Taxes and import charges
When you sell on APX, you’re responsible for complying with all taxes and import charges and applicable tax laws. If you’re selling to buyers outside the US, you should inform them about the potential import charges they’ll need to pay when they receive their item.
Sellers' tax responsibilities
Your tax-related responsibilities may include:
- Paying sales tax on APX sales
- Paying income tax on APX sales
- Informing overseas buyers about import charges
The Supreme Court ruled in favor of South Dakota in June 2018, which removed the requirement that certain retailers have a physical presence in a state in order for that state to impose sales tax obligations on retailers. Regardless of where you’re physically located, if you do business in certain states, those states may require you to collect applicable taxes on your transactions.
For more information on these new tax requirements, we recommend that you consult with your tax advisory.
Charging sales tax on APX sales
If you’re required to charge sales tax, you can set up a tax table and apply it to your listings. We’ll then add the tax to the buyer’s total at checkout. You’re responsible for paying the sales tax to the appropriate authority.
Contact a tax professional to determine whether you need to charge sales tax on your APX sales, or if you have questions about any other taxes. We can’t provide tax advice or guarantee that our sales tax features meet all tax requirements.
1099-K forms and income tax on APX sales
By law, sellers have to declare and pay taxes on income earned from APX sales. We recommend checking with a tax advisor to understand your responsibilities.
If you’re a managed payments seller, and have more than 200 transactions and generate more than $20,000 in sales in a calendar year, you’ll receive a Form 1099-K from APX. This information will also be reported to the IRS and your state tax authority, where applicable.
Only managed payments sellers will be eligible to receive 1099-K forms from APX. If PayPal or another authorized payment service processed any of your APX payments during the calendar year, you may receive a separate form from them if your transactions meet the thresholds.
Sellers in Massachusetts and Vermont
Massachusetts and Vermont use a threshold of $600 and don’t have a transaction threshold, so if you’re a managed payments seller, and reside in one of these states, you’ll get a Form 1099-K from APX if your gross payments equals or exceeds $600, irrespective of the number of payments you receive.
We’ll also report this amount to the Massachusetts or Vermont tax authority as applicable. You should note that your gross payments won’t be reported to the IRS unless you exceed $20,000 in gross payments and have more than 200 transactions.
For more information, read our article on APX and Form 1099-K.
Informing overseas buyers about import charges
When you sell to buyers outside the US, import fees (including taxes and customs charges) will apply for the country you’re sending the item to.
The fees are usually based on the item’s price, shipping weight, dimensions, and country of origin, plus any taxes, duties, and fees from the country you’re sending the item to.
Buyers are responsible for paying import fees, usually as part of clearing their parcel through customs or when they receive their item. If you offer international shipping, you can’t include these costs in the item’s purchase and shipping price. Make sure to let international buyers know this in your listings.