3 ms·
Thanks for the mention, Eli. I work for Avalara on their social media team. We are staying on top of these changes and I wanted to share this clarification. Mo
by MaureenS 8y ago
Thanks for the mention, Eli. I work for Avalara on their social media team. We are staying on top of these changes and I wanted to share this clarification.
More than a dozen states impose a sales tax collection obligation on marketplace facilitators (Amazon, Etsy, eBay, etc.). In addition to collecting and remitting tax on their own sales into the state, if they have any, marketplace facilitators will soon be responsible for collecting and remitting sales tax on all sales made through the marketplace in even more states. Most recently, Wyoming and California have joined the ranks; Virginia is close, which we expect to be on the books by the middle of this year. We anticipate every state to have a law like this on the books by Q1 of 2020.
Where I see a lot of confusion is from sellers who are struggling to understand economic nexus regulations that are based on reaching sales thresholds. Adding to the confusion, these thresholds vary from state-to-state.
If you'd like to learn more, our recent blog "How marketplace facilitator sales tax laws in different states affect marketplace sellers" covers this in depth. https://avlr.co/2VFKvCa https://avlr.co/2VFKvCa Here’s an excerpt:
"Now that states are no longer prohibited from taxing remote sales, they’re looking for the most efficient ways to bring in remote sales tax revenue. Approximately 35 states have adopted economic nexus laws, which impose a sales tax collection obligation on businesses with significant economic activity in the state. Such economic nexus laws generally provide an exception for small sellers (defined differently in different states).
Many marketplace sellers qualify for these small seller exceptions, meaning they’re safe from the long arms of the tax authorities. But states that require marketplace facilitators to collect and remit sales tax on behalf of their sellers still reap revenue from those transactions. It’s a win-win for states, which is why we can expect to see marketplace facilitator sales tax laws proliferate.
It’s important to note that marketplace sellers aren’t necessarily freed from all responsibilities under these laws. In fact, these laws can complicate matters a bit because they change the rules. Ordinarily, businesses that don’t have nexus with a state (an obligation to collect sales tax) don’t have reporting requirements. That’s not the case with all marketplace facilitator sales tax laws, as you’ll see below."