Why is Mercari requesting my tax identification information?
Third Party Networks (such as our Mercari marketplace) use IRS Form W-9, Request for Taxpayer Identification Number (“TIN”) and Certification, to obtain tax identification information from individuals and sellers who receive reportable payments stemming from marketplace transactions during the calendar year. When required, Third Party Networks subsequently provide this information to the IRS and applicable state taxing authorities by filing a Form 1099-K information return. For more information, please refer to this IRS publication, provided by the IRS.
What information is required?
You will need to provide Mercari with your tax and certain personal information in order for Mercari to file a complete and accurate 1099-K tax information return, should you meet the filing requirements. Mercari will verify this tax identification information with third party verification providers and applicable federal and state taxing authorities. During this process Mercari may request additional information.
This tax and personal information includes the following:
- Legal First and Last name
- Social Security Number (SSN) or Individual Tax Identification Number (ITIN)
- Mailing Address
- Tax Classification (Reporting status for income tax purposes i.e. individual v. business)
For certain tax classified business entities, such information may also include:
- Legal Name of Entity (if different from individual)
- Employer Identification Number (EIN)
- Registered Business Name/Disregarded Entity Name/Doing Business As (DBA), if any
- Registered address of entity
Why do I need to provide my Tax Identification Number?
Mercari requires tax identification numbers to verify that the owner of the Mercari account matches the information on record with the IRS and applicable state taxing authorities. This verification is also necessary to ensure that the 1099-K information associated with the Mercari seller account is properly reported to the tax authorities. If you’re not eligible for a social security number, you can provide an Individual Tax ID Number (ITIN). Please note that additional information may be requested after providing your Tax Identification Number.
How frequently will I need to update my W-9 information?
You will need to update and/or confirm your W-9 information once each applicable calendar year to sell on Mercari if you meet the IRS gross payments reporting thresholds. Mercari is not responsible for reminding you to update your W-9 information should your tax classification/information change.
When should I update my W-9 information?
Typically, your W-9 should be updated when a life event has occurred that affects your tax reporting information. Examples include, but are not limited to, a legal last name change, a change in your TIN (ITIN to SSN), or the formation of a tax classified entity that is separate from you (formation of a “C” corporation, etc.). If your mailing address has changed, it is important to remember to adjust your W-9 accordingly.
Why am I not given the option to provide a FATCA exemption code when completing my W-9?
The Foreign Account Tax Compliance Act (FATCA) requires certain foreign (non US) financial institutions to report all United States account holders that are specified as United States persons. Specified FATCA exemption codes are not applicable as Mercari does not currently permit the use of non-US bank accounts.
What is a backup withholding exemption code on the Form W-9?
Under certain conditions, payees may be exempt from backup withholding. Mercari requests and collects Form W-9s in order to file Form 1099-Ks, for those users who meet filing requirements. The three backup withholding exemption codes that are only available to eligible users and entity types are:
- An organization exempt from tax under section 501(a), any IRA, or a custodial account under section 403(b)(7) if the account satisfies the requirements of section 401(f)(2).
- The United States or any of its agencies or instrumentalities.
- A state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities.
I’m a sole proprietor. Can I use an EIN instead of my SSN?
Yes. When you complete the W-9 form, we will need your legal first and last name and SSN/ITIN, but you can also enter your “doing business as” (“DBA”) and EIN (which will be utilized instead of your SSN/ITIN).
I am an owner/member of a Single Member LLC (SMLLC). Can I use an EIN instead of SSN?
Yes. When you complete the W-9 form, we will need your legal first and last name and SSN/ITIN. If you have a single-member LLC that is a disregarded entity (meaning your SMLLC is treated as part of your own, individual income tax return), you may enter your EIN, if you have one. Per IRS requirements, do not enter the disregarded entity’s EIN. You may also enter your business, trade, or “doing business as” (“DBA”) as well. Please note that the IRS encourages that you use your SSN.