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Since sales to a contractor do not generate payments from you to the contractor, the contractors should not be issued 1099 forms. Therefore, you not only do not need to issue 1099 forms to them but need not be concerned about the Misc direct sales box. However, if you have sales people who are paid on a commission and receive 1099 forms for their payments you are required to issue the 1099 forms to them for their commissions. Then you will also need to complete this box. I agree that the phrase "consumer products" is a vague one at best but recommend completion of the box rather than get into a legal battle with the IRS. The reason you have had varying answers is this lack of specific definition. It will be much easier to comply than to fight this since the box entries do not reflect on the payees tax returns.
these products are an incidental part of a trade that consists of rendering services per section 31.3508-1 (f)
does this need to be reported in line 7 with box 9 checked
this is what i need answered....
we are like lowes.....they are not issuing 1099's per th general manager here...why would we have to?
this is not helping me....i know about payments of $600+ to contractors. i'm talking about the new law regarding direct sales of at least $5000 of consumer products to a buyer for resale anywhere other than a retail establishment box 9 on 1099. page 7 on 2012 1099 instructions
Hi, this is a different expert replying to your question. I think there is some confusion about "direct sales" as in direct marketing. If you are selling your inventory supplies to other contractors for resale, and the amounts of the sales are greater than $ 600 in a year, report the total amounts as non-employee compensation in box 7.
i'm running into the same problem that i started with.
this so i'm done here.
no questions were answered that provided any new info.