Are question sets "goods" and is being a writer/editor a "service?"

[Heiliger Dankgesang]

Given that 2022 ARCADIA is now clear, I am in the process of finishing mirror fee collection so that I can pay everyone who helped produce our set. As with last year, I primarily received mirror fees from hosts via Venmo and PayPal. However, several times this year, I encountered an unintended logistical setback with being paid in this manner.

Venmo and PayPal both now have a feature where you can indicate that you are paying "for a good or service" as opposed to just paying "family or friends." From my experience having been on the receiving end of this feature four times now (three times through 2022 ARCADIA, and before then, once for a gig that my string quartet played back in October) and never having used it as a buyer, it seems that purchasers aren't aware that Venmo and PayPal take a 2-3% commission whenever the good/service box is checked. As a result, those of us involved in set production lose money. (I don't remember when exactly this feature became available, but I didn't have any problems with good/service fees for 2021 ARCADIA, and now it is becoming more common.)

This could in theory be resolved by having set production teams require hosts paying via Venmo/PayPal to only select that they are paying "friends or family." However, in reality, we are stuck between a rock and a hard place. Doing that would be misleading because a question set is a material good that clubs in various circuits are paying to use at tournaments that they host. Likewise, writers and editors are providing a service by creating those questions and ensuring that they are accurate, playable, and fun. And using the good/service option also provides quality assurance for buyers, as far as I'm aware.

On the other hand, though, producing a question set pays extremely low relative to the effort/value of writers' and editors' contributions, and losing money by being flagged as a good/service X number of times can cost the set enough money to reduce writer/editor compensation to the point when it becomes even less monetarily rewarding. (I won't go into further detail about the monetary value of quizbowl writing/editing since that's already been laid out recently in other threads.)

I suppose that logisticians could try factoring the cost of the good/service commission into mirror fee payments so that set production teams are paid exactly what they intend to be paid. But this seems like additional effort to what is already a lot on one's plate, and it could prove unpredictable. Plus, then it is more expensive for schools to host tournaments. That seems like a loss for both sides.

And the truth is— this isn't just limited to those involved in the production of any given set. If a club hosts a tournament and lists Venmo and/or PayPal as an option(s) by which teams can pay their registration fees, then hypothetically, participating teams can claim that the hosts are providing a service by hosting their tournament.

Thoughts? What should we as a community do about this going forward?

[Cheynem]

I have actually always just marked "Friends/Family" each time I've paid using PayPal. Most of quizbowl is my family.

[Krik? Krik?! KRIIIIK!!!]

From ACF's perspective, I've started to do "goods" on PayPal. Since we're a non-profit that depends on being on good terms with PayPal and the IRS and since we do have to file independent contractors, it makes sense. However, for reimbursement for travel for Nationals, I do family/friends since it isn't a good being sold but rather ACF paying back staffers for money they spent.

Whether housewrites should do is tricky. I'd imagine if you're getting paid right from a university or other institution, they may need to do goods/service to be accountable on their end. However, most payments for a housewrite - be it from site to host and host to writers - are significantly smaller and more likely to fly under the radar of any mandatory reporting. My advice is that small payment are probably fine to do as from friends...but be careful with larger stuff.

Most of quizbowl is my family.

https://www.youtube.com/watch?v=cfawtDT945o

[meebles127]

PayPal G&S is primarily intended for uses such as buying and selling goods over the internet. e.g. eBay, FaceBook Marketplace, etc.. It provides accountability and a means for the buyer to get their money back should a dispute arise.

I have never had an issue, nor would I have any personal objection to, using PayPal Friends & Family for quizbowl payments. I can not think of a reasonable scenario in which a quizbowler would seek a chargeback on tournament/mirror fees, as it is the cultural norm to pay for questions received even if they're shit.

[alexdz]

As someone whose primary side income is writing and editing questions (in my case, elem/MS level), the answer to the question that titles this thread is 100% absolutely yes. Whether that means people should tick a box on Venmo or PayPal is a question of personal preferences and comfort levels, but it is absolutely true that purchasing a question set is a 'marketplace' transaction and is entitled to be treated as such. It may be seen as "annoying," but I am constantly sending W-9s and vendor setup forms to schools to get checks cut. Them's the breaks. Do some coaches prefer to just pay me with a personal check and get reimbursed by their school later, sure. But they're absolutely entitled to treat this transaction for what it is.

[Krik? Krik?! KRIIIIK!!!]

PayPal G&S is primarily intended for uses such as buying and selling goods over the internet. e.g. eBay, FaceBook Marketplace, etc.. It provides accountability and a means for the buyer to get their money back should a dispute arise.

I have never had an issue, nor would I have any personal objection to, using PayPal Friends & Family for quizbowl payments. I can not think of a reasonable scenario in which a quizbowler would seek a chargeback on tournament/mirror fees, as it is the cultural norm to pay for questions received even if they're shit.

