Marketplaces to collect sales tax on third-party sales in Georgia

Update 2.23.2020: HB 276 was signed into law (Act 322) on January 30. 

Sales tax is top of mind for the Georgia General Assembly. Just a few days into the 2020 legislative session, lawmakers in the House and Senate passed a measure requiring marketplace facilitators to collect and remit sales tax on behalf of third-party sellers. Governor Brian Kemp is expected to sign it.

House Bill 276 makes the marketplace facilitator the dealer responsible for the tax due on all sales sourced to Georgia and made through the marketplace, including those by small marketplace sellers based in other states who wouldn’t otherwise be required to collect and remit Georgia sales or use tax. As written, the measure will take effect April 1, 2020.

To be considered a “marketplace facilitator,” a person must contract with a seller, in exchange for a consideration, to make available or facilitate a taxable retail sale on the seller's behalf by directly or indirectly:

  • Facilitating the retail sale in any manner, including advertising, marketing, promoting, taking orders, or providing the physical or electronic infrastructure that brings purchasers and marketplace sellers together; and
  • Collecting, charging, processing, or otherwise facilitating payments for such retail sales on behalf of the marketplace seller.

Businesses that help connect customers with sellers but don’t facilitate payments for the seller aren’t considered marketplace facilitators. But the collection requirement would likely apply to lodging and transportation marketplaces such as Airbnb and Uber.

A retail sale is sourced to a location in Georgia if it’s “held for pickup, used, consumed, distributed, stored for use or consumption, or rendered as a service” within the state.


The measure prohibits bringing a class action that’s in any way related to an overpayment of sales or use tax collected by the facilitator, “regardless of whether that claim is characterized as a tax refund claim.” However, customers may seek a refund of taxes erroneously paid.

Marketplace sellers won’t be audited by the Georgia Department of Revenue for sales made through the marketplace unless the facilitator can satisfactorily demonstrate that any errors made were “due to insufficient or incorrect information given to the marketplace facilitator by the marketplace seller.” Even then, the facilitator must have “made a reasonable effort to obtain correct and sufficient information” from the seller. Relief from liability doesn’t apply if the facilitator and seller are related (see Code Section 48-7-28.3).

In the event a marketplace facilitator isn’t liable for the sales or use tax due, the marketplace seller is to be solely liable.

Effect on franchises

HB 276 specifies that a franchisor is not a marketplace facilitor with respect to any franchisee, provided:

  • The franchisor and all its franchisees had less than $500 million in aggregate annual gross sales in the United States in the prior calendar year;
  • The franchisee maintains a valid certificate of registration (Code 100 Section 48-8-59); and
  • The franchisee and franchisor maintain a valid contract providing that the franchisee will collect and remit all applicable taxes and fees that the franchisor would otherwise be required to collect and remit as a marketplace facilitator for the franchisee.

Effect on large marketplace sellers

Marketplace facilitators aren’t responsible for the tax due on sales made through the platform on behalf of a seller if:

  • The seller had at least $500 million in annual gross sales in Georgia in the prior calendar year;
  • The seller maintains a valid certificate of registration in Georgia (Code 100 Section 48-8-59); and
  • The seller maintains a valid contract with the facilitator providing that the seller will collect and remit all applicable taxes and fees that the facilitator would, as a marketplace facilitator, otherwise be required to collect and remit on behalf of the seller.

Reporting requirements

Marketplace facilitators may report third-party sales separately from their direct sales or together. Additional details are available in the text of the bill.

Other states with marketplace facilitator laws

Georgia isn’t alone in making marketplace facilitators responsible for the tax due on third-party sales: More than 38 states have passed similar laws. To learn more, visit our state-by-state guide to marketplace facilitator laws and state-by-state registration requirements for marketplace sellers.

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