Most will be looking forward with trepidation to the UK Chancellor’s Autumn Statement due out at 10am tomorrow which he has promised will involve an increase in collecting tax and lowered spending as the government focuses on getting inflation under control.
It’s easy to point to the abject failure of the short Liz Truss premiership as the fault and that did a great deal of damage, but the reality is that governments around the world are looking at collecting tax and that is about to impact US sellers on marketplaces.
A problematic tax reporting provision will force millions of Americans to receive confusing and burdensome IRS forms. These additional income tax forms (1099-K) will be issued for the sale of virtually all goods, even used or pre-owned goods, where no income tax is owed. This new change will mean even people selling only a few things a year online will receive confusing tax forms intended for businesses.
eBay point out to US sellers that if their sales are over the $600 threshold they won’t necessarily owe income taxes on those sales. Only sales on goods that generate a profit are considered taxable—you generally won’t owe taxes on items you sell for less than what you paid for them. Nevertheless, the new federal tax reporting legislation still requires those sales to be reported which we believe places an undue burden on eBay sellers.
eBay are encouraging sellers to act ahead of the 1st of January and are hosting a grassroots campaign on eBay Main Street, their global action network, where US sellers can ask their senators and representatives to raise the reporting threshold above $600.
If you are based in the US and sell on eBay but don’t generally have a tax liability to pay, you can click to send a letter to legislators here.
Just about every government around the world is looking to close the gap between taxation and spending, with marketplaces and online retailers all being assessed as to where revenues can be raised.
