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Tom Boblittto pay the tax. He could have accepted. I wouldn't think you'll have any major problems. I seriously doubt that he submits taxes on the stuff to begin with. How does that work with paypal? If they collect tax for a specific state, do they deposit that in your account and leave it up to you to report and pay it or do they remit it to that state on your behalf? I don't know. Anyway, you'll be okay.....