Multi-State – How To Handle Marketplace Tax & Economic Nexus

A marketplace facilitator is an online marketplace that lists, collects payment, and/or fulfills orders on behalf of a third-party seller. Amazon is probably the first example that comes to mind just because of its massive online presence. However, other online marketplaces like Walmart, Etsy and eBay are also considered marketplace facilitators.

Recently, several states have created legislation that requires marketplace facilitators to collect and remit sales tax on behalf of their third-party sellers’ transactions, including OklahomaWashington and Pennsylvania. These laws benefit the states because they can collect more sales tax from fewer entities, which results in simpler compliance for the states. For sellers, the benefit lies in having sales tax for certain transactions handled by the facilitator.

The recent Supreme Court case South Dakota v. Wayfair has added a new layer of complexity to marketplace facilitator laws and has left many business owners wondering what they should do to stay in compliance with all of the recent changes to sales tax laws.

by Lizzy Greenburg
October 30, 2018

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