Marketplace Facilitator FAQ
In this article:
- What is a marketplace facilitator?
- How do new marketplace facilitator laws affect my TaxJar Report?
- If the marketplace is collecting sales tax in this state, why is there a new state on my dashboard ?
- How do I avoid paying double sales tax on transactions collected and remitted by the marketplace?
- Do I still need to file returns if Amazon, Etsy eBay and/or Walmart are collecting on my behalf?
- Can I still AutoFile my sales tax returns with TaxJar?
- Should I cancel AutoFile
What is a Marketplace Facilitator?
A marketplace facilitator is a business or organization that contracts with third parties to sell goods and services on its platform and facilitates retail sales.
- Recently, several states have created legislation that requires marketplace facilitators to collect and remit sales tax on behalf of their third-party sellers’ transactions.
- We explain more about Marketplace Facilitators State by State here.
- We discuss How Should Remote Sellers Handle Marketplace Facilitator Laws.
How does this affect my TaxJar Report for states where marketplace facilitator laws are in effect?
Your Sales Tax Reports will always be updated to specifically reflect sales that had tax collected and remitted by Marketplaces that are supported as Marketplace Facilitators in TaxJar Reports.
- You can read more about how TaxJar handles this tax here.
If Amazon, Etsy, eBay, and Walmart are collecting sales tax in this state for me, why is it on my dashboard?
If you sell through a Marketplace that has agreed to begin collection in this state, you'll see sales tax collected starting on the effective date for each Marketplace.
- As we mention in this article when our system sees sales tax collected we will add that state as a suggested nexus state on your TaxJar Dashboard.
- If you haven't set up a filing frequency for a state in your account's State nexus settings, our system will default the state to a monthly frequency and due date on your Dashboard after we see tax collected.
- We default to a monthly frequency and due date if you haven't yet adjusted any frequencies on your end, but the state itself would ultimately determine your exact filing frequency.
- If you are currently opted-in to receive email reminders for your sales tax due dates, you'll also see this listed as a state where you have an upcoming monthly return due in those emails.
Your next step depends on whether or not you have nexus in the state and if you make sales on platforms outside of the cart that is automatically collecting sales tax on these states' orders as a Marketplace Facilitator.
- Registration and filing requirements vary per state and we recommend reviewing general guidance for each state here.
- If you have a question specific to your current status and business operations, we recommend consulting the state directly, your legal advisor or a sales tax expert.
If Amazon, Etsy, eBay, and Walmart are collecting and remitting sales tax on my behalf, how do I avoid double-paying on sales tax?
- Your Marketplace sales will be reflected accurately in your Reports so that you're not paying twice for sales tax the Marketplace has already remitted.
- When viewing your individual State Reports, you'll see a section designated for Marketplace sales.
- We explain more in this article about Marketplace Transactions and provide state-specific general guidance for Marketplace Facilitators and your TaxJar Reports here.
- When available, we provide specific instructions per state on how to enter your Marketplace collected sales information when filing manually.
- Please note, as some states may not require jurisdiction breakdowns of your Marketplace sales and your TaxJar Reports have been updated with total marketplace amounts as we explain here.
Do I still need to file returns if Amazon, Etsy eBay and/or Walmart are collecting on my behalf?
Please note, Amazon, Etsy, eBay and Walmart will not file a sales tax return for you as many states might require.
- Your next step depends on whether or not you have nexus in the state and if you make sales on platforms outside of the cart that is automatically collecting sales tax on these states' orders as a Marketplace Facilitator.
Can I still AutoFile my sales tax returns with TaxJar?
- Yes, your Expected Sales Tax Report takes into account that Amazon, Etsy, eBay and Walmart have already remitted the sales tax for these states.
- TaxJar's AutoFile service which is always based on the Expected Sales Tax Report will file your sales tax return in compliance with how the state expects to see it.
- To be clear, for these supported marketplaces, you will not be double-paying the sales taxes when you're enrolled in AutoFile.
Should I cancel AutoFile?
We recommend that you have confirmed that you are no longer required to file returns in this state.
- Although your Marketplace is automatically collecting and remitting tax on your sales, they will not file a return to specifically report the sales tax that they collected on your behalf.
- Many of the states still require the sellers to remain registered and file returns to report those amounts that we remitted by the Marketplace (even to file a $0 return to report that all of your sales were Marketplace sales.)
- We detail the specific post-Marketplace registration and filing requirements for sellers in each of the states with Marketplace Facilitator laws here.
Before you stop filing, we'd recommend checking the state's guidelines here so you can be certain that you've covered all of your bases on the state's end first.