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.