State-by-state guide to marketplace facilitator laws

If you sell via an online marketplace such as Amazon, Etsy, or Walmart, you need to understand a new breed of sales tax regulations that focus on marketplace sales — marketplace facilitator laws. Marketplace facilitator laws impose an obligation on the marketplace facilitator to collect and remit sales tax on behalf of marketplace sellers. These laws are significant because they shift the obligation to collect and remit sales tax from the seller to the platform that facilitates the sale (the marketplace facilitator). 

Marketplace facilitator laws by state

as of October 14, 2019

These laws began to appear in 2017, shortly after states realized that while Amazon had started taxing sales of its own products, it wasn’t charging sales tax on third-party, or marketplace, sales. Given that more than half of all Amazon transactions occur through its marketplace, a significant portion of sales were going untaxed.

Many marketplace facilitators take the position that they’re not the actual seller — they merely provide the platform that facilitates sales — and therefore aren’t responsible for collecting the sales tax; that obligation has historically fallen on the seller.

States, however, don’t want to miss out on tax revenue from marketplace sales. To capture it more effectively, more than 30 states have adopted marketplace facilitator laws that shift the burden of tax collection to the marketplace facilitator. Like many facets of sales tax, marketplace facilitator laws vary by state in their application and definition.

An additional confounding aspect of these laws is their relation to non-collecting seller use tax reporting laws. In some states, sellers — including marketplace facilitators — have the choice to opt out of the marketplace facilitator law provided they comply with non-collecting seller use tax reporting requirements. 

Below you’ll find a state-by-state breakdown of marketplace facilitator laws. We’ll also clarify if the state has a non-collecting seller use tax reporting requirement. For more information or assistance in determining your sales tax registration, collection, and remittance requirements, contact Avalara Professional Services

Although we hope you’ll find the information helpful, this guide does not offer a substitute for professional legal or tax advice. If you have questions about your tax liability or concerns about compliance, please consult your qualified legal, tax, or accounting professional. This information was compiled in May 2019. Because states constantly update and amend their sales and use tax laws, see each state’s tax authority website for the most up-to-date and comprehensive information.


Alabama

Enforcement date:
October 1, 2019 (originally January 1, 2019, but the Alabama Department of Revenue delayed enforcement)

Summary: 
Marketplace facilitators with Alabama marketplace sales in excess of $250,000 are required to collect tax on sales made by or on behalf of their third-party sellers.    

Non-collecting seller use tax reporting: 
Yes    


Arizona

Enforcement date:
September 20, 2016; updated effective October 1, 2019

Summary: 
A business that has nexus with Arizona, operates an online marketplace, and makes online sales on behalf of third-party merchants is required to collect and remit Arizona transaction privilege tax on third-party sales if certain conditions are true.

Non-collecting seller use tax reporting: 
No


Arkansas

Enforcement date:
July 1, 2019 

Summary: 
A marketplace facilitator that sells or facilitates more than $100,000 in sales or at least 200 transactions of tangible personal property, taxable services, a digital code, or specified digital products for delivery into Arkansas in the previous or current calendar year must collect and remit sales or use tax on all sales made through the marketplace for delivery into Arkansas.    

Non-collecting seller use tax reporting: 
No


California

Enforcement date:
October 1, 2019 

Summary: 
A marketplace facilitator that sells or facilitates sales of tangible personal property into California must collect and remit sales or use tax on all sales made through the marketplace for delivery into California. The collection requirement applies to in-state marketplaces and out-of-state marketplaces whose sales of tangible personal property in California exceed $500,000 in the current or preceding calendar year.

Non-collecting seller use tax reporting: 
No


Colorado

Enforcement date:
October 1, 2019 

Summary: 
A marketplace facilitator that has an obligation to collect and remit Colorado sales and use tax and sells or facilitates sales of tangible personal property or services into Colorado must collect and remit sales or use tax on all sales to Colorado consumers made through the marketplace. 

