As a “Marketplace Facilitator”, various state laws require us to collect sales tax on behalf of businesses in certain situations or within total sales thresholds.
If your marketplace is in any of the states listed below, we will collect tax on your behalf and remit to the state. You WILL NOT receive tax funds on orders and you do not need to worry about paying sales tax on those orders:
- Arkansas
- District of Columbia
- Florida
- Illinois
- Indiana
- Iowa
- Florida
- Michigan
- Nebraska
- Nevada
- New Mexico
- North Carolina
- North Dakota
- Ohio
- South Dakota
- West Virginia
- Wisconsin
- Wyoming
If you are not in these states, the system will pay you funds for taxes collected on your orders. You are responsible to pay sales tax on your orders according to state and local laws.
1099K forms
Your sales may be subject to IRS tax reporting depending on the products you sell. Below is additional information regarding the tax forms you may receive.
Form 1099-K is an IRS information return that includes the gross amount of all payment transactions you received within a calendar year. All payments to vendors go through our processing partners Stripe and PayPal. Depending on who you use to receive payments from our marketplaces, you may receive a Form 1099-K from them depending on the totals of your sales and transactions to use when you file taxes.
You will received a Form 1099-K by January 31 if you have received payments above the IRS reporting thresholds in the previous calendar year:
- For calendar years on or after January 1, 2022:
- Gross payments that exceed $600, AND
- Any number of transactions
Please consult with your business accountant for proper filing of taxes for online marketplace sales, depending on your state regulations and if you received tax funds from those sales.