PayPal 24% tax hold

[Aquarian Sports Cards]

Originally Posted by BobC

I can also easily see the government possibly removing such an exemption in the not-so-distant future. Especially in the face of the lowered reporting threshold requirements for 1099-K forms, and the impact that is going to have on an awful lot of people. That ends up giving the AHs a distinct and somewhat unfair advantage over other consignment type sellers. And I am sure that they, and sites like Ebay, are not going to be happy with that advantage working against them, and thus exerting their own influence against/towards the government as well to correct this obvious inequity.

That's why we (AH's) were so adamant about our National association getting a clear answer on the matter. As it stood we weren't sure without clarification. Ebay's "mistake" was in becoming a payment processor like Paypal. As for what AH's are covered, that I don't know. Many states don't require any licensing, and most sports auction houses are located in those states. Hunt, Wheatland and The Collector Connection are all in PA and all have a licensed auctioneer of record. Can't speak for any of the others.

[JustinD]

Originally Posted by Aquarian Sports Cards

Ebay's "mistake" was in becoming a payment processor like Paypal.

Very interesting take!

I did not realize that after the PayPal split they could have been just fine, but greed and going after the direct managed payments pie could cost them dearly. This is very intriguing as a historical business misstep.

[BobC]

Originally Posted by Aquarian Sports Cards

That's why we (AH's) were so adamant about our National association getting a clear answer on the matter. As it stood we weren't sure without clarification. Ebay's "mistake" was in becoming a payment processor like Paypal. As for what AH's are covered, that I don't know. Many states don't require any licensing, and most sports auction houses are located in those states. Hunt, Wheatland and The Collector Connection are all in PA and all have a licensed auctioneer of record. Can't speak for any of the others.

Scott,

I'm with you. This stuff can be confusing as hell. That is why I'm hoping you may have some better luck in re-contacting the NAA and finding out if the 1099 reporting exemption they got clarification on from the IRS extends to not just AHs not being considered as Third Party Settlement Organizations (TPSOs), like Paypal G&S is, but also extends and covers an exemption for AHs from being subject to the "nominee" reporting requirements and rules as well.

And I'm not sure that Ebay in any way just voluntarily decided to become a TPSO like Paypal G&S. I think they were faced with additional scrutiny from the governments and tax authorities because they are so big, and made a "lesser of two evils" type of decision and agreed to take on the billing, collection, and remittance of sales taxes for all their sellers, as well as the 1099-K reporting. If memory serves, I thought Ebay was also supposed to be dropping Paypal as one of their primary/main payment service processors at some point a while ago. Seem to remember talk that Ebay was going to be partnering up with a European based payment processing service that would supposedly give them, Ebay, more control and say over the payment processing, along with probably a bigger piece of that processing fee pie as well. Yet when I purchase anything on Ebay, it still looks like Paypal is their major, primary player for providing payment processing services after all. At least it seems to be for me. And as for taking on the things like sales taxes and 1099 reporting, I think Ebay may have been agreeing to do that so those responsibilities wouldn't fall to or on their users/sellers. Not doing so could have potentially turned even more sellers away from using Ebay going forward, by saddling them more things they didn't understand or want responsibility for. And if Ebay didn't go along with 1099-K reporting, could see the governments/tax authorities threatening to come in and start reviewing their records and data to begin going after their sellers as well. Don't think Ebay made a mistake as much as they possibly weren't given a choice in the 1099 reporting issue.