eBay seller taxes: the 1099-K and the sales tax eBay collects for you
Two different taxes come up for US eBay sellers: income tax, which the 1099-K form is about, and sales tax, which eBay mostly collects for you. Here’s how both work, from eBay’s Seller Center.
Who gets a 1099-K
eBay says you’ll receive a Form 1099-K if you made more than $20,000 in gross sales and more than 200 transactions in the year.
Some states have a lower threshold: Arkansas, District of Columbia, Illinois, Maryland, Massachusetts, Missouri, Montana, New Jersey, Vermont and Virginia. If you sell from one of these, you may get a form for less.
Multiple accounts are combined. If you have several eBay accounts under the same SSN or ITIN, eBay adds up all their payments. If the total crosses the threshold, each account gets a 1099-K — even one that didn’t cross it alone.
A 1099-K doesn’t mean you owe tax on all of it
The form shows gross payments — before credits, discounts, fees, refunds and other adjustments. eBay points out that you’re taxed on net income, not gross receipts:
- Only goods sold for a profit are generally taxable.
- If you sell something for less than you paid — eBay’s example is a bike bought for $1,000 and sold for $700 — that money generally isn’t subject to income tax.
Keep records of what you paid for items you resell; they’re how you show there was no profit.
If you didn’t get a 1099-K, your income is still reportable — the IRS is clear that all income counts, form or not. See the IRS’s Form 1099-K FAQs below.
Sales tax: eBay collects it in most states
eBay is required to collect and remit sales tax for marketplace sales in 46 jurisdictions. In those, the buyer pays the tax at checkout and you don’t need to do anything.
Things to know:
- eBay works out the rate from the ship-to address and the items. Where a state taxes shipping and handling, eBay collects tax on that too.
- Final value fees are calculated on the total amount of the sale.
- If a buyer gets a refund through eBay, eBay refunds the sales tax it collected.
- To see how much tax eBay collected, download the Sold report from Seller Hub → Orders → Download Report.
You may still have to collect sales tax yourself in states where you have a physical presence or meet economic nexus rules — and sales on other platforms can count toward those thresholds. That’s a question for a tax advisor.
This explains eBay’s forms and process, not your tax return. For what to report and deduct, ask a tax professional.
To see what eBay’s fees take from each sale, use the eBay fee calculator.