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MIAMILAW1127, Attorney
Category: Business Law
Satisfied Customers: 755
Experience:  Founding Partner at Moises Law, P.A.
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I have an LLC in Texas, we own online dart boards and have

Customer Question

I have an LLC in Texas, we own online dart boards and have leagues and tournaments online. The boards connect to other boards in other states. Players in other states pay fees to play in the leagues and tournaments. The boards in other states are owned by individuals in those states, we only own the boards in Texas. Once the fees are collected by the owners in the other states at the end of the tournament or league the fees are sent to us and we redistribute the fees to the players in the other states as prizes. We do not keep any of the money it is all given back to the players. My question is do we have any tax liability on the money collected and then sent back to the players? I believe we may need to give 1099s to the players if they reach a certain threshold of earnings each year. Any advice you can give me would be greatly appreciated.
Submitted: 1 year ago.
Category: Business Law
Expert:  MIAMILAW1127 replied 1 year ago.
Hello. Thank you for contacting me. I am a consultant here and I am looking forward to assisting you with your question. If at any point any of my answers aren’t clear please don’t hesitate to ask for clarification. Please be patient as I will be typing my responses to you from scratch. Also, I can only answer/address the questions you ask specifically based on the information your provide. Please try to provide as much information as possible so I can best assist you. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms. You do not have any tax liability if you are basically running the company and the company is not profiting from these ventures. If the money goes in and back out to the other players, then it is never income that you are required to pay taxes on. However, these would be considered earnings to the players and they would need to declare these similar to gambling earnings. I hope this helps. Please use the SEND or REPLY button to keep chatting, or please RATE when finished. You may always ask follow ups at no charge after rating. Thank you.
Customer: replied 1 year ago.
If the company were to have income that did not go out. If we had a membership fee for the players in the different states and we kept that fee it would be income to us and we would pay taxes in Texas. What about the states where these players are from since the fee originated in their state and came to us in Texas would we owe taxes in those states.
Expert:  MIAMILAW1127 replied 1 year ago.
That would be income and you would need to pay taxes in Texas.