or the alternative to push payments back to cash only or quit because its not worth the hassle.
Not if the goods were for personal rather than business or investment use. Losses on sale of personal-use assets are non-deductible for income tax purposes.
1) Selling used goods at a loss is not deductible on your tax return unless you are in the business of selling used goods.
2) Unless you are selling a lot of tangible goods (i.e., you have a business selling things), you aren't even eligible to register for sales tax in most U.S. states.
3) If tax applies to the sale of a used good in this situation, it would be a use tax that is the responsibility of the buyer to report and pay.
In many areas of economic activity, there is a level of operation where the costs of complying with tax requirements far, far exceed the costs of the actual tax due.
A good example of this is trying to operate a small, wholly-owned foreign company while a US tax resident. The costs of filing a complete form 5471 can be many thousands of dollars at a minimum (and potentially much higher), even if the amount of tax due is negligible or even zero.
I don't know if there's a term for this, but it strikes me as a kind of deadweight loss, where tax authorities gain tiny amounts of additional revenue to but tax payers spend much larger amounts on compliance.
My concern with sending more and more information to tax authorities is increasing these kind of deadweight compliance losses for small operators who will owe little or no additional tax.
Another poster mentioned selling a used couch for $600 and having that be reported to the IRS. It would then be incumbent on the seller to prove it was a loss and not a capital gain. Now I assume the auditor would let the seller off the hook for something like this, but the key point is that a transaction that no one was reasonably expected to report is now reportable and must be documented.
If the transaction is marked as commercial in the app.
I also run a local youth baseball/softball lessons. I push all received funds into a paypal account. I don't profit from it, I just pay for field reservations. All money in goes out. But now, I'll have to jump through hoops. Now I ask myself if its worth it training other people's kids for free.