Sales Tax for Marketplace Facilitators & Sellers
As an online seller, the intricacies of sales and use tax responsibilities can be bewildering, but you're not alone. In recent years, changes in determining nexus and the associated tax obligations have added complexity to state and local tax compliance.
Navigating Sales Tax Complexity
Why Choose "The Sales Tax People"?
The introduction of economic nexus, catalyzed by the landmark Wayfair vs. South Dakota Supreme Court decision, has shifted the landscape of sales tax. Economic nexus considers factors beyond physical presence and focuses on where your customers are located. For many taxpayers, this means that having customers in multiple states necessitates a thorough nexus review.
Complicating matters further, states have enacted marketplace facilitator laws, mandating that platforms like Amazon, Walmart, and Etsy collect and remit tax on behalf of third-party sellers. However, these laws come with different effective dates, and marketplace facilitators often implement them on varying timelines.
Navigating Your Compliance Responsibilities
For sellers who exclusively utilize marketplace facilitator platforms, your obligations may be more straightforward today than in the past. In many states with marketplace facilitator laws, the responsibility for tax collection lies with the platform. This could potentially lead to an excess of sales tax registrations, as some states provide guidance on closing sales tax accounts for sellers exclusively on these platforms.
However, economic nexus and marketplace facilitator laws can still introduce complexity into your compliance responsibilities. You may need to remain registered for sales tax, register for state income tax, and manage tax remittances required both by you and the marketplace facilitator.