S. 1375: Stop the Nosy Obsession with Online Payments Act of 2025

This bill, titled the Stop the Nosy Obsession with Online Payments Act of 2025 or the SNOOP Act of 2025, aims to modify existing tax reporting requirements for third-party payment settlement organizations. Specifically, it seeks to reinstate a previous exception for what are termed de minimis payments, which refers to small sums that do not require reporting to the Internal Revenue Service (IRS).

Key Provisions

• Reinstatement of De Minimis Exception: The bill proposes that third-party settlement organizations will only need to report transactions if two conditions are met:
  • The total amount of payments for a participating payee exceeds $20,000.
  • The number of transactions for the participating payee exceeds 200.
• Application to Backup Withholding: The bill also amends how the thresholds for de minimis payments apply to backup withholding requirements, ensuring that payments must exceed similar reporting thresholds before they are classified as reportable.
  • A payment will only be deemed reportable if both the transaction count and aggregate amount exceed the thresholds established.
  • If a payment is reportable in one year, then the same rules will not apply in the following year for that payee if prior payments were already reportable.
• Effective Dates: The amendments outlined are to take effect as if they were included in prior legislation known as the American Rescue Plan Act, aligning with its starting date, while certain provisions related to backup withholding would apply starting from calendar years after December 31, 2024.

Overall, the bill aims to reduce the reporting burden on small transaction participants in online payment platforms by reinstating previous exceptions for low-value transactions.

Relevant Companies

• PYPL (PayPal Holdings, Inc.): As a major player in online payment processing, this bill could significantly affect PayPal by reducing the number of transactions they must report to the IRS, particularly for smaller payments which constitute a large part of online transactions.
• V (Visa Inc.): Visa may experience changes in how it processes and reports transactions, especially through their payment platform, which could make it more favorable for small businesses and individuals using their services.
• MA (Mastercard Incorporated): Similar to Visa, Mastercard would be impacted in its reporting obligations for low-value transactions, which may benefit users of their card services.