I think the instance of a chargeback for quizbowl questions is pretty rare - plus, I think it would more likely apply to sets not being delivered rather than being of poor quality.

The issue more comes with the tax implications. Below is PayPal's policy.

All US payment processors, including PayPal, are required to provide information to the US Internal Revenue Service (IRS) about customers who receive payments for the sale of goods and services above the reporting threshold in a calendar year.

Will I have to pay taxes when sending and receiving money on PayPal - what exactly is changing?

Beginning January 1, 2023, the Internal Revenue Service (IRS) implemented new reporting requirements for payments received for goods and services, which will lower the reporting threshold to $600 USD for the 2023 tax season, from 2022’s threshold of $20,000 USD and 200 transactions.

Let's say you're a logistics coordinator - and individual and probably a student. You get checks from sites and then most of that money goes to writers and editors. Let's say your HS housewrite makes $4,000 with a few sites alone being over $600. Assuming you do this all over PayPal, that is going to set up some red flags in PayPal's reporting system if all of this is done as Goods/Services. Not to mention Alex's point about the school side of things: they need to report their spending as well and have records of where things are going for taxes, accountability, etc.

So no, I don't think this is something that should just be brushed off. Instead, I think players and sites need to consider these things.

[meebles127]

As someone whose primary side income is writing and editing questions (in my case, elem/MS level), the answer to the question that titles this thread is 100% absolutely yes. Whether that means people should tick a box on Venmo or PayPal is a question of personal preferences and comfort levels, but it is absolutely true that purchasing a question set is a 'marketplace' transaction and is entitled to be treated as such. It may be seen as "annoying," but I am constantly sending W-9s and vendor setup forms to schools to get checks cut. Them's the breaks. Do some coaches prefer to just pay me with a personal check and get reimbursed by their school later, sure. But they're absolutely entitled to treat this transaction for what it is.

I fully agree with this, and I apologize if it came off as if I didn't view quizbowl exchanges as a "transaction". In my experience at least, if I'm filling out a W-9 for a school, it's to get a check rather than receive funds via PayPal, which is why I draw the line where I do, personally.

[Stained Diviner]

I am not a logistician, but I believe the way to overcome a 3% fee is to charge 3% more. I realize this can be a problem if it is unforeseen, but you can foresee it the next year.
I am a tournament director, and a 3% increase in mirror fees announced in advance is not a big deal.

[JohnN]

The issue more comes with the tax implications. Below is PayPal's policy.

All US payment processors, including PayPal, are required to provide information to the US Internal Revenue Service (IRS) about customers who receive payments for the sale of goods and services above the reporting threshold in a calendar year.

Will I have to pay taxes when sending and receiving money on PayPal - what exactly is changing?

Beginning January 1, 2023, the Internal Revenue Service (IRS) implemented new reporting requirements for payments received for goods and services, which will lower the reporting threshold to $600 USD for the 2023 tax season, from 2022’s threshold of $20,000 USD and 200 transactions.

Let's say you're a logistics coordinator - and individual and probably a student. You get checks from sites and then most of that money goes to writers and editors. Let's say your HS housewrite makes $4,000 with a few sites alone being over $600. Assuming you do this all over PayPal, that is going to set up some red flags in PayPal's reporting system if all of this is done as Goods/Services. Not to mention Alex's point about the school side of things: they need to report their spending as well and have records of where things are going for taxes, accountability, etc.

So no, I don't think this is something that should just be brushed off. Instead, I think players and sites need to consider these things.

Just to throw my opinion in there as someone who is currently studying tax law in school, I think it is definitely something to keep in mind when clubs run tournaments that these tax and reporting requirements do sneak up on you quickly. No matter what circuit you are in or what size club you are in, just running tournaments realistically will bring in more than the minimum threshold of $600 to have paypal or venmo report this "income" to the IRS if the "Goods/Services" box is checked, and depending on the way clubs have bank accounts whether it is through the school, or by setting up an account on your own with a bank, the IRS will likely report anything they get back to the school in some shape or form, so depending on how dependent any club is with their university this could have negative implications that affect your ability to get funding through the university or could also affect your tax filing status (non-profit or otherwise).

Not to mention that for housewrites which may or may not be associated with a club bank account or just one person simply controlling the funds and dispersing to writers/editors from their own account, which could have implications in your personal tax return depending on the amount of money you have going in/out of your own account, this can also have IRS complications on your own personal tax return you file every year, so I do think that we should probably keep in mind whether we want to check the "Goods/Services" box on paypal or venmo, since if everyone checks it and one logistics coordinator gets $4000+ flowing into their personal bank account, that could have some negative impacts on your tax returns since the IRS will likely view that as income of some form.