I finally had my first Ebay sale that qualified for sales tax. To answer a question that had been out there, PayPal is collecting its commission from the seller's proceeds for the tax that is paid by the buyer, intercepted by Ebay, and paid to the state taxing authority. On a minor transaction, I sold an item for $1.99 plus 60 cents shipping. PayPal collected that, plus 21 cents sales tax for a total outlay by the buyer of $2.80. I paid PayPal fees based on the full $2.80.

Still unanswered: if I refund the purchase price, will the sales tax be refunded by Ebay or PayPal, or will it come out of my funds? I already know that under recent PayPal policy changes my seller fees will no longer be reimbursed to me for a standard refund.

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