Non-collecting seller use tax reporting: 
Yes


Connecticut

Enforcement date:
December 1, 2018

Summary: 
Marketplace facilitators that facilitated retail sales of at least $250,000 during the prior 12-month period are required to collect and remit sales tax on behalf of their marketplace sellers. A marketplace facilitator is defined as anyone that provides a forum that lists or advertises taxable tangible personal property for sale by marketplace sellers; directly or indirectly collects receipts from the customer and remits payments to the marketplace seller; and is compensated for such services.

Non-collecting seller use tax reporting: 
Yes


Hawaii

Enforcement date:
January 1, 2020

Summary: 
A marketplace facilitator must collect and remit sales tax on all sales into the state, including those by an unlicensed seller. 

Non-collecting seller use tax reporting: 
Yes


Idaho

Enforcement date:
June 1, 2019

Summary: 
Marketplace facilitators with a physical presence in Idaho and remote marketplace facilitators with more than $100,000 in combined sales into the state must collect and remit state tax on all sales into the state, their own and those by third-party sellers. Remote marketplaces are not responsible for collecting local sales tax.    

Non-collecting seller use tax reporting: 
No


Illinois

Enforcement date:
January 1, 2020

Summary: 
Marketplace facilitators are required to collect tax on sales made by or on behalf of their third-party sellers in Illinois if, in the preceding 12-month period, cumulative gross receipts from sales of tangible personal property or taxable services to purchasers in Illinois by the marketplace facilitator and its marketplace sellers are $100,000 or more; or the marketplace facilitator and sellers cumulatively enter into 200 or more separate transactions for the sale of tangible personal property or taxable services into Illinois. 

Non-collecting seller use tax reporting: 
No 


Indiana

Enforcement date:
July 1, 2019

Summary: 
Marketplace facilitators that make or facilitate sales in Indiana and meet the economic nexus thresholds of $100,000 in sales or 200 or more transactions in Indiana must collect and remit sales tax on all taxable sales made through the marketplace. This requirement also applies to lodging marketplaces. Additional information can be found here.

Non-collecting seller use tax reporting: 
No


Iowa

Enforcement date:
January 1, 2019

Summary: 
A marketplace facilitator that meets the economic nexus thresholds of $100,000 in Iowa sales or 200 or more separate Iowa sales transactions, and makes or facilitates Iowa sales on behalf of itself or one or more marketplace sellers must collect and remit sales tax on each facilitated taxable Iowa sale.    

Non-collecting seller use tax reporting: 
No. The Iowa Department of Revenue is authorized to establish and impose notice and reporting requirements for remote retailers, including marketplace facilitators who don’t collect and remit sales and use tax. However, it hasn’t done so. Additional information can be found here.


Kentucky

Enforcement date:
July 1, 2019 

Summary: 
Marketplace providers that make or facilitate retail sales of tangible personal property, digital property, or services delivered or transferred electronically in Kentucky and meet the economic nexus threshold of $100,000 in sales or 200 or more separate transactions must register, collect, and remit sales tax on each facilitated taxable sale. This is true regardless of whether the seller would have been required to register and collect sales tax. Marketplace providers that make their own sales must obtain two sales tax permits: one for their own sales, and one for sales facilitated for marketplace sellers.    

Non-collecting seller use tax reporting: 
Yes and no   


Maine

Enforcement date:
October 1, 2019 

Summary: 
A marketplace facilitator that has economic nexus with Maine must collect and remit sales tax on all marketplace sales for delivery into the state. Marketplace facilitators should include all sales made through the platform when calculating the economic nexus threshold (more than $100,000 in sales or at least 200 transactions of tangible personal property, electronically transferred property, or taxable sales in the state).

