Sales Tax & 1099-Ks, in plain English
Two topics that generate more worry than they deserve. Here is what actually happens, for buyers and for sellers.
Buyers: why is there tax on a used part from a private seller?
Because state law says so — not because anyone chose to add it. Under the marketplace-facilitator laws most states passed after the Supreme Court's South Dakota v. Wayfair decision (2018), an online marketplace is required to calculate, collect, and send in sales tax on behalf of its sellers, whether the item is new or used and whether the seller is a business or an individual clearing out a parts shelf.
We currently collect sales tax on orders shipped to Georgia, where we hold an active registration, and we add states as the law requires us to. The rate is set by the state and locality your order ships to (a local-pickup order is taxed at the seller's location, where the goods change hands), it's calculated automatically at checkout, and it's shown as its own line before you pay. If no tax line appears on your order, none was required — nothing is hidden in the price.
The tax goes to the state. It never goes to the seller, and it isn't a SiliconExchange fee.
Sellers: you never touch sales tax. At all.
There is nothing to configure, nothing to collect, nothing to file, and nothing to send anywhere. As the marketplace facilitator, SiliconExchange calculates the tax, charges it to the buyer on top of your price, and remits it to the state. Your listing price and your payout are exactly what they would be if the tax didn't exist.
And our fee is never computed on the tax. Your seller fee is based on the item price plus shipping only — the sales tax we collect from the buyer is excluded from the fee base. That's written into our Terms (§4.3), not just this page. Some marketplaces charge their payment processing percentage on the tax-inclusive total, so sellers pay fees on money that was never theirs; we deliberately don't.
The 1099-K, without the panic
A Form 1099-K is an information report that payment platforms are required to send to high-volume sellers and to the IRS. For the 2026 tax year, the federal threshold is more than $20,000 in gross sales and more than 200 transactions on the platform. A handful of states set lower thresholds for their own copy of the form, so some sellers receive one below the federal line.
Receiving a 1099-K does not mean you owe tax on that amount. The form reports unadjusted gross — every dollar that moved, before fees, shipping costs, refunds, or what you originally paid for the hardware. Most individuals selling their own used parts sell for less than they paid, and a personal item sold at a loss generally doesn't produce taxable income (though the rules on reporting it still apply). What you actually owe depends on your whole situation — that's a question for a tax professional, not a marketplace.
If you approach a reporting threshold, the taxpayer-information collection happens through Stripe, our payment partner, which files the form. Keep your details current there and nothing interrupts your payouts.
Tax-exempt buyers: resellers and nonprofits
If you buy for resale with a valid reseller certificate, or you purchase for a tax-exempt organization, email a copy of your certificate or exemption letter to support@siliconexchange.io before you order and we'll review it and set up your account. We can honor exemptions only in the states where we're the party collecting the tax.
Tax law changes frequently and applies differently to different people. This page explains how SiliconExchange operates — it is not tax or legal advice, and for questions about your own taxes you should talk to a qualified professional.