Get ready to sell
Get your business ready for a marketplace.
Taxes, sales tax, the details any marketplace has to ask you for, shipping promises and advertising claims, from official sources.
Income taxes
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Report all sales income
Sellers must report all income from selling goods or services on their tax return, whether or not they get a Form 1099-K.
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Form 1099-K threshold
Payment apps and online marketplaces must send a seller a Form 1099-K when payments for goods or services total over $20,000 in more than 200 transactions. They may still send one for lower amounts.
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Why the threshold is $20,000 again
The One, Big, Beautiful Bill retroactively restored the pre-2021 threshold of over $20,000 and more than 200 transactions. The IRS issued FAQs on it October 23, 2025.
Source: IRS news release IR-2025-107
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Who owes self-employment tax
Sellers generally must pay self-employment tax and file Schedule SE when their net earnings from self-employment are $400 or more.
Source: IRS, Self-employment tax (Social Security and Medicare taxes)
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Self-employment tax rate
The self-employment tax rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare. Sellers can deduct the employer-equivalent portion when figuring adjusted gross income.
Source: IRS, Self-employment tax (Social Security and Medicare taxes)
Sales tax
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Marketplaces collecting sales tax
Many states have marketplace facilitator laws that require the marketplace to collect and remit sales tax on sales it facilitates for its sellers, once it passes that state's thresholds.
Source: Streamlined Sales Tax Governing Board, Marketplace Facilitator State Guidance
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What a marketplace facilitator is
A marketplace facilitator is generally a business that runs a marketplace, facilitates third-party sellers' sales, and collects buyers' payments before passing them to sellers. States can define the term more narrowly or more broadly, so each state's own rules apply.
Source: Streamlined Sales Tax Governing Board, Marketplace Facilitator State Guidance
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Sellers may still register and file
Even when a marketplace collects the tax, a seller may still need to register and file sales and use tax returns in a state. It depends on that state's rules.
Source: Streamlined Sales Tax Governing Board, Marketplace Seller State Guidance
The INFORM Consumers Act
What any online marketplace has to ask you for
A federal law requires marketplaces to collect and verify details from their bigger sellers, and to show some of them to buyers. Having these ready makes setup faster anywhere you sell.
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Which marketplaces INFORM covers
The INFORM Consumers Act covers online marketplaces, meaning consumer-directed platforms that let third-party sellers sell consumer products in the US.
Source: FTC, Informing Businesses about the INFORM Consumers Act
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Who counts as a high-volume seller
A seller becomes a high-volume third-party seller on a marketplace after 200 or more separate sales of new or unused consumer products and $5,000 or more in gross revenue on that platform, in any continuous 12-month period during the past 24 months.
Source: FTC, Informing Businesses about the INFORM Consumers Act
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Which sales count toward the threshold
Only sales made through that marketplace, with payment processed by the marketplace or its payment processor, count toward a seller's high-volume status.
Source: FTC, Informing Businesses about the INFORM Consumers Act
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What marketplaces must collect
Once a seller becomes high-volume, the marketplace has 10 days to collect the seller's bank account information, a business tax ID (or a taxpayer ID if there isn't one), and contact information. Individuals give a name, working email, and phone number.
Source: FTC, Informing Businesses about the INFORM Consumers Act
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Verifying seller information
After a high-volume seller hands over banking, contact, and tax ID information, the marketplace has 10 days to verify it.
Source: FTC, Informing Businesses about the INFORM Consumers Act
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Yearly certification and suspension
Marketplaces must require high-volume sellers to keep their information current and certify it's accurate at least once a year. Sellers who don't provide the required information must be suspended.
Source: FTC, Informing Businesses about the INFORM Consumers Act
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What buyers must see at $20,000
When a high-volume seller has $20,000 or more in annual gross revenue on the marketplace, the marketplace must clearly show buyers the seller's full name, physical address, and contact information, on product listings or in order confirmations and account transaction histories.
Source: FTC, Informing Businesses about the INFORM Consumers Act
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A way to report suspicious sellers
Marketplaces must give shoppers a clear way to report suspicious conduct right on high-volume sellers' product listings.
Source: FTC, Informing Businesses about the INFORM Consumers Act
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INFORM effective date
The INFORM Consumers Act took effect June 27, 2023. The FTC and the states can both enforce it.
Source: FTC, Informing Businesses about the INFORM Consumers Act
Shipping promises
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Shipping promises and the 30-day rule
Sellers need a reasonable basis for any shipping time they state. If they don't state one, they need a reasonable basis for believing they can ship within 30 days.
Source: FTC, Business Guide to the Mail, Internet, or Telephone Order Merchandise Rule
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Late orders need consent or a refund
If an order can't ship on time, the seller must ask the buyer to consent to the delay. Without that consent, the seller must promptly refund the buyer's money without being asked.
Source: FTC, Business Guide to the Mail, Internet, or Telephone Order Merchandise Rule
What you say about your products
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Truth in advertising basics
Under the FTC Act, product claims must be truthful and not deceptive, sellers need evidence to back them up, and ads can't be unfair.
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Health and safety claims need science
Health or safety claims usually need competent and reliable scientific evidence. Statements from happy customers usually aren't enough to support them.