I don't understand. Is everybody that's accepting PayPal for a sale called a merchant even though most hobbyists are not doing it for profit?
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Actually there was no law just passed to collect sales tax for interstate purchases. The law has always been that the consumer is required to pay the sales tax, if any, on goods they purchase from out of state in cases where the vendor does not collect the state sales tax - local bookkeeping services from company Your Books On Time.. A recent SCOTUS decision ruled that it was permissable for states to force out of state vendors to collect sales tax for the state in which the consumer resides. Some states, like North Dakota, have already provided free software to mail-order companies that will calculate, collect and submit sales taxes on purchases made by ND residents. I expect other states to follow. The state sales tax was always applied to out of state purchases, but prior to this ruling, mail order vendors could not be compelled by the states to collect those taxes. That is over. And you can thank Amazon for that one, by the way. How’s it going in Virginia with this question? |
@gnason - Like I posted above, this was largely the doing of Amazon. When they started to add fullfilment centers in many states, they lost their competitive advantage of not having to collect sales taxes for most transactions. In order to even things up with smaller e-tailers, they pushed hard to overturn Quill v, ND. Just keep in mind that consumers were always responsible for paying sales taxes to whatever states they made a purchase from. Quill v. ND just prevented states from compelling mail order retailers to collect and submit sales taxes from out-of-state customers. @mantaman - IIRC, Florida has no state sales tax, just as some other states, like NH. |
The Supreme Court's internet Sales June tax ruling Is billion-dollar boon for states
The U.S. Supreme Court says states are allowed to collect sales taxes from online retailers that don’t have a have a physical presence in their borders. By a 5-4 vote in the case South Dakota v. Wayfair, the majority overturned the court's 1992 decision in Quill v. North Dakota, which had affirmed the “physical presence” test for state sales-and-use tax collections. This stinks big time. What will they tax next, breathing air? |
Actually there was no law just passed to collect sales tax for interstate purchases. The law has always been that the consumer is required to pay the sales tax, if any, on goods they purchase from out of state in cases where the vendor does not collect the state sales tax. A recent SCOTUS decision ruled that it was permissable for states to force out of state vendors to collect sales tax for the state in which the consumer resides. Some states, like North Dakota, have already provided free software to mail-order companies that will calculate, collect and submit sales taxes on purchases made by ND residents. I expect other states to follow. The state sales tax was always applied to out of state purchases, but prior to this ruling, mail order vendors could not be compelled by the states to collect those taxes. That is over. And you can thank Amazon for that one, by the way. |
If you have sold a lot of items over last few years and used PayPal to receive your funds you may have got a letter from PayPal stating this was an itemized list for you to file with the irs at tax time. I guess they think us poor souls trying to scrape by selling older gear to fund newer gear now should pay tax on our sales as well as on our purchases.. Just another reason to give PayPal the boot as a medium for accepting payment for goods sold. |
Paypal does not charge sales tax. In some states it is required to add sales tax to the item purchased. Here is an explanation of how it works! https://www.taxjar.com/guides/sales-tax-guide-for-paypal/#the-basics-of-sales-tax-in-the-us |
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