eBay announced today it had joined the Coalition for 1099-K Fairness – though a visit to the website reveals eBay cofounded the group along with Etsy, Mercari, OfferUp, Poshmark, Reverb (owned by Etsy), and Tradesy (owned by Vestiaire Collective).
Noticeably absent from the list of online marketplaces was Amazon.
According to the organization’s website at 1099kfairness.org:
“The Coalition for 1099-K Fairness is committed to maintaining an accessible, fair, and safe resale market for used and pre-owned goods via online platforms, while empowering entrepreneurs and microbusinesses trying to get their business off the ground by selling online.”
Its mission is to increase the tax-reporting threshold for sales on online marketplaces, which was lowered as part of a 2021 law – the coalition states:
“This change in the tax code, and the resulting confusion it will cause, could not come at a worse time. The new reporting threshold of only $600 means that Americans who sell only used goods and owe no taxes will now get confusing IRS forms, and many will be forced to consult costly tax experts when they normally handle their own returns, or risk over paying on their taxes.
“Even those who do not owe taxes may lack the documentation they need to file appropriately. Already-strained IRS resources will be spent processing hundreds of millions of new forms – even when no reportable income was generated.
“In addition, online marketplaces will now be required to collect full social security numbers for sellers, even when they only have a few hundred dollars in online sales.”
A page on the group’s website cites the results of a survey showing the impact of the law:
- 85% of respondents said they didn’t think the IRS should be targeting individuals who only occasionally sell online.
- 69% of respondents said they would be likelky to stop selling online or would sell less online based on the new requirements.
- nearly 40% said the new mandate posed an economic hardship.
eBay commissioned Burke Research to conduct the survey on behalf of the Coalition for 1099-K Fairness. It was conducted in February and targeted US adults who had sold online in 2021, made less than $20,000 in online sales in 2021, and were aware of eBay or similar companies.
The online marketplaces explained on the website how they proposed to advocate for a change in the law by taking the following measures:
1) Educating policy makers and the public about the important role resale of pre-owned goods plays in helping working individuals and families make ends meet, increasing reuse and limiting the amount of reusable goods in the waste stream, and providing opportunities for Americans to buy and sell their used and pre-owned items.
2) Demonstrating the negative impacts the new threshold will have on Americans facing financial hardship, the overall resale market, privacy, and the environment, and to entrepreneurs and microbusiness just getting their business off the ground.
3) Empowering stakeholders to make their voices heard and share their stories of the many benefits of online selling to members of Congress.
4) Advocating for Congress to urgently fix Section 9674 of the American Rescue Plan Act of 2021 to raise the 1099-K online sales reporting threshold.
eBay also has a section on its eBay Main Street website dedicated to covering the 1099-K issue that includes a form that makes it easy for sellers to send an email to their members of Congress to advocate for a change in the threshold.
A little late
As the IRS threshold for reporting one’s payments received has always been $600.00 and tax payers are still able to deduct the entire purchase price and any selling costs that are associated with their goods sales, there is absolutely nothing inherently unfair about the newly instituted 1099-K reporting requirements for venues.
The Coalition for 1099-K Fairness is simply trying to protect its members’ corporate profits, which are now imperiled by the enforcement of the previously enacted tax laws.
Maybe, but it is true that the IRS threshold of $600 is ridiculous. The point is that many people use eBay and other online selling venues to get rid of used items and they should not be taxed on them. It would be like requiring all garage sales to file tax returns as well.
So under your idea these people who think that they are entitled to not pay taxes. Does that mean that because i pay taxes on my earnings I can deduct the first 600.00 from my gross. If not why not. What makes them think that they are any better than a regular taxpayer who pays there taxes and doesn’t whine about it all the time.
People aren’t being taxed on items sold (well unless you consider eBay fees a tax). When selling used items you might pay tax if you make a profit over what it cost you (original purchase price minus depreciation, carrying costs etc.) so on the majority of used goods there is ZERO tax to pay.
People don’t seem to comprehend this basic fact and the sales platforms (eBay, Amazon, Mercado…) don’t seem to want to educate sellers to this simple fact.
I warned people “Be careful who you vote for”. But nobody listened. So now, enjoy the [bleep] show.
@JayThom
Re: “The point is that many people use eBay and other online selling venues to get rid of used items and they should not be taxed on them.”
While this may also be true, there are considerably more venue sellers generating untaxed annual profits through their unreported venue sales.
In addition, some sellers are also avoiding reductions to and/or the elimination of their disability, SNAP, and/or social security benefits (i.e., to name a few) by not reporting their so called non-business related (i.e. “hobby”) goods sales.
As was stated earlier, tax payers can still deduct the entire purchase price and any selling costs that are associated with their sales.
“Ignorance of the law is not an excuse.”
The venues should be educating their customers (i.e. sellers), rather than trying to modify and/or overturn a law that neither the Congress or the President has any intention of changing.
To further stem a growing tide of tax evasion, which is estimated to be around $600 billion per year, from what I have read, a proposal was made in October 2021 to provide the IRS with data on the deposits and/or withdrawals to and from bank accounts with balances of more than $600.00.
While the aforementioned proposal was never implemented, the idea that a law like this was even proposed should send shivers down the spines of poor and middle-class Americans alike.
They care for sellers? Why raising fees fro sellers then? Why making sellers raise their prices due to fee increases? Why driving buyers away because of excessive fees to sellers who are forced to raise the prices? All I can tell that they don’t fight for sellers. Did they have too much of underreported income when 1099k threshold wasn’t enforced? And all you sellers think that even if they get government to give up on $600 threshold then your fees will be lower?