Understanding Sales Tax and Marketplace Facilitator Rules for Small Businesses in E-Commerce

• Marketplaces like Amazon, Etsy, and DoorDash are primary digital sales channels, connecting buyers and sellers and facilitating transactions.
• Marketplace facilitators are typically responsible for collecting and remitting sales tax on transactions, not the individual sellers.
• Small businesses must understand marketplace facilitator rules to avoid compliance issues, unexpected liabilities, and audit risks.
• Most states require the marketplace, not the seller, to handle sales tax, including processing returns and tax corrections.
• Double taxation can occur if both the facilitator and retailer tax the same transaction, often due to software limitations; some states allow one party to claim a deduction to resolve this.

Source: accountants.sva.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.

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