Multi State – New Sales Tax Collection Requirements for Marketplaces

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