Taxes / State tax rules / Virginia
Selling on eBay, Poshmark or Etsy from Virginia: sales tax and 1099-K rules
On a marketplace sale to a Virginia customer, a marketplace facilitator over $100,000 or 200 Virginia transactions is the dealer and collects the sales tax, no marketplace seller may collect tax on those sales, and a seller whose Virginia sales all go through facilitators does not need to register. Virginia has its own 1099-K rule: Va. Code § 58.1-356 uses the Form 1099-MISC thresholds instead of the federal 1099-K test for payees with a Virginia mailing address, and Virginia Tax says a platform that paid a Virginia payee $600 or more files a 1099-K for that payee with Virginia Tax, though the IRS now puts the 1099-MISC threshold at $2,000 for tax years after 2025.
General information, not tax advice. Check with a tax professional about your own situation.
Checked against the official pages listed below on .
Virginia in short
- General sales tax:
- Yes
- Marketplace facilitator law:
- Yes: Va. Code § 58.1-612.1 (2019 Acts, chs. 815 and 816), since Jul 1, 2019
- When a marketplace must collect:
- facilitating Virginia sales that generate more than $100,000 in gross revenue, or 200 or more separate retail sale transactions, in the previous or current calendar year
- Form 1099-K:
- State threshold: a third-party settlement organization paid $600 or more to a Virginia payee, or to a payee at a Virginia mailing address
Who collects the tax on a marketplace sale
A marketplace facilitator over the threshold is considered a dealer and collects the tax on all transactions it facilitates, and § 58.1-612.1(D)(2) says no marketplace seller shall collect sales and use tax on those transactions. Virginia Tax must grant a waiver if all of a facilitator's sellers are registered dealers, or for a seller with its own nexus where collection by the facilitator would be an undue burden.
If you sell only through marketplaces
Virginia Tax says a seller whose Virginia sales are all conducted through a facilitator's platform is a marketplace seller and does not need to register to collect Virginia sales tax. A seller with direct sales counts only those direct sales toward the $100,000 or 200-transaction test (§ 58.1-612.1(H)) and, if over, files returns for its direct sales only.
Registration, resale certificates and what changes when you also sell direct have their own page: Virginia: seller's permit and resale certificate rules.
The law: Va. Code § 58.1-612.1 (2019 Acts, chs. 815 and 816), effective .
"No marketplace seller shall collect sales and use tax on a transaction made through a marketplace facilitator's marketplace."
"If all of your sales in Virginia are conducted through a marketplace facilitator’s platform, you are considered a "marketplace seller" and do not need to register to collect Virginia sales tax."
Sources: § 58.1-612.1, Tax collectible from marketplace facilitators; "marketplace facilitator" defined; Remote Sellers, Marketplace Facilitators, Economic Nexus; Guidelines for Remote Sellers and Marketplace Facilitators (PD 20-43).
Virginia's sales tax
Virginia Tax lists a 5.3% general sales tax rate everywhere except regions with higher combined rates: 6% in Central Virginia, Hampton Roads and Northern Virginia, 6.3% in eight counties and cities, and 7% in James City County, Williamsburg and York County. Groceries and personal hygiene items are taxed at 1% statewide.
Sources: Retail Sales and Use Tax.
Form 1099-K: Virginia and the federal test
The statute has third-party settlement organizations report to Virginia Tax, and to payees with a Virginia mailing address, using the § 6041(a) limits that apply to Form 1099-MISC in place of the federal 1099-K limits of § 6050W(e). Virginia Tax's withholding page, re-read October 19, 2026, puts that at $600 or more and says platforms may have to file 1099-Ks with Virginia that the IRS does not require. The IRS's 1099-MISC instructions say that minimum threshold increased to $2,000 for tax years beginning after 2025, so ask Virginia Tax which figure applies to 2026 payments.
| Test | Dollar amount | Transactions | Wording |
|---|---|---|---|
| Virginia | $600 | No count | a third-party settlement organization paid $600 or more to a Virginia payee, or to a payee at a Virginia mailing address |
| Federal (IRS) | Over $20,000 | More than 200 | Over $20,000 in more than 200 transactions, through one app or marketplace in a calendar year |
"If your business is a third-party settlement organization and paid $600 or more to a Virginia payee, or to a payee at a Virginia mailing address, you will also need to file a Form 1099-K for that payee"
"the de minimis limitations of § 6041(a) of the Internal Revenue Code shall apply in lieu of the de minimis limitations of § 6050W(e) of the Internal Revenue Code."
Rule: Va. Code § 58.1-356(B). Applies from: reportable payment transactions made on or after January 1, 2020.
The federal test, for comparison: the IRS says a payment app or online marketplace must send a Form 1099-K when payments for goods or services total over $20,000 in more than 200 transactions, and adds: "However, they may send you a Form 1099-K with lower amounts and/or transactions." (Understanding your Form 1099-K, reviewed ). The Instructions for Form 1099-K count both parts for the calendar year, through each platform separately, and say the box 1a gross amount is figured without adjustments for credits, discounts, fees, refunds or shipping, so a 1099-K figure is not the same as profit. More on the federal rule in Form 1099-K for resellers.
Sources: Withholding Tax; § 58.1-356, Reporting of payments by third-party settlement organizations; Tax Bulletin 20-10, Virginia Form 1099-K Filing Requirements (October 30, 2020); Instructions for Forms 1099-MISC and 1099-NEC (Rev. 12/2026); § 58.1-301. Conformity to Internal Revenue Code.
Worked examples
Tax on a $40 marketplace sale to Roanoke
Outside the higher-rate regions Virginia Tax lists, the general rate is 5.3%, so a $40.00 taxable item carries $2.12, collected by the facilitator. In Northern Virginia, at 6%, it would be $2.40.
A Virginia 1099-K where the IRS would require none
A seller with a Virginia mailing address is paid $2,500 for 90 sales on one platform in 2026. The federal test requires a 1099-K only over $20,000 in more than 200 transactions, but $2,500 is above both the $600 figure on Virginia Tax's page and the $2,000 figure the IRS gives for tax years after 2025, so either way Virginia Tax's rule calls for a 1099-K for that payee.
Direct sales only count toward the seller's test
A seller makes $150,000 of Virginia sales through marketplaces and $40,000 in 150 orders through its own website. Under § 58.1-612.1(H), only the $40,000 and 150 direct transactions count, which is under both $100,000 and 200, so the registration test is not met.
Edge cases and details
- Va. Code § 58.1-356(B) ties Virginia's 1099-K test to the § 6041(a) thresholds used for Form 1099-MISC, which Tax Bulletin 20-10 (2020) put at $600. The IRS's instructions for Forms 1099-MISC and 1099-NEC (Rev. 12/2026) say that minimum threshold increased to $2,000 for tax years beginning after 2025, yet Virginia Tax's withholding page still said $600 on October 19, 2026; which figure Virginia applies depends on Virginia law, so ask Virginia Tax or a tax professional.
- Virginia's conformity statute, Va. Code § 58.1-301(B), reads references to federal income tax law in the income tax chapter, where § 58.1-356 sits, as the federal law as it existed on December 31, 2025, and its list of exceptions, as read October 19, 2026, doesn't mention § 6041. Virginia Tax's withholding page still gave $600 the same day, so ask Virginia Tax which figure it applies to 2026 payments.
- A facilitator is the sole entity Virginia Tax audits for marketplace collection, unless its error came from incorrect seller information or the seller holds a waiver, under § 58.1-612.1(F).
- Virginia Tax's guidelines (PD 20-43, issued June 26, 2019) say a dealer that newly meets the threshold registers and begins collecting no later than 30 calendar days later.
- Virginia Tax notes it does not need W-2s or 1099s filed with it when there is no Virginia withholding, but treats Form 1099-K separately: a business required to file a 1099-K with the IRS also files a copy for Virginia taxpayers or payees with a Virginia mailing address.
What to do
- If you have a Virginia mailing address, a platform may send you a Virginia 1099-K well below the federal test ($600 or more on Virginia Tax's page; ask Virginia Tax whether $2,000 applies to 2026 payments). Compare it with your sales records and check with a tax professional about how it fits your return.
