Maryland Sales Tax Filing Update October 2019: Marketplace Facilitator Laws
Maryland passed a law requiring Marketplaces to collect and remit sales tax on sales facilitated through the marketplace effective October 1, 2019.
• Amazon, eBay, Etsy and Walmart began this collection on October 1, 2019.
In this article, we summarize Maryland's state guidance on the following questions:
- Do I need to register for a sales tax license in Maryland?
- Should I cancel my existing registration if all my sales are marketplace-collected?
- Do I need to collect sales tax on Maryland sales on non-marketplace platforms?
- Do I still need to file returns in Maryland?
- How do I file without paying double tax on the sales that were collected and remitted by my Marketplace?
I've never registered for a Maryland license. Do I need to register for a sales tax license in Maryland now?
You do not have to register if you are a marketplace seller and all your sales are through a marketplace facilitator.
I have already registered for a license in Maryland but and all of my sales are Marketplace-only sales. Should I cancel my existing registration?
No. If you are a marketplace seller who has already registered due to physical presence (such as inventory stored in your Marketplace's warehouse) or you have voluntarily registered, you should remain registered, according to the DOR.
Do I need to collect taxes on my Maryland sales on other platforms?
Yes--if you have nexus in the state (physical or economic) and you make sales to customers in Maryland on platforms outside of the marketplace that is automatically collecting and remitting, you will also need to collect tax on your end on the Maryland orders that are processed on the other platforms.
Do I still need to file returns in Maryland?
Yes--once you register for a license, you will be required to file a return based on the frequency the state has assigned you.
- If you've previously registered, the state expects you to remain registered and continue to file returns. If all your sales are Marketplace collected, you would still need to file a return stating reporting no sales activity.
I still need to file returns in Maryland. How do I do this without paying double tax on the sales that were collected and remitted by my Marketplace?
When you file, please note that for your Maryland Report, your Marketplace Sales are included in your Gross Sales.
- Please enter this amount for your "Gross Sales" on your return.
- Then, exclude "Marketplace Sales" on this report from "Sales subject to (6%) rate" on your return.
If all of your sales are Marketplace sales, once you deduct the marketplace sales, you will need to file a $0 return.
- If you make sales on other platforms in addition to the Marketplace, you'll need to make sure you remit the tax you collected for those sales when you file.
- If you're enrolled in AutoFile for Maryland, our system will handle the Marketplace sales deduction process automatically.