How can they charge a commission on sales tax and shipping?
I'm guessing that what you are really asking is "why" and not "how". They do it because they choose to.
Anyway, how does that $31.50 get paid? Who pays it?
eBay adds it to the buyer's total, the buyer pays it, and then eBay forwards it to the state in question.
Does EBAY really report to FTB hobbyist home sales
Managed Payments calculates the gross amount of payment processed for a taxpayer ID, and if it exceeds the threshold of $600 they will file a 1099-K with the IRS. This is what the law requires, so that is what Managed Payments does.
This is not a business to me.
Neither the law nor the IRS care about your opinion of your activity.
FYI, the item actually costs me over $2000 purchased when new
Then you should be able to deduct the original cost and avoid any tax liability.
that I paid sales tax on.
Sales tax is a tax on a financial transaction, not a tax on a physical item.
