Who will be responsible for the 1099 annual form for payment to sellers in excess of $599.99 as required by law, HIP, the APS or the third party payment companies?
Historically, I don't believe the APS has issued Forms 1099 to its sellers (at least I never received one, although my sales may never have been high enough to trigger one), whereas under the new arrangement, since all payments will route through PayPal, I believe a 1099-K will automatically be generated by PayPal at the end of the year for those that reach either the $600 threshold, or lower threshold if the state that the seller resides in has a threshold lower than federal.
Hipstamp is different than current eBay
with respect to payments. Hipstamp is more similar to what eBay
used to be, where all payments were handled via PayPal, so PayPal sent out Forms 1099-K. Now that eBay
operates its own payment service (EMP), eBay
itself is the payment processor, so the 1099-K comes directly from eBay
For example, in 2021 (and will again in 2022), I received a 1099-K from eBay
for all my eBay
sales, and a second 1099-K from PayPal for monies received outside of eBay
from other transactions. Illinois has had a $1,000 annual reporting threshold (as opposed to the federal $20,000 threshold) for several years now.
Another major issue is state and international sales tax collection and remittance. That's an issue that I've not gotten answers to on any front. In my opinion, Hipstamp has been, and continues to flout federal law by not collecting and remitting state sales tax (and VAT on international taxes) the way eBay
does under enacted marketplace legislation. I believe that Hipstamp's cumulative sales volume puts them above the threshold where this is required by law. This could land not only them but all of the affected Hipstamp sellers in hot water with state revenue departments.
Hipstamp could ultimately prove to be a figurative albatross around the neck of the APS down the road.