- The 2018 Wayfair decision and the rise of marketplace facilitators like Amazon, Etsy, and eBay have transformed sales tax.
- Marketplace facilitators are businesses that contract with third parties to sell goods and services on their platforms.
- States have different definitions of marketplace facilitators and their sales tax laws.
- States realized that platforms like Amazon were taxing their own sales but not charging sales tax on third-party sales.
- States see marketplace facilitators as a rich source of tax revenue.
- In Iowa, marketplace facilitators generating $100,000 or more in sales must get an Iowa retail sales tax permit and file sales tax returns.
- Facilitators have different compliance obligations than sellers.
- Fulfilling sales tax obligations can be complicated for facilitators and sellers, especially when dealing with multiple states and local tax jurisdictions.
- Sales made through a retailer’s own website and through a third-party marketplace count toward economic nexus thresholds in many states.
- Inventory stored by a marketplace facilitator can trigger physical nexus for a retailer.
- Some states are easing off on physical nexus requirements for retailers with inventory stored by marketplace facilitators.
Source: taxconnex.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
