Overview

Mercado Sales complies with U.S. federal and state tax reporting requirements under
Internal Revenue Code 6050W. When a seller meets the annual threshold requirements
for reportable payment transactions in a calendar year, Mercado Sales will generate a
Form 1099-K, file it with the appropriate tax authorities, and provide the seller with
access to the form (electronically or by mail).

Reportable Amounts (Calendar Year 2024 Example)

The total gross reportable payment amount for 1099-K purposes includes:

Item price

Buyer-paid shipping

Applicable sales tax

The following are not included in 1099-K totals:

Service fees charged to buyers

Payment processing fees charged to buyers

A transaction is considered complete once the seller rates the order or when the system
auto-rates the order after the designated period. At this point, net proceeds are added to
the seller’s Mercado Sales balance.

State Thresholds

Some U.S. states may have their own tax reporting thresholds, which can differ from
federal requirements. Whenever a seller meets the federal threshold, Mercado Sales
will also submit 1099-K information to state authorities where required. Sellers are
advised to consult a tax advisor to understand applicable thresholds in their state.

W-9 & Delivery Method

Sellers must submit a valid Form W-9 through their Mercado Sales account (Tax
Center).

Sellers may choose whether to receive 1099-K forms electronically (PDF) or by physical
mail.

Changes to the delivery preference must be made by January 7 of the following year
after meeting the reporting threshold. Any changes accepted after this date will apply to the next tax year.

Account & Identification Information

Each Mercado Sales account has a unique identifier that is permanently linked to all tax
reporting.

Tax Identification Numbers (SSN or EIN) may only be changed in specific cases:

Switching from individual (SSN) to business (EIN) if the seller is the business owner.

Switching from business (EIN) to individual (SSN) if the business is dissolved.

Account ownership cannot be transferred to another person.

Access & Corrections

Sellers can view their annual Sales Report via the Seller Dashboard to track gross
sales.

If you notice an error in your 1099-K, contact Mercado Sales Support with the details so
corrections can be made.

Consent & Withdrawal of Consent for Electronic Delivery

Consent to electronic delivery remains effective until withdrawn.

Sellers can withdraw consent by:

Resubmitting a W-9 through the Tax Center and choosing mail delivery

Submitting a support request through Mercado Sales Help Center

Sending a written request (by email or mail) to Mercado Sales Tax Department

Requests must include:

Mercado Sales account username

Account ID

Email address

Legal name

Statement requesting withdrawal of consent for electronic delivery

Withdrawal requests must be received and processed by January 7 to apply to the prior
year. Otherwise, changes will apply to the following year.

Electronic Form Delivery

Electronic 1099-K forms will be provided in PDF format and can be accessed via
browser or PDF reader software (e.g., Adobe Acrobat).

Sellers must ensure their account contact information is current to avoid delays.

Disclaimer

All tax forms and statements provided by Mercado Sales are for compliance purposes
only and do not constitute legal or tax advice. Sellers should consult their own tax
advisor, accountant, or the IRS when preparing tax filings.

Mercado Sales may be required to hold, remit, or report seller funds if directed by
government authorities.