US Maryland marketplace sales tax collections Oct 2019

Maryland has become the latest US state to pass legislation requiring online marketplaces to collect sales tax on behalf of out-of-state (non-resident) sellers using their platforms. The new law will come into effect from 1 October 2019.

The new legislation imposes the obligation on those marketplaces which ‘facilitate’ the sales of third-party merchants. This is defined: "facilitates a retail sale by a marketplace seller by listing or advertising for sale in a marketplace tangible personal property; and regardless of whether the person receives compensation or other consideration in exchange for the person's services, directly or indirectly through agreements with third parties, collects payment from a buyer and transmits the payment to the marketplace seller."

The marketplace will not be held liable to their sellers for the overpayment of sales tax they declare, particularly where the seller is at fault for misinformation.