Non-collecting seller use tax reporting: 
No


Maryland

Enforcement date:
October 1, 2019 

Summary: 
A marketplace facilitator that has an obligation to collect Maryland sales tax, sells or facilitates sales of tangible personal property into Maryland, and processes payments on behalf of sellers must collect and remit sales tax on all sales made through the marketplace for delivery into Maryland. However, a marketplace facilitator and seller may ask for a waiver of this collection requirement if: 

  • The marketplace seller is a publicly traded communications company; 
  • The marketplace facilitator and marketplace seller have an agreement that the seller will collect and remit applicable taxes; and 
  • The marketplace seller provides the facilitator with evidence that the seller is licensed to engage in the business of an out-of-state vendor in Maryland

Non-collecting seller use tax reporting: 
No


Massachusetts

Enforcement date:
October 1, 2019

Summary: 
A remote marketplace provider that makes or facilitates more than $100,000 in sales in the commonwealth in the current or prior taxable year must collect and remit tax on all taxable sales made through the marketplace in Massachusetts. A marketplace facilitator that is not remote must collect and remit tax on all taxable sales made through the marketplace in Massachusetts if it makes or facilitates more than $100,000 in sales in the commonwealth in the current or prior taxable year.

Non-collecting seller use tax reporting: 
No


Minnesota

Enforcement date:
October 1, 2018 

Summary: 
Marketplace providers that facilitate a retail sale through the listing or advertising of products or processing customer payments — directly or indirectly through a third party — must collect sales tax on all taxable sales into the state unless the marketplace seller has taxable retail sales through the marketplace of less than $10,000 in a 12-month period, elects to register and collect Minnesota sales tax directly, or the marketplace does not maintain a place of business in Minnesota. 

Non-collecting seller use tax reporting: 
No


Nebraska

Enforcement date:
April 1, 2019  

Summary: 
A marketplace provider that makes or facilitates more than $100,000 in sales or 200 transactions in the state in the current or previous calendar year must collect and remit sales tax on behalf of its third-party sellers. Although marketplace sellers are relieved of the duty to collect or remit sales tax on sales made through a collecting marketplace, they must still register with the state and report all Nebraska sales. 

Non-collecting seller use tax reporting: 
No


Nevada

Enforcement date:
October 1, 2019  

Summary: 
A marketplace provider is required to collect tax on behalf of sellers in Nevada if, in the current or immediately preceding calendar year, it had cumulative gross receipts exceeding $100,000 from retail sales made or facilitated to customers in Nevada, or made or facilitated at least 200 separate retail sales transactions in the current or preceding calendar year. A marketplace and a seller can agree, in writing, to have the seller collect the tax due instead. 

Non-collecting seller use tax reporting: 
Yes and no


New Jersey

Enforcement date:
November 1, 2018   

Summary: 
A marketplace facilitator is required to collect and remit sales tax on sales made through any physical or electronic marketplace owned, operated, or controlled by a marketplace facilitator, even if the marketplace seller is registered with New Jersey for the collection and remittance of sales tax. However, a marketplace facilitator and marketplace seller may enter into an agreement with each other regarding the collection and remittance of sales tax.    

Non-collecting seller use tax reporting: 
No


New Mexico

Enforcement date:
July 1, 2019   

Summary: 
A remote marketplace provider with at least $100,000 in total taxable gross receipts from sales in the state in the previous calendar year must register with the state and remit gross receipts tax on all sales made or facilitated in the state. 

Non-collecting seller use tax reporting: 
No


New York

Enforcement date:
June 1, 2019   

Summary: 
A remote marketplace provider that made or facilitated more than $500,000 in gross sales and 100 transactions in the state in the preceding four quarterly periods is required to obtain a certificate of authority, collect sales tax, file returns, and remit tax on all sales into the state. All in-state marketplaces are required to collect tax on all sales in the state.    

Non-collecting seller use tax reporting: 
No


North Dakota

Enforcement date:
October 1, 2019  

Summary: 
A remote marketplace facilitator must collect and remit sales or use tax on all sales into the state if it makes or facilitates more than $100,000 in gross sales or at least 200 transactions of tangible personal property or other taxable items in the state in the current or previous calendar year. 

