US ticket resellers are now liable for tax on sales profits of as little as $600 annually through online marketplaces.
The American Rescue Plan (ARP) Act forces ticketing companies such as StubHub and Ticketmaster to fill in a 1099-K form for all customers making more than $600 a year on resales. The change, imposed by the Internal Revenue Service (IRS), will see a huge increase in those liable, with the previous threshold being sales of $20,000 over more than 200 transactions per year.
The 1099-K form will report the gross amount of reportable payment card and third party network transactions for the calendar year.
“Payment apps and online marketplaces are required to file a Form 1099-K if the gross payments to you for goods and services are over $600,” the IRS said in a statement.
“The $600 reporting threshold started with tax year 2023. There are no changes to what counts as income or how tax is calculated.”
Ticketmaster said sellers should expect to receive the 1099-K form by January 31 of the following calendar year. On this form, Ticketmaster is required to include the gross amount of all reportable transactions the fan made during the calendar year.
Ticketmaster added: “The gross amount may include the price of the tickets resold, as well as fees and other amounts related to ticket sales, without adjustments for credits, discounts or refunds. Fans who do not reach the threshold of $600 in any calendar year will not receive a Form 1099-K from Ticketmaster.”
Political opposition to the move continues, with a bipartisan bill introduced in the Senate that would lower the IRS threshold to $10,000 in sales and 50 transactions. However, the congressional joint committee on taxation has warned that doing so would reduce federal revenue by $9.7bn over the next decade, the WSJ reported. While the tax change was initially slated to begin in 2022, the IRS postponed its implementation until this year.
Last year, new findings showed that ticketing resale site Viagogo had been selling the majority of festival tickets through just three sellers – each making between £730,000 and £1.7m.