Anyone else just get a 1099 email from eBay even though you are below the selling threshold?
BaltimoreYankee
Posts: 3,010 ✭✭✭✭✭
I am in a state that has the $600 selling threshold but I know I didn't sell that much this year (including shipping).
I was just wondering of others here received the email even if you didn't hit your state's selling threshold.
Daniel
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Comments
I received notice of the 1099 from eBay…
Yes, I received it several weeks ago. Initially, I clicked on the link that I thought said the threshold was $600 for 2024, and I posted that here. Later, I looked at the link again, and it said the threshold was $5,000 for 2024. I guess I could have misread it the first time, but I looked at it more than once before I posted here.
Always looking for Mantle cards such as Stahl Meyer, 1954 Dan Dee, 1959 Bazooka, 1960 Post, 1952 Star Cal Decal, 1952 Tip Top Bread Labels, 1953-54 Briggs Meat, and other Topps, Bowman, and oddball Mantles.
The threshold is $600 for Maryland and maybe 2 other states. I make sure my accounting is pretty good so as not to run afoul of Uncle Sam.
I only sold about $5000 on eBay
in 2023b[I had to pay the FED's 20K and RI 8K
Didn't get anything from here thank God
You didn’t get a 1099 from
Collectors Universe for all your hard work here? Bummer.
No, most was for this year
I'm PC illiterate. if it's not mailed, I probably don't see it.
Do they mail you a copy?
I got the email telling me that if I get a 1099K it will be electronically delivered unless I opt for paper.
Good for you...I never recall seeing such.
Get about 400 e-mails a day.
I got that email and it definitely saidn$600. I found it odd because I know the IRS website says the limit for 2024 is $5000. I cannot find the email at this point.
I'm glad someone else got the $600 email. I thought I was losing my mind.
The email had a link to click on. That link now shows $5,000, not $600.
Always looking for Mantle cards such as Stahl Meyer, 1954 Dan Dee, 1959 Bazooka, 1960 Post, 1952 Star Cal Decal, 1952 Tip Top Bread Labels, 1953-54 Briggs Meat, and other Topps, Bowman, and oddball Mantles.
Then check your ebay messages. It would be there, too. Ignoring it won't be an excuse come tax time.
$5000 is the federal limit but some states have a lower ($600) limit.
If you're in a state with the threshold at $600, and you sell less that $600, you will NOT receive a 1099-K. If you did, it might be because with shipping, fees, etc,... it might be a little over $600 and then you MIGHT receive the 1099-K. Not sure how they determine that with the fees, though.
Before we get back into all that, can we help Fred get some email filters setup for all his spam?
That $5k is gross sales but doesn't include sales tax collected...correct?
I believe it includes the shipping that you charge but excludes sales tax.
Gross sales includes shipping, taxes, and fees.
Terry Bradshaw was AMAZING!!
Ignore list -Basebal21
Don't worry about me.. I owe about 30K already from 2023.They will contact me if they need more ..lololol
My 1099 the past 2 years did not have taxes. I also called EBAY just to make sure. EBAY collects the taxes on behalf of the seller. The seller never gets the tax money whatsoever.
More emails?
LETTTERS!!!!
When you consign to an eBay seller (or auction house), you don't get a 1099, I guess. It's up to you to report your sales??
Always looking for Mantle cards such as Stahl Meyer, 1954 Dan Dee, 1959 Bazooka, 1960 Post, 1952 Star Cal Decal, 1952 Tip Top Bread Labels, 1953-54 Briggs Meat, and other Topps, Bowman, and oddball Mantles.
I agree that it doesn't includes sales tax, which is just a passthrough. I don't believe it includes the fees that eBay charges the seller. A few years back, I got a 1099 from eBay and actually reconciled it back to all my sales for the year - I believe it was just the total of the hammer price plus shipping.
This is correct.
Enjoy the go.
I think the sales tax issue with eBay is a bit of an oddball. Derivative topic for sure. But it seems weird that if I sell an item to someone in North Carolina that eBay would have to charge them sales tax. Doesn’t make sense to me as I don’t have nexus in North Carolina, for example. I can see why the states want sales tax collected… but that doesn’t make it right.
All those years there were no sales taxes on ebay. What happened?
Terry Bradshaw was AMAZING!!
Ignore list -Basebal21
$$$$ States see that as bonus cash.
EBay fought it until they realized they could grab an additional 11-12% of the total tax amount from sellers gross just for processing the transaction. eBay now makes billions a year due to collecting state taxes.
It is highly messed up that eBay charges sellers a fee on sales tax that the sellers never collect.
Sales tax should not be collected if the states do not require it.
Neither sellers nor ebay should get monies collected as a sales tax.
ANY overpayment of a tax of any kind should be immediately returned to the payer.
Is ebay paying the taxes they collect to the states that charge a sales tax?
Are buyers allowed to claim these tax payments on their income tax returns?
I am sick and tired of being taxed, but when I am being over taxed and the collector of those taxes keeps the funds, it's simply theft.
Living in Minnesota can drive you crazy. Last year the state collected approximately double the budget. Each taxpayer should have gotten a $4,800.00 refund. $260.00 was returned to many, but not all.
