1099-K Reporting Policy and Disclosure Information

If a seller meets the threshold requirements for tax reporting in a calendar year, MX Locker will generate a Form 1099-K for the seller, file it with relevant taxing authorities, and provide the seller access to it (or deliver copies of it). These threshold requirements relate to reportable payment transactions under Internal Revenue Code 6050W.

1099-K reportable payment transactions include the following details for completed transactions:

• item price
• buyer-paid shipping
• associated sales tax
• merchant fees

A transaction completes on the date when a seller rates the order – or when MX Locker auto-rates the order after a prescribed period of time. This also marks the point when net sales proceeds are added to the seller’s MX Locker balance. The total gross amount does not include any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, or any other amounts after completion.

Some states have their own tax reporting thresholds. These could be different from the federal threshold mandated by the Internal Revenue Service. Whenever a seller meets the federal threshold, MX Locker will also file copies of Form 1099-K with state taxing authorities that have 1099-K filing requirements. Consult your tax advisor to determine any thresholds that may exist and apply to you in your state.

When you submit an electronic substitute Form W-9 through your MX Locker account’s Tax Center, you have the option to have 1099-Ks delivered electronically or by physical mail. The user has the ability to change their 1099-K delivery method preference for the reportable year, but this change must be made by January 7 of the year after meeting the Federal 1099-K tax reporting threshold. MX Locker must also process and accept this change by the same January 7 date. After that point, your changes, once accepted by MX Locker, will be reflected in the following calendar year. It is recommended to make any changes well in advance of January 7. (More details are included in the Disclosure Information section below.)

All Form 1099-Ks will utilize the unique MX Locker user account number that is generated – and permanently connected – to your account when you create it. All affiliated and attributable tax reporting information will be associated and reported exclusively at this account level.

If you discover an issue with your reported 1099-K, contact MX Locker via the Help Center . Provide details about the issue, so that we can work to correct your Form 1099-K.

If you have already submitted a Tax Identification Number for W-9/CIP purposes, the information should not be changed. (This is because MX Locker accounts are non-transferrable.) A change of Tax Identification Number can occur when you would like to change your account from an individual (using an SSN) to a business (using an EIN). In this case, the individual must be the owner of the business and be authorized to utilize the EIN. MX Locker may review the EIN and business information for confirmation. Likewise, you may switch from an EIN to an SSN if the business has been dissolved and you wish to continue selling under their own SSN. These are the only cases where the information can be changed.

Users cannot transfer account ownership to another individual.

MX Locker recommends you monitor unadjusted gross sales and transactions over the course of the calendar year. This information is in your Sales Report, available through the Seller Dashboard on MX Locker.com.

All tax documentation and statements provided by MX Locker do not constitute, nor should be construed as, legal or tax advice. Please consult your tax advisor, accountant, or the Internal Revenue Service for assistance in utilizing your Form 1099-K when filing tax returns.

MX Locker may hold, remit, and report user funds if it receives a government notice or as part of a government process.