A new law will require ticket reselling platforms to hand over the data of all sellers who make more than $600 to the IRS.
Concert ticket prices have skyrocketed in recent years, and the resale market has soared to even greater heights along with it. While some have been able to lock in their tickets to see their favorite artists, sports teams, or other shows during initial sales, the onslaught of opportunistic scalpers and bots, along with other issues like website outages due to high demand, have effectively turned the resale market into a frenzy.
This summer saw two of the most hotly desired tours, Beyoncé’s Renaissance and Taylor Swift’s Eras, fall victim to issues surrounding their initial sales, causing outrage from fans whose only option became the resale market with heavily inflated prices, sometimes reaching over $1,000. That uproar caught the attention of the US Government, which was already looking into hidden fees on ticketing platforms, and the Internal Revenue Service (IRS) has enacted a new tax law regarding ticket resales.
The Wall Street Journal reported that the new IRS law will require companies like Ticketmaster, StubHub, TicketIQ, SeatGeek, and more to provide a report on customers who sold more than $600 in resale tickets in 2023. If a reseller meets or exceeds that number, a Form 1099-K needs to be filed to report that income so that it can be taxed accordingly. Other than the lowered threshold, there are no changes to what counts as income or how the tax is calculated.
Originally, this form would only need to be filled out by resellers who reached a threshold of $20,000 in revenue and more than 200 transactions. This rule change stems from a provision of the American Rescue Plan Act that was already planned to go into effect in 2023 after being delayed during the 2022 tax year by the Biden Administration to give the IRS more time to prepare.
While the lowered threshold will seemingly be in effect for the 2023 tax season, political opposition to the new IRS law from lawmakers in Congress has already begun. The Small Business Jobs Act was introduced to restore the old threshold by the House Ways and Means Committee earlier this year but has not moved forward. Additionally, a new bipartisan bill called the Red Tape Reduction Act would increase the threshold to $10,000 in revenue and 50 transactions.
Stay tuned for more updates on the impact of this new IRS law.