Reseller Taxes and 1099-K: What US Resellers Should Know

If you resell sneakers, cards or anything else for a profit, that profit is taxable in the US, whether or not a marketplace sends you a tax form. The rules changed in 2025: the federal Form 1099-K threshold went back to $20,000 and 200 transactions. This guide explains what that means, how resellers report income, what you can deduct, and the other taxes to know about.

This is general information, not tax advice. Talk to a tax professional about your own situation.

The 1099-K threshold is back to $20,000 and 200 sales#

Form 1099-K is a report that payment platforms and marketplaces, such as eBay, StockX, PayPal and TCGplayer, send to you and the IRS showing the payments you received. For years, the threshold was scheduled to drop to $600. The 2025 tax law (the One Big Beautiful Bill Act) reversed that. Platforms now file a 1099-K only when your gross payments exceed $20,000 and you have more than 200 transactions in the year. The change was retroactive, so the $600 threshold never took effect.

Two things to know:

• Some states are lower. Massachusetts, for example, requires a 1099-K at $600. StockX lists other state thresholds, including $1,000 in New Jersey and $1,000 with four or more transactions in Illinois.
• No form doesn't mean no tax. The 1099-K is a reporting form. Taxable profit is taxable either way.

Platforms collect your Social Security number or taxpayer ID so they can report. StockX, for example, holds payouts until sellers at the threshold provide one, and TCGplayer asks every seller for a taxpayer ID.

Selling personal items vs reselling#

How you're taxed depends on what you're doing:

• Selling your own used stuff for less than you paid (old sneakers, a collection you're clearing out) isn't taxable. Those losses aren't deductible either. If a 1099-K includes those sales, the IRS explains how to report them so they aren't taxed.
• Selling a personal item for more than you paid is a taxable gain.
• Buying items to resell is income from a hobby or a business.

The IRS looks at factors like whether you run it like a business, expect a profit and spend substantial time on it. If you regularly buy sneakers, cards or Amazon inventory to resell, you may well be running a business in the IRS's eyes. A business reports income and expenses on Schedule C, and can deduct its costs. A hobby must report all its income and generally can't deduct its expenses, though it can subtract the cost of the goods it sold.

What resellers can deduct#

As a business, you pay tax on profit, not on sales. The main items:

• Cost of goods sold. What you paid for the items you sold, including shipping to you. The IRS treats merchandise bought for resale as inventory; Publication 334 explains how to work out cost of goods sold.
• Selling fees: marketplace commissions, payment processing, listing fees.
• Shipping and supplies: postage, boxes, mailers, labels.
• Tools and subscriptions used for the business: bots, cook groups, proxies, sourcing and research tools, repricers.
• Other business costs, such as grading fees or storage.

Keep records. The IRS says purchase records should show who you paid, how much, the date and what you bought, with receipts, invoices or card statements as proof. A spreadsheet or bookkeeping app that tracks each item from purchase to sale makes tax time much easier.

Self-employment tax#

Business profit is generally also subject to self-employment tax: 15.3% for Social Security and Medicare (the Social Security part is capped each year) if your net earnings are $400 or more, on top of income tax. It catches many new resellers by surprise.

Because nothing is withheld from reselling income, you may need to pay estimated tax quarterly with Form 1040-ES if you expect to owe $1,000 or more. For 2026 the due dates are April 15, June 15 and September 15, 2026, and January 15, 2027.

Collectibles held more than a year#

If you sell cards, coins or other collectibles from your personal collection that you've held for more than a year, the gain is a long-term capital gain. For collectibles, the IRS taxes it at a maximum rate of 28%. Items held a year or less are short-term gains, taxed at ordinary rates. Inventory you bought to resell is business income instead.

Sales tax#

States with a sales tax generally require big marketplaces to collect it from buyers. eBay, for example, says it calculates, collects and remits sales tax where state law requires it, and TCGplayer collects it in the states that have one. If you also sell directly, such as in person, through your own site or in Discord deals, you may have to collect and pay sales tax yourself, depending on your state.

For the record-keeping and business setup around these rules, see our guides to tracking sales and profit, resale certificates and sales tax and whether resellers need an LLC.

A simple year-round routine#

1. Separate your money: a separate account or card for reselling.
2. Log every purchase and sale, with dates, costs and fees.
3. Save receipts and invoices digitally.
4. Set aside money for tax from each sale. Many resellers keep a fixed share aside.
5. Download platform reports at year end, including any 1099-K, and check them against your records.

For platform fees, see our guides to StockX, GOAT and eBay fees, selling trading cards and Amazon FBA vs FBM. Gambling winnings follow different rules, covered in our guide to sports betting taxes.