Taxes with respect to content providers

I am developing a modest web site that shows content created by external providers. I use this content to promote my goods and sell them.

Instead of paying a fix upfront price for the content (I don't have any money at the moment),
I plan to reward the content providers with a commission on my sales: basically, the more sale I make, the more they get.

This raises a lot of tax related questions:

1) Should I declare the money I pay them to the IRS? If so, how can I get tax info (SSN or tax id) without scaring providers away (my site is just another random site)?

2) Am I taxable for the money I give them?

3) Do I absolutely need a formal structure (sole prop, LLC, etc?) in that context?

Thanks in advance for help or any comment you may have.

You mentioned IRS, so I'm assuming you're in the US. Generally, it is customary to put the country in the tags so that people would know how to answer you.

1) Should I declare the money I pay them to the IRS? If so, how can I
get tax info (SSN or tax id) without scaring providers away (my site
is just another random site)?

Of course. You should send 1099 per rules. But depending on the amounts, you may not be required to do so. Check the requirements for 1099-MISC, if I remember correctly you only have to send it out of you paid more than $600 during the tax year to the recipient.

In any case, you should ask for W9/W8-BEN from your payees, and also take care of the withholding requirements (especially for those with W8-BEN). Have your accountant explain this to you. If you're going to have tons of different vendors/content providers, you'd better have one at hand.

2) Am I taxable for the money I give them?

If you do the accounting properly, the money you give them is not taxable to you, but it depends on the business structure and specific state laws (some entities may be taxed per gross receipts, for example: LLC in California).

3) Do I absolutely need a formal structure (sole prop, LLC, etc?) in
that context?

Not at all. Sole proprietorship is the "default" structure in absence of any other structure - it is you. But you might want to consider liability protection needs.

Bottom line:

Talk to your accountant/tax adviser. If you don't have any - get one. With the business plan you have in mind it is crucial for you to have a proper accounting/bookkeeping/reporting service.

This is not a tax advice, and nothing I wrote here was intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer.