As the operator of an online marketplace, Hmong Network is considered a “marketplace facilitator” under sales tax laws in many states. This means we are required to collect and remit sales tax on behalf of our sellers for sales made through our marketplace platform.
How marketplace facilitator tax collection works:
- When a customer purchases an item from your store on our marketplace, Hmong Network will calculate, collect, report, and remit the sales tax due on that transaction. This applies even if you already have your own sales tax permit.
- You as the seller are still responsible for providing accurate information about your products, business, and transactions so we can calculate the correct sales tax due.
- This tax collection by Hmong Network applies only to transactions made directly on our marketplace site. If you make sales through other channels, you may still need to collect and remit sales tax yourself if you have sales tax nexus.
- You should maintain your own records of the tax collected and remitted by Hmong Network on your behalf for accurate tax reporting and filing.
- If for any reason we do not collect tax on a marketplace transaction, you as the seller may still be liable for the tax due.
Please ensure your business and product information is up to date in your Seller Dashboard so we can properly collect and remit sales tax on your behalf.
Hmong Network will collect sales tax on your behalf for transactions from the following states:
Alabama
Arizona
Arkansas
California
Colorado
Connecticut
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Nebraska
Nevada
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Pennsylvania
Puerto Rico
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Form 1099-K Information for Sellers
As an online marketplace, we are required to comply with IRS regulations regarding Form 1099-K. This form is used to report payment card and third-party network transactions for sellers on our platform. To ensure compliance, we will need your Employer Identification Number (EIN) or Social Security Number (SSN) to send you a Form 1099-K if you meet the reporting threshold.
Stripe, our payment processor, will provide the 1099-K forms to give to each eligible seller/vendor on our marketplace.
What is Form 1099-K?
Form 1099-K is an IRS form used to report payment transactions processed through payment card networks (such as credit and debit cards) and third-party payment processors (like PayPal). As an online marketplace, we are considered a third-party payment processor and are required to issue Form 1099-K to sellers who meet the reporting threshold.
Reporting Threshold
Starting in 2023, the reporting threshold for Form 1099-K has been lowered to $600 in gross payment volume, regardless of the number of transactions. If you meet this threshold, Stripe will issue you a Form 1099-K for the calendar year on our behalf.
Providing Your EIN or SSN
To comply with IRS regulations, we need your EIN or SSN to issue you a Form 1099-K if you meet the reporting threshold. Please ensure you provide this information in your seller account settings.
Using Form 1099-K for Tax Reporting
Form 1099-K will report the gross amount of all reportable transactions processed through our platform. You should use this form to help calculate your business income when filing your tax return. Keep in mind that the amounts reported on Form 1099-K are gross proceeds, not necessarily income.
Please consult a tax professional or visit the IRS website if you have any questions or concerns about how to report your income from our marketplace on your tax return.
For more information on 1099-K forms issued by Stripe, you can visit their support page on the topic
VAT in the European Union
Value Added Tax (VAT) is a general consumption tax applied to goods and services bought and sold for use or consumption in the European Union (EU). VAT rates vary among EU member states, and each country can set its own standard and reduced rates. The minimum standard VAT rate required by the EU is 15%.
Key Points
- VAT is charged on the value added to goods and services at each stage of the production and distribution process.
- VAT rates in the EU range from 16% to 27%, with an average standard rate of 21%.
- Each EU country can apply one or two reduced rates, with the lowest rate being no less than 5%.
- Non-EU businesses selling goods or services to EU customers must collect and submit VAT to EU tax authorities.
- EU businesses selling goods or services to customers in other EU countries may need to register for VAT in those countries.
- VAT registration processes and requirements vary among EU countries.
- Invoices must comply with EU-wide and national rules, including information such as the supplier’s VAT number, a description of the goods or services, and the VAT rate charged.
For more detailed information on VAT in the EU, you can refer to the European Commission’s website on VAT and consult a tax professional with expertise in EU VAT regulations. Hmong Network does not collect or remit VAT on your behalf.