New collection requirements for marketplaces are effective in Hawaii, Illinois, Michigan, and Wisconsin as of January 1, 2020, with marketplace facilitator laws now enforced in a whopping 39 states (including Washington, D.C.).
At this time last year, only seven states required marketplace facilitators to collect and remit sales tax on behalf of third-party sellers, and four of them allowed marketplaces to sidestep the collection requirement by complying with use tax notice and reporting requirements. What a difference one year has made.
Collection requirements for marketplace facilitators generally apply to marketplaces with either a physical presence in the state or substantial sales into the state (economic nexus).
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by Gail Cole
January 27, 2020