CafePress Changes
I just received an e-mail from CafePress stating there were changes to the shopkeeper’s agreement. Reading the overview of the changes, it appears this is a major change.
Section 2.2 – We are now requiring a tax identification number when you open a shop.
and
Section 7.1 – We will withhold any commissions due to you until you have provided us with a valid tax identification number.
Unless I am missing something, the average Joe can no longer open a CafePress shop as he will need a tax number most do not possess. Furthermore, those of us with shops already will not be able to make money off the shop until he comes up the tax ID number.
This is huge!
I do not run my shops for profit so I assume I will be able to continue without issue. But many folks/groups do charge a profit on items sold. What will happen to them?
Won’t this render CafePress useless? Other than Groundspeak selling a few items through it, most I know who use CafePress are individuals and small groups looking to print short runs of items. If those folks can no longer make a profit off the sales, who will use CafePress?
Am I misreading this?
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By Morton Fox on Apr 11, 2007
It’s not a big problem, but they should have explained that if you have a Social Security Number, that can be used as a Tax ID Number too.
By Bob on Apr 11, 2007
Do you have a reference for using a SS # in lieu of a tax ID#? Also, how comfortable are you in giving up the SS # to do business with CafePress? I amnot comfortable with that whatsoever.
By flowers22 on Apr 11, 2007
Indeed your SS# is your tax ID number and I am NOT comfortable putting it out there.
We are no longer ‘leaders’ in Boy Scouts because they require a SS#…which we won’t povide. I have been emailed all the SS#s of my son’s Jamboree troop (kids & adults) ‘by accident’ and I have been emailed all the SS#s of another son’s NROTC unit ‘by accident.’ In this day where we need to protect our identities more than ever, people are silly for giving out the SS#s without absolute need.
By Bull Moose on Apr 11, 2007
But this seems like it would be a place where there is a legitimate purpose for giving cafepress your SS#: Commissions from cafepress are income and need to be reported on your income tax. This is analagous to giving your SS# to your employer.
Of course, some of us have little confidence in how our employers handle our SS#.
I’d bet dollars to donuts this is the result of pressure on CP from some governmental entity (or an overprotective legal department.)
By Bob on Apr 11, 2007
I make money when I hold a yard sale. The city doesn’t get my SS#. Do you provide the SS# at ebay?
The back of my SS card said it was not to be used for identification. How does a business rate knowing it to do business with them?
By Bull Moose on Apr 12, 2007
eBay and a yard sale are different models than cafepress. Neither eBay nor the city (nor any other business you are just “doing business” with) cuts you a check.
I believe most casinos won’t pay out winnings over a certain amount without presenting a SS#.
As for not using your social security number for ID, try not writing it on your 1040 and see how well that goes over. That line was passed long ago for worse or for worser.
By Bob on Apr 12, 2007
Agreed that the government requires it. Since they have issued it, I am less concerned there. Banks require it too. As does my employer. All that is tied into my SS benefits somewhat.
CafePress is requiring the number for all new accounts, whether they are going to cut you a check or not. Trust me, I never got money from CafePress for my shops. Why the hell do they need my SS# to open a store?
I have had lots of businesses cut me checks without ever knowing my SS#. Lowes wrote me two checks for a couple hundred bucks each recently. They know my address, not my SS#.
Let’ssay you run a local geocaching organization. You sell T-shirts, mugs, decals, etc. through CafePress. Whose SS# are you going to associate with your CafePress account now?
By Bull Moose on Apr 12, 2007
Was the check from Lowes income? As opposed to a refund or a rebate?
7.1 makes the purpose pretty clear to me. If they are paying commissions, it doesn’t matter if they are an internet t-shirt company or a real estate broker, someone is supposed to pay taxes on that commission.
I guess if I were in an organization and no one wanted to use their SS#, we could get a tax ID number, which would make things a little more complex, or bite the bullet and find someone else to work through. (Until this issue catches up with them.)
I think you’re right, that this may hurt CP’s business. But I also think it is another example of the days of the internet as the wild west coming to an end.
By Bob on Apr 12, 2007
I think you are correct about taxing the commission. But we certainly do not apply that to all taxable transactions. You are supposed to pay and report the sales tax on out-of-state purchases. When someone buys something in Delaware (no tax) no one requests his SS#. And if they did, I bet most sales would not be completed.
If one were using CafePress as a real business (Groundspeak, for instance), I certainly understanding the need to report the commissions. As I state originally, most I know use it for convenience. They pay the higher per item cost for the flexibility of a short run. If they jack the price up a couple bucks, it goes toward offsetting some other small fees they may get.
The casinos will make you file for large payouts, but not small ones. When I win a couple hundred at the table, no one knows. How many CafePress shops are earning a couple hundred bucks? I suggest a minority of them.
If an organization does rely upon an individual’s SS# (a local geocaching org, for example) would there be an issue for all the other members/cachers in the area? A few orgs I know actually have bylaws and are incorporated. Most put together a logo and mounted a web site and call themselves “official”. It seems that an individual’s SS# being used to do business on behalf of the org might cause a problem.
By Bull Moose on Apr 12, 2007
Well, like I said, this very well could be the product of an overly paranoid legal department worried about the IRS showing up and asking them why they aren’t reporting commission payouts.
I’m going to ask some of my tax law obsessed classmates what they think about this because now I’m curious.
By Bull Moose on Apr 12, 2007
But I still say I don’t necessarily think that this is an unreasonable request.
By Bob on Apr 12, 2007
I think it is unreasonable to require me to fork over my SS# so I can purchase stickers to affix to ammo boxes or give a T-shirt to someone as a prize. Because I want to design the items myself, I have a shop. If you wanted to open a shop to do the same thing today, you would need to provide your SS# (are we certain that is an alternative to the tax ID #?). Is that reasonable?
CafePress is free to do what it wants in this regard as far as I am concerned. I am wary, however, of anyone who requests my SS#. I balked at providing my union with the number to access the web site. Why would they possibly need my SS# to access a web site my dues pays for? Likewise, CafePress will never get my SS#. If it means I take my business elsewhere, then so be it.
As long as folks continue to provide their SS# as identification, the more it will be used as identification.
By Morton Fox on Apr 12, 2007
You asked way back in the comments but I haven’t responded yet. The reference for SSN being used as a TIN is the instructions for Form W-9.
By Bull Moose on Apr 12, 2007
I will agree that CP didn’t handle this well.
It seems like a better way to handle this situation would be to let people open and run shops, but withhold any payments until the SSN or TIN is forked over.
By Bob on Apr 12, 2007
Thank you for the reference. Here is Form W-9.