eBay calls on sellers to boycott new US federal tax law

eBay calls on sellers to boycott new US federal tax law

Recently, eBay called on sellers to jointly boycott the new US federal tax law .

 

It is understood that from January 2022 , the US Internal Revenue Service ( IRS ) requires banks and payment service providers (such as PayPal and Venmo) to send users a 1099-K tax form when the amount of a single transaction exceeds US$600 . Previously, this tax form only applied to sellers who conducted at least 200 transactions per year and had sales of more than US$20,000.

 

This change will affect sellers ’ 2022 sales and 2023 tax returns , but will not apply to sellers 2021 sales and 2022 tax returns.

 

eBay said the change will affect millions of amateur and small business sellers on the platform . These sellers do not have high order volumes, and many of them sell below the original price, without much profit margin. However, under the new legislation, these "unprofitable" sellers will also receive 1099-K tax forms.

 

eBay believes the new legislation will cause unnecessary confusion. Certain amounts that may be included on the form are not generally included in gross income and therefore not subject to income tax. This includes: amounts from the sale of personal items at a loss, amounts sent as reimbursement and amounts sent as gifts.

 

Many sales on eBay are not taxed, so if a seller's sales exceed the $600 threshold, it doesn't necessarily mean the seller will pay taxes on those sales. For example, if someone bought a bicycle for $1,000 a few years ago and then sold it on eBay for $700, the $700 would generally not be subject to income tax. But now the seller will need to report those sales as part of their tax return.

 

For individuals who do not run a business but casually sell items on marketplaces such as eBay, Poshmark, or Mercari, receiving a 1099-K tax form should be confusing. This will cause confusion, over-reporting of non-taxable income, and privacy issues.

 

eBay believes that the platform needs a reasonable threshold for consumer goods sales and protects millions of sellers from excessive taxation and unnecessary disclosure of private information. It is reported that eBay is collecting opinions from sellers and submitting them to the US Congress.

eBay

USA

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