Walmart Marketplace: the tax ID and documents sellers need

What do sellers usually need?

1. A business entity

   Commonly an LLC or corporation. See how to start an LLC.

2. A business tax ID

   An EIN in the business's name. See what an EIN is.

3. A tax form

   Form W-9 for US sellers; eligible international sellers provide a W-8.

4. Business documents and bank account

   Formation documents, a business address and an account in the business's name.

5. Marketplace and catalog information

   Evidence of selling experience, products and fulfilment.

Walmart's exact criteria, including which countries international sellers can apply from, are set by Walmart and change over time. Check its seller application page before applying.

Keep copies of everything submitted, as Walmart may ask for updates later.

Why does the tax ID matter?

The name and tax ID on the application should match IRS records exactly, because Walmart verifies them and uses them for Form 1099-K. A mismatch can delay approval or trigger backup withholding requests. A single-member LLC using an EIN should complete the W-9 as the IRS instructions direct for disregarded entities. See Form W-9.

Use the same legal name everywhere: state filing, IRS records, bank account and Walmart application.

Who handles sales tax?

Walmart collects and remits sales tax on marketplace orders in states with marketplace facilitator laws, which covers nearly all states with a sales tax. Sellers do not collect on those orders, but may still need permits if they have other sales channels or physical presence in a state. See marketplace facilitator laws.

Orders shipped from your own warehouse still count as marketplace sales if placed on Walmart.com, so Walmart handles the tax on them too.

Keep Walmart's sales tax reports, as some states ask marketplace sellers to show which sales the marketplace already taxed.

How is income reported?

Walmart reports sellers' gross payments on Form 1099-K. Record gross sales, Walmart's referral fees, fulfilment and advertising costs, and returns separately in your books, and reconcile to the 1099-K at year end. See Form 1099-K and bookkeeping for marketplace sellers.

Some states require marketplaces to report sellers' payments at lower thresholds than the federal one, so a 1099-K can arrive even in a small first year.

What changes with Walmart Fulfillment Services?

Inventory stored in Walmart's US warehouses is still your inventory, so record it at cost and count it at year end. Stock in a warehouse in a state can create a physical presence there for some state taxes, even though Walmart collects sales tax on marketplace orders. For a foreign owner, US inventory and fulfilment can also be relevant to whether the business has a US trade or business. See physical vs economic nexus.

What does a monthly entry look like?

A seller's monthly settlement shows $15,000 of sales, $600 of returns, $1,800 of referral fees, $1,200 of fulfilment fees and $900 of advertising, with $10,500 paid out. The journal records sales, returns and each cost separately, with the payout as a transfer to the bank, and cost of goods sold for the products sold from inventory.

What about sellers outside the US?

Walmart accepts sellers from some countries outside the US, under its own criteria. A non-resident who sells through a US LLC applies as a US business with the LLC's EIN and W-9. US income tax for the owner then depends on whether the business has a US trade or business, for example through US inventory or staff. See selling on US marketplaces as a non-resident.

This guide is general information. It is not tax or legal advice for your situation.