Non-collecting seller use tax reporting: 
No


Ohio

Enforcement date:
September 1, 2019

Summary: 
A remote marketplace facilitator must collect and remit sales or use tax on all sales into the state if it makes or facilitates more than $100,000 in gross sales or at least 200 transactions of taxable or exempt tangible personal property or services in the state in the current or previous calendar year. 

Although Ohio began enforcing economic nexus on August 1, 2019, the earliest a marketplace facilitator is required to collect is September 1, 2019.

Non-collecting seller use tax reporting: 
No


Oklahoma

Enforcement date:
July 1, 2018 (amended as of November 1, 2019) 

Summary: 
A remote seller, marketplace facilitator, or referrer with aggregate sales of at least $10,000 in Oklahoma must file an election with the Tax Commission to either collect and remit sales and use tax on behalf of remote sellers or comply with non-collecting seller use tax notice and reporting requirements. Marketplace facilitators, referrers, or remote sellers with a place of business in Oklahoma must collect tax on their own sales. 

Non-collecting seller use tax reporting: 
Yes


Pennsylvania

Enforcement date:
March 1, 2018   

Summary: 
A marketplace facilitator that maintains a place of business in the commonwealth is required to collect and remit sales tax on the taxable sales made through its forum by any marketplace seller using the forum. A marketplace facilitator that doesn’t maintain a place of business in the commonwealth and makes or facilitates $10,000 or more in taxable sales to Pennsylvania customers in the previous calendar year must register to collect and remit Pennsylvania sales tax or comply with notice and reporting requirements. Effective July 1, 2019, a remote marketplace facilitator with more than $100,000 in Pennsylvania sales in the previous 12 months is required to collect and remit sales tax on all sales into the commonwealth (i.e., cannot opt out by complying with non-collecting seller use tax reporting requirements).    

Non-collecting seller use tax reporting: 
Yes


Rhode Island    

Enforcement date:
July 1, 2019    

Summary: 
Marketplace facilitators that meet the economic nexus threshold of more than $100,000 in gross revenue or 200 or more transactions are required to collect and remit sales tax on behalf of all sellers making sales in Rhode Island through the marketplace (third-party or marketplace sellers), even those whose sales into the state are below the economic nexus threshold.    

Non-collecting seller use tax reporting: 
Yes


South Carolina

Enforcement date:
November 1, 2018 (currently being challenged); reinforced as of April 26, 2019 with the enactment of SB 214

Summary: 
South Carolina defines an online marketplace as the retailer of all tangible personal property sold on its website. As the retailer, the online marketplace must obtain a retail license and remit the South Carolina sales and use tax on all taxable products sold into the state on its website, whether the product is owned by the online marketplace or another party. Any online marketplace with a physical presence in South Carolina is required to register and collect for all taxable sales into the state. Online marketplace facilitators without a physical presence but with more than $100,000 in gross revenue from sales of tangible personal property, products transferred electronically, and services delivered into the state are required to register and collect sales and use tax on all sales made through the marketplace. South Carolina is currently in litigation with Amazon Services, LLC and the outcome could impact enforcement of the law.  

Non-collecting seller use tax reporting: 
No


South Dakota

Enforcement date:
March 1, 2019    

Summary: 
A marketplace provider must collect and remit sales tax on all sales it facilitates into South Dakota if, in the current or preceding calendar year, the marketplace provider: is a remote seller with 200 or more transactions into South Dakota or $100,000 or more in gross sales in South Dakota; facilitates sales for at least one marketplace seller that exceeds that $100,000 sales/200 transactions threshold; or facilitates the sales of two or more marketplace sellers that, when their sales are combined, exceeds the $100,000 sales/200 transactions threshold.    

Non-collecting seller use tax reporting: 
Yes (But businesses required to comply with marketplace provider law cannot opt out of collection)


Texas

Enforcement date:
October 1, 2019    

Summary: 
A marketplace provider that has an obligation to collect Texas sales or use tax and sells or facilitates sales of taxable items into Texas must collect and remit sales or use tax on all sales made through the marketplace for delivery into Texas. 

