State tax filing

 I assume the rule behind you  not collecting sales tax in a state until you have reached a certain amount of sales is like a physical presence test.  If I purchase from a jeweler located in  another state, I don't pay sales tax because there is no physical presence in my state.

Paypal collected it for you..you did not make an error. It will be far easier to file the sales tax returns than to pay the individuals back at this point in time.