yeah I've had sellers not want to accept PayPal goods and services for that reason. You can avoid the income tax because well, there's no income, its a sale at a loss. But you may owe state sales tax which is a different question. Selling a used item is not taxable income, especially if it is at a loss. But it might still be subject to sales tax. The fact that PayPal reports it doesn't mean its taxable but it does mean you might have to add a line for cost of good sold when you file.If you're in the US it may also cost you an IRS donation in 2022 and onward as PP and Venmo will send a 1099-K for goods and services sales totaling more than $600. I just sold some gear totaling 1k so sounds like I'm getting the form. There may be a way to mark it as non-income on the tax return not sure, but otherwise make sure to keep your purchase records so you don't get taxed extra on your hobby when you sell your stuff, usually at a loss.