So I sell an item to a person who is living in the same state as me and sent the item to an address also in the same state. No problem there until I see an extra charge on my paypal account for the transaction.

So I send an email to paypal who inform me that the buyer is registered in another country so an over the border surcharge has been applied to my fee. 

Just a heads up. I have replied to paypal to reconsider the fee but I dont think it will happen.