collect Internet Sales Tax from buyers, order totals sent for processing will reflect the gross order amount inclusive of tax.
- Once settled, the tax amount will be automatically deducted for remittance to the applicable taxing authority.
- A record of the sales tax portion of the order will be available on the Seller Hub Order details page and through our Download order report.
Please note the applicable tax will continue to be paid by the buyer and you do not need to take any action.
We understand that the holiday selling season is nearly upon us and we are working to make this transition as smooth as possible.
@bsktstuf wrote:Hi, why would you deduct the sales tax collected as an expense on your tax return? It isn't an expense.
It would be an expense when you are doing your Schedule C for your Federal taxes. Unless you have already deducted the sales tax from the Gross Receipts number you start with on the form.
https://www.irs.gov/pub/irs-pdf/f1040sc.pdf
@bsktstuf wrote:Paypal is putting both the real fees they charge and the sales tax deducted from the payment in "FEES"...that is not correct. Fees should only be the fees they charge us on the payment, so we can deduct it appropriately on our taxes. Check out your Monthly sales report. The fees amount each day are much higher than in the past.
You are looking at the summary pages or the Activity page. I get it and I've voice my objection to how they are showing this on those pages. I hope you will also let PP know this is terribly confusing and just causes extra work for sellers.
You can however get the transactions in a download which does break out the taxes from the PP fees.
