U.S. Sens. Sherrod Brown (D-OH) and Bill Cassidy (R-LA) have introduced legislation that would address online sellers tax paperwork by ensuring fewer casual sellers receive excessive paperwork.
The Red Tape Reduction Act would increase the threshold for when individuals and entrepreneurs receive 1099-K tax forms when they sell goods online, raising the threshold to $10,000 from $600 and ensuring fewer small businesses receive more paperwork for online sales.
“Ohio small businesses are frustrated with the 1099-K reporting threshold,” Brown said. “This red tape hits small businesses and other Ohioans selling products online, sucking time and resources from the smallest online sellers.
Brown said by raising the threshold the Internal Revenue Service (IRS) would be prohibited from interfering with minor transactions and excessive paperwork would be eliminated.
“The cap the Biden administration implemented is hurting everyone from small business owners to people just trying to pay their rent,” Cassidy said. “This bill lifts that cap and prevents the IRS from spying on American taxpayers.”
Currently, online sellers and small businesses will be required to complete a 1099-K form for any transaction over $600 starting next year, adding Brown has been working to find solutions to relieve the impact on small businesses.