5 states considering marketplace facilitator legislation

Update: Both Louisiana and Mississippi enacted marketplace facilitator laws, and both laws take effect July 1, 2020.

Marketplace facilitators are liable for sales tax on third-party sales in all but five states — Florida, Kansas, Louisiana, Mississippi, and Missouri — all of which now have marketplace facilitator legislation in the pipeline.

Marketplace facilitator laws work in tandem with economic nexus laws, which place a sales tax collection obligation on remote vendors doing a certain amount of business in a state. Until June 21, 2018, when the Supreme Court of the United States ruled for the state in South Dakota v. Wayfair, Inc., states could only require businesses with physical presence in the state to collect and remit sales tax. The Wayfair decision authorized states to base a sales tax collection obligation solely on economic activity, thus allowing them to tax remote sales.

As one state after another adopted economic nexus, a loophole became apparent. Although marketplaces such as Amazon were complying with economic nexus laws and collecting the tax due on their direct sales, they weren’t collecting tax on their third-party, or marketplace, sales. They insisted they were the sales facilitator, not the vendor, for marketplace transactions.

States developed marketplace facilitator laws to close that loophole by making marketplace facilitators the vendor responsible for collecting and remitting tax on all sales made through the platform. Requirements for individual marketplace sellers vary by state; check out our state-by-state registration requirements for marketplace sellers for more details.

Since the Wayfair decision, 43 of the 45 states that have a statewide sales tax have adopted economic nexus, as have Washington D.C., and various local governments in Alaska (where there’s local sales tax but no state sales tax). Forty states (plus D.C. and some parts of Alaska) have adopted marketplace facilitator laws. It’s only a matter of time before the five remaining holdouts join them.


The Florida Legislature adjourned early because of the new coronavirus (COVID-19). If it’s called to a special session later this year, Senate Bill 126 or House Bill 159 could be reconsidered. Both would establish economic nexus, imposing a sales tax collection obligation on remote sellers with more than $100,000 in sales or at least 200 separate transactions in the state in the previous calendar year. They would also require marketplace facilitators meeting the economic nexus standard or physical presence rule in Florida to collect and remit sales tax on behalf of third-party sellers.

The future of SB 126 and HB 159 is uncertain. They were indefinitely postponed from consideration shortly before the legislature suddenly adjourned, and similar measures failed to pass in 2019. However, the Sunshine State will need to generate more tax revenue in the coming months because of COVID-19, which temporarily shuttered many brick-and-mortar businesses and short-term rentals. With no state income tax, Florida is heavily reliant on sales tax


The Louisiana Senate passed a marketplace facilitator bill (SB 138) shortly after reconvening on May 4. The measure now needs to win the House. Additional information can be found in Louisiana may make marketplaces collect tax on third-party sales and take steps to prevent sales of counterfeit products


Mississippi’s marketplace facilitator bill was approved by the House before it prematurely adjourned to help stop the spread of COVID-19. Now that the legislature is back in session, House Bill 379 has been referred to the Senate Finance Committee. It would require marketplace facilitators with a physical presence or more than $250,000 in sales in the state in any consecutive 12-month period to collect and remit the tax due on third-party sales. If enacted as written, it would take effect July 1, 2020.

More details are provided in Mississippi moves to turn marketplace facilitators into tax collectors.


The Missouri Legislature has been working to enact economic nexus and marketplace facilitator legislation since shortly after the Wayfair decision. With approximately 2,200 overlapping local tax jurisdictions in the state, the complexity of the Missouri sales tax system has proved a major roadblock.

A least two economic nexus/marketplace facilitator bills were under consideration during the session that concluded May 15. While neither was approved, they provide insight into what could be adopted the next time the legislature convenes. Senate Bill 529 and Senate Bill 648 would:

Implement a marketplace facilitator use tax collection requirement starting January 1, 2022

Require remote vendors with at least $100,000 in sales of tangible personal property in the state during the previous 12-month period to collect and remit Missouri use tax

Require the Missouri Department of Revenue to display a sales and use tax mapping feature on its website by August 28, 2021

If and when any of the above states do adopt economic nexus or marketplace facilitator laws, we’ll provide more information in our state-by-state guide to economic nexus laws and state-by-state guide to marketplace facilitator laws.

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