Who was responsible for sales tax on Costco Next sales?

Orders were completed on the brand's own site, with the brand taking payment and shipping, so the brand was generally the seller and collected and filed sales tax under each state's rules, registering where it had economic nexus or inventory. Your agreement with Costco governs the details.

Who handles returns on Costco Next sales now?

Costco has sent members to the brands, so returns and warranties stay with the brand. Accrue a liability from return history; for tax, the costs are generally deducted when they occur, so track the timing difference separately.

How can a former Costco Next brand keep reaching Costco members?

By becoming a Costco supplier to warehouses or costco.com. There is no public application; non-food prospects contact the Issaquah corporate office and food prospects a regional office. As a supplier you are a wholesaler: sales for resale, no 1099-K, and payments net of deductions to be rebuilt gross in the books.

Costco Next Closed: Tax and Accounting Wind-Down for Brands

Q: Is Costco Next still available?

No. Around early September 2026, costconext.com began redirecting to a Costco customer service page saying Costco Next storefronts are no longer available and that members should contact vendors directly for returns and warranty questions. Costco hasn't given a reason.

Costco Next is closed. Around early September 2026, costconext.com began redirecting to a Costco customer service page saying Costco Next storefronts are no longer available and that members should contact the vendor directly for returns and warranty questions. Costco hasn't given a reason. Brands that sold through Costco Next need to wind down returns and warranties and square away sales tax and 1099-K reporting on those sales. A brand that still wants Costco members has to become a Costco supplier, which turns it from a retail seller into a wholesaler and changes how nearly every tax item works.

What was Costco Next, and when did it close?

Costco Next was an online program for Costco members. Costco picked a set of brands; members clicked through from Costco to a dedicated storefront on the brand's own website, got a member discount, ordered there, and the brand shipped. FOX Business reported on September 4, 2026 that the program had about 80 brands with discounts of up to 40%, and that some members noticed it was gone on September 1.

When we checked in November 2026, costconext.com redirected to a Costco customer service answer saying access to Costco Next storefronts is no longer available, listing contacts for vendors with active return policies, and telling members to contact the vendor directly for eligible returns and warranty inquiries. Costco hasn't said why it closed the program or whether it will return in another form.

Who was the seller on Costco Next sales?

Orders were placed on the brand's own site, and the brand took payment and shipped, so for tax the brand was generally the seller. That is completely different from selling wholesale to Costco. Your agreement with Costco governs the details, but in most cases:

Sales tax: the brand collected and filed under each state's rules. In states where it had economic nexus (most states use $100,000 of sales a year) or inventory, it needed to register, collect from customers and file. If it didn't collect state by state in the past, the closure is a good moment to check for states where tax may be owed.

1099-K: customers paid through the brand's payment processor, which issues Forms 1099-K under the rules, with a federal threshold of $20,000 and 200 transactions a year and lower thresholds in some states. A 1099-K shows gross amounts and has to be reconciled to orders, refunds and fees.

Revenue: the discounted price members paid is revenue; any fees paid to Costco are an expense or a revenue reduction depending on what the contract says they are for.

What needs handling in the books after the closure?

Returns and warranties: Costco has sent members to the brands, so returns and warranty claims on past sales stay with you. Accrue a liability based on return history and warranty terms; for tax, returns and warranty costs are generally deducted when they actually occur, so book and tax will differ in timing and need separate tracking.

Inventory: sizes or packs made only for Costco Next may not sell elsewhere at full price. Assess them for write-down; for tax, inventory losses generally require an actual sale at a lower price or a documented disposal before the loss is recognized.

Contracts and prepayments: settle marketing commitments, prepayments and open fees tied to Costco Next under the agreement; an attorney handles any dispute.

The sales tax tail: file the final months on schedule, and in states where you no longer sell, close the account or change filing frequency under that state's procedures instead of simply stopping.

How do you keep reaching Costco members?

The route into Costco now is supplying it: selling into warehouses or costco.com. Costco has no public application system. Its Vendor Inquiries page says non-food and sundry prospects contact the Issaquah corporate office and food and sundry prospects contact a regional office; U.S. small businesses can use the Supplier Inclusion form. Only if a buyer is interested do samples, quotes, the supplier agreement and item setup follow.

As a supplier, the tax picture changes. Costco becomes your customer and collects sales tax from members, and you sell for resale under its certificate. Costco pays invoices and issues no 1099-K, and payments for merchandise aren't reported on Form 1099-NEC or 1099-MISC. Your revenue moves from retail to wholesale prices, and payments arrive net of discounts and allowances, so book revenue gross and record deductions separately. Costco carries fewer than 4,000 active SKUs per warehouse, so volume per item is large; plan capacity and cash flow ahead.

An example

Example (hypothetical numbers, to show the method): a luggage brand sold $900,000 through Costco Next from January to August 2026, all on its own site, and its payment processor will issue a 1099-K. With a 4% return rate over the past two years, it accrues a $36,000 return liability. It holds $120,000 of Costco Next-only inventory, which it plans to clear at lower prices on its own site and other marketplaces, recognizing any loss as it sells. If it starts supplying Costco in 2027, it runs two revenue lines: retail, where it keeps collecting sales tax and reconciling 1099-Ks, and wholesale, where it manages resale certificates and reconciles to Costco's remittances.

Learn more

For the supplier process, requirements, Kirkland Signature manufacturing, FOB versus DDP, an entity-choice table and a channel comparison, see the guide to becoming a Costco supplier; for 1099-K reconciliation, see the 1099-K guide. To sort out the Costco Next wind-down and what comes next, book a free 15-minute call or add WeChat YCLUSA.