| Your friend would only pay tax on the profit he makes, in this case, it is to the extent of his commission of 5%! If your friend operates this business as a sole proprietorship, he will be required to file a schedule C along with his individual tax return.
However, I suggest that your friend open a corporation or an LLC to ensure that he is not personally subject to any potential business lawsuits. If he is not incorporated he would be personally liable to potential lawsuits and his personal assets would be exposed! | 