- If you sell direct as well as on marketplaces, count only direct Virginia sales and transactions against the $100,000 and 200 tests.
- Do not add Virginia tax yourself on marketplace orders; the statute says marketplace sellers shall not collect it on those transactions.
Common questions
What is Virginia's 1099-K threshold?
Virginia Tax's withholding page says a third-party settlement organization that paid $600 or more to a Virginia payee, or a payee at a Virginia mailing address, files a 1099-K for that payee with Virginia Tax. The statute ties this to the Form 1099-MISC thresholds of IRC § 6041(a), which the IRS says increased to $2,000 for tax years beginning after 2025, and Virginia's conformity statute (§ 58.1-301) follows federal tax law as it existed on December 31, 2025; check with Virginia Tax which figure it applies to 2026 payments.
Do I need to register in Virginia if I only sell on marketplaces?
No, according to Virginia Tax: if all your Virginia sales go through a marketplace facilitator's platform, you do not need to register to collect Virginia sales tax.
When did Virginia marketplace facilitators start collecting?
July 1, 2019, under House Bill 1722 and Senate Bill 1083 (2019 Acts, chapters 815 and 816).
Can a marketplace get out of collecting Virginia tax?
Only by waiver: Virginia Tax grants one if all the facilitator's sellers are registered dealers, or for a seller with its own nexus where collection by the facilitator would be an undue burden.
Related
- Every state on one table: sales tax, marketplace facilitator laws and 1099-K rules
- Virginia: seller's permit and resale certificate rules
- Vermont: sales tax and 1099-K rules
- Washington: sales tax and 1099-K rules
- Form 1099-K for resellers: the federal test
- Do eBay's fees apply to the sales tax a buyer pays?
- Where each selling app keeps its sales report
General information, not tax advice
This page summarizes Virginia's own published pages and statutes as read on , and the IRS's 1099-K pages. It doesn't say what you should file, register for or pay. Rules depend on your situation and change: check with a tax professional, or with the state's revenue department.
Sources
Official pages this page is built from, with the day each was read.
- Virginia General Assembly (Code of Virginia): § 58.1-612.1, Tax collectible from marketplace facilitators; "marketplace facilitator" defined; read . Thresholds, dealer status, seller may not collect, waiver, audits, direct-sales rule.
- Virginia Tax: Remote Sellers, Marketplace Facilitators, Economic Nexus; read . Marketplace-only sellers need not register; direct-sales filing; waivers.
- Virginia Tax: Guidelines for Remote Sellers and Marketplace Facilitators (PD 20-43), dated ; read . July 1, 2019 start under 2019 Acts chs. 815 and 816; 30-day registration.
- Virginia Tax: Retail Sales and Use Tax; read . 5.3%, 6%, 6.3% and 7% rates; 1% grocery rate.
- Virginia Tax: Withholding Tax; read . $600 Form 1099-K rule, February 28 payee copy, 1099-K copies.
- Virginia General Assembly (Code of Virginia): § 58.1-356, Reporting of payments by third-party settlement organizations; read . § 6041(a) limits for payees with a Virginia mailing address, from January 1, 2020.
- Virginia Tax: Tax Bulletin 20-10, Virginia Form 1099-K Filing Requirements (October 30, 2020), dated ; read . Rule applies to payments on or after January 1, 2020; 30-day filing.
- IRS: Instructions for Forms 1099-MISC and 1099-NEC (Rev. 12/2026), dated ; read . Information return threshold increased to $2,000 for tax years beginning after 2025, inflation adjustment from 2027.
- Code of Virginia (Virginia General Assembly, Legislative Information System): § 58.1-301. Conformity to Internal Revenue Code; read . Income tax chapter references to federal tax law mean the law as it existed on December 31, 2025, with listed exceptions (none for § 6041).
- IRS: Understanding your Form 1099-K, reviewed . The federal 1099-K test.
- IRS: Instructions for Form 1099-K, reviewed . Both parts of the federal test counted for the calendar year.
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