Non-collecting seller use tax reporting: 
No


Utah

Enforcement date:
October 1, 2019    

Summary: 
A marketplace facilitator must collect and remit sales or use tax on all sales into Utah if, in the previous or current calendar year, it has more than $100,000 in gross revenue in Utah or makes at least 200 separate transactions in the state. When calculating the threshold, a marketplace should include all sales made through the platform, its own and third-party sales.

Non-collecting seller use tax reporting: 
No


Vermont

Enforcement date:
June 1, 2019    

Summary: 
A marketplace facilitator must collect and remit the sales tax on retail sales in Vermont by marketplace sellers through the marketplace if, during any 12-month period, it facilitated sales by marketplace sellers to destinations in Vermont of at least $100,000, or totaling at least 200 individual sales transactions. Learn more here.

Non-collecting seller use tax reporting: 
Yes and no


Virginia

Enforcement date:
July 1, 2019    

Summary: 
Marketplace facilitators who contract with a marketplace seller to facilitate the sale of their products in Virginia through a physical or electronic marketplace and have more than $100,000 in gross revenue or 200 or more transactions in the commonwealth must collect and remit sales and use tax on all marketplace transactions. The threshold refers to all Virginia sales made through the marketplace — its own and third-party sales. Marketplace facilitators may obtain a waiver from the collection requirement for a marketplace seller that already has nexus with Virginia, or that establishes economic nexus after July 1, 2019.    

Non-collecting seller use tax reporting: 
No


Washington

Enforcement date:
January 1, 2018 (amended as of March 14, 2019) 

Summary: 
Marketplace facilitators with no physical presence in the state and more than $100,000 in gross retail sales in the state in the current or preceding calendar year must collect Washington retail sales tax on taxable retail sales. As of January 1, 2020, the $100,000 threshold is based on cumulative gross income in Washington, not retail sales. The threshold refers to all Washington sales made through the marketplace — its own and third-party sales.    

Non-collecting seller use tax reporting: 
Yes and no

Note: Marketplaces may also have a B&O tax obligation. Additional information is available here.


Washington, D.C.

Enforcement date:
April 1, 2019      

Summary: 
Marketplace facilitators must collect and remit sales tax on all sales into the district, both their own and those by third-party sellers.

Non-collecting seller use tax reporting: 
No


West Virginia

Enforcement date:
July 1, 2019     

Summary: 
A remote marketplace facilitator with more than $100,000 in gross revenue from West Virginia sales or 200 or more transactions in the state in the current or preceding calendar year must collect and remit sales tax on all sales made or facilitated in the state.    

Non-collecting seller use tax reporting: 
No


Wisconsin

Enforcement date:
January 1, 2020     

Summary: 
A remote marketplace facilitator with more than $100,000 in gross revenue from Wisconsin sales or 200 or more transactions in the state in the current or preceding calendar year must collect and remit sales tax on all sales made or facilitated in the state.    

Non-collecting seller use tax reporting: 
No

Additional information: 
2019 Wisconsin Act 10


Wyoming

Enforcement date:
July 1, 2019    

Summary: 
An in-state marketplace facilitator must collect and remit sales tax on all sales facilitated and sold into Wyoming, regardless of whether the marketplace seller has a sales tax permit or is otherwise required to collect sales tax. A remote marketplace facilitator must collect and remit Wyoming tax on all marketplace sales if it has $100,000 in gross sales in Wyoming or 200 individual transactions for delivery in Wyoming during the current or preceding calendar year.    

Non-collecting seller use tax reporting: 
No


Stay current on sales tax requirements for marketplace sales

Because each marketplace is unique, we recommend sellers work directly with marketplace facilitators to determine the best practice for managing sales tax collection and remittance in a particular state.

There are many ways to trigger a sales tax collection obligation in a state. If you have questions about what business activities can establish nexus, visit our sales tax laws by state resource. If you’ve determined you have a new sales tax collection obligation, the typical next step is to register your business with the jurisdiction. Avalara Licensing can help with that.

 


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