Taxes: Sales Tax & 1099s

1099s & income reporting (automatic)

Because Stripe processes the payouts on your marketplace, Stripe is also the system of record for your sellers' tax forms. You don't generate or file anything for them.

• For US sellers, Stripe issues a 1099-K when they cross the current IRS reporting threshold, emails it to them directly, and posts it in their seller dashboard.
• Sellers find their forms under Seller dashboard → Finance → Tax documents (a secure tax-document area powered by Stripe).
• EU and UK sellers get the local equivalents handled the same way.
• You handle your own business taxes on your commission as normal - that part is just regular business income.

Sales tax on purchases (not added by default)

Unless you switch on collection (see below), Prometora does not add sales tax or VAT on top of the price at checkout. In practice this means:

• Prices are tax-inclusive - the listed price is the final price the buyer pays.
• There is no extra tax line calculated or added during checkout.
• Each seller is responsible for any sales tax or VAT they owe on their earnings.
• A VAT-registered seller can turn on invoices in their own settings and enter the rate included in their prices; their booking invoices then show the VAT included (Net / VAT / Total), with the price unchanged.

This is the same approach the major no-code marketplace platforms take, and it keeps checkout fast - buyers aren't asked for a billing address just to calculate a tax rate.

When does collecting sales tax become relevant?

In the US, marketplace facilitator laws can eventually make the platform (you) responsible for collecting and remitting sales tax - but only once you cross a state's economic nexus threshold. These thresholds vary by state - most commonly $100,000 in annual sales into that state (some states also count transactions, such as 200 sales a year, though many are now phasing that part out). The Sales Tax Institute keeps a free, regularly updated economic nexus state guide with the current threshold for every state.

• Below those thresholds (where most marketplaces sit at launch and for a good while after), neither you nor most of your individual sellers are required to collect sales tax.
• As you scale into those thresholds, you register to collect in the relevant states and switch on collection below. A marketplace based in a state with a marketplace facilitator law (Florida, for example) can be required to collect on orders shipped into that state from the first sale, with no threshold - ask your accountant.

Collecting sales tax with Stripe Tax (opt-in)

When you are registered to collect, switch on Store Settings → Payments → Commission & Fees → Collect sales tax with Stripe Tax (Business plan and up). From then on:

• Stripe Tax picks the rate per order from the buyer's delivery address (or billing address when nothing ships), including county and city rates, and adds it as its own line on top of the price. Buyers outside the states you are registered in see no tax.
• The tax stays with you. It lands on your Stripe balance for you to remit and is never part of a seller's payout, so sellers are paid exactly as before. Your sales emails and the Orders tab show it as a separate row, and the order export has a tax column.
• Refunds give the tax back to the buyer from your balance, and Stripe Tax records the reversal in your reports by itself.
• It applies to purchases (Buy now, cart, custom offers, approved purchases), not to bookings, and tax is always added on top, never included in the price.

Setting it up, step by step

Three steps, about ten minutes. The first two are in your Stripe dashboard, the last one in Prometora. Your Stripe account is the one you connected under Stripe Setup on the Payments tab.

Step 1: confirm your head office in Stripe

Open Stripe → Settings → Tax (Business information). Under Head office, click Confirm head office address, check that the address is your business address, and confirm. This is the only field Stripe needs here. The rest of the page can stay on its defaults:

• Preset product category: leave it. Prometora sets the category on every line of every order itself (goods, shipping), so the preset is never used for marketplace orders.
• Taxes on shipping: leave "Determine automatically".
• Include tax in prices: leave "Automatic". Prometora marks every line as tax added on top, and that wins over the default.

Step 2: add a registration for each state you collect in

Open Stripe → Tax → Overview (the locations list; the same registrations are also under Tax → Registrations) and click Add registration. Then:

1. Choose the state (for example Florida).
2. Choose I've already registered. The other two options start a registration process with the state; you already have your license.
3. Registration type: Sales tax.
4. Start collecting immediately, or schedule it for the date your license took effect.
5. Confirm. Repeat for every state you are registered in. Tax is only ever charged in a state that is on this list.

Step 3: switch it on in Prometora

Go to Store Settings → Payments → Commission & Fees, switch on Collect sales tax with Stripe Tax, and click Save. Prometora checks with Stripe that Tax is active before saving. If Stripe still reports it as pending, the reason is shown under the switch (it is almost always the head office address or a missing registration) and nothing is saved until it is fixed. If you later deactivate Stripe Tax, checkout continues without tax and a warning is logged.

Then place one order to yourself with a delivery address in a registered state and check the tax line at checkout, on the order confirmation, and in the Orders tab. Refund it afterwards: the refund and its tax reversal both show up under Stripe → Tax → Transactions. Note the Stripe Tax fee: Stripe charges it per taxed order to your Stripe account, not through Prometora; the current price is shown when you activate Tax. Stripe's own guide: Set up Stripe Tax.

What your sellers see

Sellers don't need to do anything special to get their tax forms. Inside their dashboard:

For more on how sellers get connected to Stripe in the first place, see How Sellers Connect Stripe, and for the overall money flow and commission split, see Payments & Stripe.