Ohio clarifies collection requirement for marketplace facilitators

Economic nexus took effect in Ohio on August 1, 2019. Under the law (HB 166), certain remote retailers are required to collect and remit tax on Ohio sales starting August 1, 2019. However, the earliest remote marketplace facilitators had to collect Ohio tax was September 1, 2019.

It’s a bit confusing. 

Ohio’s economic nexus law requires a remote seller to register with the Ohio Department of Taxation by August 1, 2019, if it has:

• More than $1 million in annual gross receipts from remote sales in the United States; and
• More than $100,000 in gross receipts from sales of tangible personal property or services in Ohio in the previous or current calendar year; or
• At least 200 separate transactions of tangible personal property or services in Ohio in the previous or current calendar year.

Any remote retailer that met the economic nexus threshold in 2018, or before August 1 in 2019, should have registered with the Ohio Department of Taxation by August 1 — except marketplace facilitators. 

HB 166 allows a 30-day grace period for marketplace facilitators that is not provided to remote sellers. Thus, the Department of Taxation explains, “The earliest a marketplace facilitator is required to collect and remit Ohio tax is September 1, 2019.”

Fortunately, there’s no penalty for complying with the sales tax collection requirement prior to September 1. 

Keeping up with sales and use tax collection requirements across the United States is a full-time job, and then some. Avalara’s seller’s guide to nexus laws and sales tax collection requirements can help.