Do I issue 1099-MISC or 1099-NEC to an LLC for products?

I am trying to identify if my vendors should be issued a 1099. If I know they are an LLC, but they were not providing consulting services, instead I bought equipment from them, do they still need a 1099?

795

Level 15

Jan 5, 2024 4:18:20 PM

Yes, you need to issue a 1099-MISC if you paid the LLC $600 or more during the tax year for equipment (not merchandise).

See https://www.irs.gov/instructions/i1099mec#en_US_202401_publink100044508

Level 2

Jan 5, 2024 4:22:10 PM

Thank you. So a snow mobile for $20k is equipment, but tires would be merchandise? What defines equipment from merchandise?

Level 15

Jan 5, 2024 4:36:24 PM

Merchandise is goods held for resale to customers in the ordinary course of business.

Level 2

Jan 5, 2024 4:47:44 PM

Thank you.

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Do I issue 1099-MISC or 1099-NEC to an LLC for products?