Do occasional sales exemptions apply to marketplace sales?

Whenever a state enacts a sales and use tax law, it must weave the new law into the fabric of existing laws and address any contradictions or inconsistencies. It’s not uncommon for a state to need to specify how laws intersect so taxpayers understand their responsibilities. Connecticut, Illinois, Minnesota, New Mexico, and Wisconsin are among the states that have clarified how their marketplace facilitator laws impact the exemption for isolated or occasional sales. 

Illinois and Minnesota: Sales made through a marketplace don’t qualify for the occasional sales exemption


According to Illinois Department of Revenue General Interest Letter* ST 21-0003, the occasional sales exemption in Illinois doesn’t apply to sales made through a marketplace facilitator.

ST 21-0003 was issued in response to the following questions, asked by a religious organization that’s made occasional sales in Illinois in the past:

Is the exemption for isolated or occasional sales available to marketplace sellers such as nonprofits selling over a marketplace?

Can a marketplace seller such as a nonprofit claim a sale is occasional or isolated and not subject to Retailers’ Occupation Tax even when such sales are made over a marketplace? Including sales of items located in Illinois and sold to an Illinois purchaser?

They’re good questions and timely, because tax obligations for remote retailers and marketplace facilitators changed effective January 1, 2021. Prior to that date, the state use tax applied to remote sales. From January 1, 2021, remote retailers and marketplace facilitators are required to collect state and local Retailers’ Occupation Tax.

This distinction matters. Under the Retailers’ Occupation Tax Act, a marketplace facilitator is considered a retailer engaged in the occupation of selling at retail if it meets either of the state’s economic nexus thresholds: $100,000 in cumulative gross receipts from, or at least 200 separate transactions of, tangible personal property to purchasers in Illinois. Because the new rules consider a marketplace facilitator to be “habitually engaged in the selling of tangible personal property,” the isolated or occasional sales exemption doesn’t apply.


Similar to Illinois, Minnesota has determined marketplace providers “are never engaged in isolated and occasional sales.” As a result, sales tax applies to all taxable sales made through a marketplace. 

Connecticut and New Mexico: Marketplace sales may qualify for the occasional sales exemption

Connecticut, New Mexico, and Wisconsin reached different conclusions.


According to guidance issued by the Connecticut Department of Revenue Services, a marketplace seller located in state that makes only casual and occasional sales is not required to register for sales tax; the sales are exempt.

Marketplace sellers based in other states that meet Connecticut’s economic nexus threshold are required to register and file annual returns but may declare that they sell only through a marketplace facilitator, which is responsible for collecting and remitting applicable sales and use taxes.

New Mexico

According to FYI-206, the exemption for isolated and occasional sales “may apply to marketplace sellers.”

Isolated or occasional sales are generally exempt from New Mexico’s gross receipts tax. Per Regulation NMAC, the New Mexico Taxation and Revenue Department will use certain criteria to determine whether a sale or lease qualifies for the isolated or occasional sales exemption, including, but not limited to, the following:

  • The duration of the sales or leasing activity
  • The nature of the market for the service or property sold or leased
  • The nature of the service or property
  • The number of sales or leases made within a given period
  • The regularity of the sales
  • Any holding out as being in business by the seller or lessor
  • Any promotional activity such as advertising or telephone yellow page listings

Because New Mexico imposes a gross receipts tax on businesses rather than a sales tax on consumers, marketplace sellers must register with the Taxation and Revenue Department and report all sales made through a marketplace. However, they may then deduct receipts for sales, leases, and licenses for use of real property that are facilitated by a marketplace provider.

For the deduction to be valid, a marketplace seller must be able to prove (through documentation) that the marketplace provider is registered with the department and has remitted or will remit gross receipts taxes due from those transactions. Failure to document an exemption could put a business at risk of a negative audit finding.

Wisconsin: Sales made through a marketplace don’t count toward the occasional sales threshold

According to the Wisconsin Department of Revenue’s FAQs for marketplace sellers: “A nonprofit organization does not include sales facilitated by a marketplace provider in determining if it is engaged in a trade or business for purposes of the occasional sales exemption.”

The occasional sales exemption can be claimed by a nonprofit organization that makes sales of taxable products on more than 75 days during a calendar year and has taxable receipts exceeding $50,000. Sales made through a marketplace don’t count toward either threshold because “the marketplace provider is liable for Wisconsin sales or use tax on sales it facilitates on behalf of a nonprofit organization.”  

New York: Occasional sales are subject to tax

New York doesn’t provide an exemption for isolated or occasional sales, so people who aren’t in the business of selling taxable goods or services must collect and remit sales tax on any isolated or occasional sales they make. For example, if you sell your old treadmill to your neighbors, you’ll have to collect tax from them and send it to the New York Department of Taxation and Finance.

However, occasional sellers in New York aren’t required to register with the department. If you make an occasional sale, you’ll need to remit the tax you collected along with Form ST-131, Seller’s Report of Sales Tax Due on a Casual Sale.

Marketplace sellers are required to register, so it’s hard to imagine a scenario in which a marketplace sale could qualify as an occasional sale. Furthermore, an occasional sale must be made from the seller’s home, and the purchaser must pick up the item from the seller’s home.

To learn more about economic nexus and marketplace facilitator laws, visit our state-by-state guide to sales tax nexus laws. Our state-by-state registration requirements for marketplace sellers also contains helpful information.

* General Interest Letters respond to taxpayer questions, directing them to department regulations or other guidance. They’re not a statement of department policy or binding but can shed light on how the department views certain transactions.

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