Bill Overview
Title: To delay the implementation of the modifications of exceptions for reporting of third party network transactions.
Description: This bill delays the implementation of a de minimis exception to the tax reporting requirements of third party network transactions for transactions not exceeding $600.
Sponsors: Rep. Miller, Carol D. [R-WV-3]
Target Audience
Population: People engaged in small-scale third-party network transactions
Estimated Size: 100000000
- The bill concerns delaying the implementation of tax reporting requirements for small third-party network transactions.
- A de minimis exception affects small transactions, which are common among individual sellers and small businesses using platforms like PayPal, Venmo, or Etsy.
- Individuals and small businesses worldwide using these payment platforms for income that may fall under this threshold could be impacted. This impacts anyone who relies on these platforms for receiving payments, international sellers, freelance workers, small scale online businesses, or those engaging in gig economy jobs.
Reasoning
- The target population includes individuals and small businesses engaged in low-value transactions using third-party network platforms. Many people in the gig economy and those conducting online businesses could be affected, as they frequently use payment services like PayPal and Venmo for transactions often considered small.
- This policy impacts primarily those whose transactions are below $600, potentially subjecting them to additional tax reporting requirements sooner than they might expect.
- While a vast number of users might be affected, not everyone will experience a significant change in their wellbeing. Some might notice only a minor administrative burden or no effect at all.
- A variety of perspectives should be considered, such as differences in transactional volume, reliance on these platforms for income, and personal capacity to manage tax complexities.
- Given the budget constraints, not all affected individuals will receive significant support or relief, limiting the breadth and depth of the policy's impact.
Simulated Interviews
Freelance Graphic Designer (New York, NY)
Age: 34 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 14/20
Statement of Opinion:
- I'm worried about the increased paperwork if the exception is delayed.
- It could mean more time filing reports, less time actually doing my work.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Etsy Shop Owner (San Jose, CA)
Age: 45 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- The delayed reporting would increase my stress around tax time.
- I'd potentially need more bookkeeping services, which means additional costs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 8 |
| Year 2 | 6 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 7 | 8 |
| Year 10 | 7 | 9 |
| Year 20 | 8 | 9 |
Rideshare Driver (Chicago, IL)
Age: 28 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 12/20
Statement of Opinion:
- It's just another thing to think about while I try to make ends meet.
- I'm concerned about what this means for my ability to save.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 8 |
Independent Consultant (Austin, TX)
Age: 57 | Gender: female
Wellbeing Before Policy: 9
Duration of Impact: 1.0 years
Commonness: 10/20
Statement of Opinion:
- I've simplified my tax submissions post-retirement, don't need more paperwork.
- I might have to rethink how I manage smaller jobs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 9 |
| Year 2 | 8 | 9 |
| Year 3 | 8 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
College Student / Part-time Influencer (Miami, FL)
Age: 23 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 13/20
Statement of Opinion:
- Small payments mean a lot to me, and extra reporting could complicate things.
- I'm not sure how this would fit into my busy school life.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 5 |
| Year 2 | 5 | 6 |
| Year 3 | 5 | 6 |
| Year 5 | 5 | 6 |
| Year 10 | 6 | 7 |
| Year 20 | 7 | 8 |
Online Retail Small Business Owner (Seattle, WA)
Age: 40 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 2.0 years
Commonness: 8/20
Statement of Opinion:
- I may need to adjust to new requirements, which could be a hassle initially.
- It's not clear how much additional income gets affected by the delay.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 10 |
Retired Farmer (Rural Georgia)
Age: 60 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 6/20
Statement of Opinion:
- Not sure if extra reports are applicable to my small sales, but still concerning.
- Livelihood isn't deeply dependent on digital payments, but I use it out of convenience.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 8 | 8 |
Part-time Photographer (Brooklyn, NY)
Age: 36 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 9/20
Statement of Opinion:
- There might be more to track and report, but it's something I've been preparing for.
- I strive to keep things organized, yet adapting may take some time.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 9 |
| Year 20 | 8 | 9 |
Gig Economy Worker (Los Angeles, CA)
Age: 50 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 15/20
Statement of Opinion:
- Managing more paperwork isn't ideal, but it's manageable.
- I've got to be proactive about changes to my income reporting.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
Yoga Instructor (Denver, CO)
Age: 29 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 1.0 years
Commonness: 11/20
Statement of Opinion:
- Any additional tax work could affect how I structure payments for my sessions.
- I prefer to keep things as streamlined as possible.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 9 |
| Year 20 | 9 | 9 |
Cost Estimates
Year 1: $200000000 (Low: $150000000, High: $250000000)
Year 2: $0 (Low: $0, High: $0)
Year 3: $0 (Low: $0, High: $0)
Year 5: $0 (Low: $0, High: $0)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The policy affects millions of small transactions but is primarily administrative in nature, meaning its economic impact is short-term and mostly affects tax revenue.
- The policy impacts are temporary, affecting only the year the implementation is delayed.
- Delays may necessitate system and procedural adjustments in tax administration, which can incur additional costs.