This was the entire reason for the 20k cap. Nobody was ever expected before this to pay the government 1099 taxes for selling their laptop on ebay.
You were still legally required to pay taxes on sales under 20k. You can still be audited and back taxed(with interest) for sales under 20k from prior to the change. The law is not a change to the tax code, it is a change to the requirements for payment processors. I'm not saying most people would have paid tax on a single laptop sale. You don't actually owe tax on a laptop sale, because it is a depreciated asset(you did not make a profit on the laptop, and it was not business related, so you do not actually owe any tax on it). If it was a laptop used solely for a business, you could even use the drop in value from when you bought it until when you sold it as a tax deduction.
You're confusing 2 different values:
A 1099K is a form sent by a payment processor to you (and the government) that states how much money was paid to you via that payment processor. Companies were previously required to send a 1099K if you received at least $20k in value, and made at least 200 transactions. After the change, companies will be required to send a 1099K if you receive at least $600 in value, regardless of number of transactions.
Your tax liability is not the same as your 1099K. You do not need to declare items that are not business related and were sold at a loss on your taxes. The laptop would not need to be declared. You do need to declare items that were business related. If you sell a $20 item as your only business for a year,
you still need to declare that sale on your taxes.
With that out of the way, let's go a little further. So, you need to
declare all of your income from your business as income. That's not up for debate, it doesn't matter if you made 20k or not, or even if you made under $600. However, in most states, you do not need to create a LLC or file as a business unless you have employees. A sole proprietorship can use Form 1040 Schedule C to list their business expenses. You list your business expenses, and those are subtracted from your income before the income is used to calculate taxes.
You do not owe money on the sum of the value on the 1099K, the 1099K does not mean anything and you can straight throw it out if you're keeping your own records. The 1099K exists for two reasons:
1. To tell the government how much money you were sent, so that if your listed business income is significantly lower their digital systems will flag it and know you're cheating on your taxes. This can result in an audit, back taxes, fees, etc.. if you are declaring your business income as much less than the sum of what the government knows you received.
2. To make it easier for you(or a tax preparer) to track your business income. If you are not keeping comprehensive records like a responsible business owner, it's a safe bet to just use the values on your 1099Ks as your business income because it will line up with what the government knows you received.