The state spent the rest and doesn't bother to tell us what it was spent on.
Unbelievable!
The US Supreme Court ruled in the summer of 2018 in South Dakota v. Wayfair overruled Quill v North Dakota, which thus made remote sellers liable for state sales taxes. After a further time of legal exploration, EBay determined that they were indeed liable for sales taxes and of course they not only would collect it from the buyers, but charge the sellers their usual fee rate on those taxes for the "effort" involved in collecting and filing.
edit: the really annoying thing is that EBay charges sales taxes on many coin sales to states where such sales are not subject to sales taxes. You have to advise your buyer to dispute it to get the refund, and in turn you will get back your fee on the tax. I have a standard email saved that I send to coin buyers in the many states that do not tax them.
Don’t you see eBay as different than Wayfair as eBay is a marketplace? Generally before you’re required to collect sales tax in a state you have to reach economic nexus for that state. That could mean having a brick and mortar or some other presence there or once reaching a threshold of sales in the state. It seemed incorrect that eBay was collecting sales tax on a sale they brokered. I understand why this is the only way sales tax would get collected so it makes some sense from that perspective but it still doesn’t seem legitimate to me.
it sure seems worth it to me for ebay to charge me sellers fees on the sales tax than to have to figure out each states sales tax and then make separate payments to each state to take care of those taxes.
George Brett, Roger Clemens and Tommy Brady.
That^
I did mention that I understand why it's being done as it is. I was hoping someone with a proper understanding of tax codes could explain how this can be done as it is. I'm merely tax-adjacent in that I listen to the tax guys talk about the tax stuff that impacts me and my businesses, but past that I stay in my lane.
I did go so far as to ask my accountant about it, and he brought to my attention, marketplace facilitator rules and provided me with a couple links to enjoy. Generally, they are required to collect tax once they (eBay or the platform) reaches a threshold in sales in the state, in a calendar year. This amount is usually around $100,000, but some are as high as $250,000 as of 2024. What he did add to this was the following.
I have used Cybersource and Avalara for getting sales tax amounts based on address in the past. It's not easy, so, again, I do understand why it's done this way regardless... There's not just 1 sales tax you need for an entire state, for example. I know more than I did a few days ago about this.
I am having a similar discussion with eBay regarding the taxes they charge with domestic Canadian sales but between provinces... still trying to figure it out as they are considered an online 'marketplace facilitator'. However, normally you only charge the GST or HST with a domestic out of province shipment... but they have been charging me both PST and GST.... so basically 7% extra with each purchase.
When I spoke with their specialist, they agreed after some debate and said they would review the purchases I shared and refund any applicable extra tax within a few weeks. Still waiting to see what happens.
I will assume that you are not an attorney and have not carefully read the Wayfair case. The case is NOT specific to Wayfair or to the South Dakota law. It simply strikes down the physical presence rule as an anachronism. You are now considered to have a physical presence by selling over the Internet to a South Dakota (or any other state) resident.
Justice Kennedy left open the question as to whether other smaller sellers could challenge specific state laws under other circumstances than the physical presence rule. To do so one would have to spend a very large amount and a very long time litigating their own case, with a highly probable losing outcome. I have advised clients on this question, and all have elected to just pay the sales taxes as the most economically rational choice.
EBay sought legal opinions at the time regarding their potential liability and the results were not encouraging. This was widely discussed within the legal community even prior to the decision and the consensus was at the time that the evolution of technology would not be allowed to block sales tax collection. So in essence, the question that you should consider is whether you would be required by state or local tax authorities to withhold and pay sales taxes if you operated in that state.
And as for EBay, like it or not, they would not win a challenge based upon the argument that you imply in your comment, as the case made no distinction on the type of seller. And it is not to their advantage to spend the effort to determine which sellers meet any particular state criteria. It is a correct business decision to simply collect taxes on all transactions.
And as a footnote, I will add that EBay does a piss poor job of computing rates, as they charge uniformly higher rates to those living outside of cities with city sales taxes based upon the most proximate zip code. I live in the county outside of a city with 2% sales tax and am charged the full 8.25%, despite my state tax rate being only 6.25%. But I do understand their decision to do so as an easy way to run their business.
I am not an attorney, and I have not looked at the Wayfair decision, carefully or otherwise - until tonight. I do understand how it's done after learning about the market facilitator distinction. I also did previously understand the various paths to economic nexus as it's something that I have to deal with myself. I appreciate your explanations and your interpretations. I do have a question as to what argument I was implying. It's not clear, and I wasn't intending to make or imply an argument here, so I am curious what you read into my statement.
As for your situation with eBay using zip code alone for tax rate determination... I don't know what eBay uses, but I will say that when I was looking at options for calculating sales tax that was a pretty common talking point in the presentations - how they do not simply use zip code because it's wrong. I recall an example from one pitch where they showed a single zip code with 6 different tax permutations based on state + county + city + special + transit overlaid by a state tax rate cap. That's when I decided this wasn't something I ever wanted to try to do myself and it's worth paying a fraction of a penny each transaction for someone to do it for me. I'm a little surprised eBay isn't able to get it right.