What are marketplace facilitator rules?
Marketplace facilitator rules make an online marketplace, rather than the third-party seller, responsible for collecting and paying sales tax or VAT on sales made through its platform. Every US state with a statewide sales tax has such rules, and the EU and UK apply similar deemed supplier rules to certain sales through online marketplaces.
Also calledmarketplace facilitator lawsdeemed supplier rulesmarketplace collection
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- US
- Every state with a sales tax
- EU deemed supplier
- Since 1 July 2021
- UK
- Since 1 January 2021
How marketplace facilitator rules work
In the US, states adopted marketplace facilitator laws after the 2018 Wayfair decision allowed them to tax remote sellers. The marketplace collects and remits sales tax on facilitated sales once it meets the state's threshold, and the seller usually excludes those sales from its own returns, though some states still count them towards the seller's nexus threshold or require registration. In the EU, since 1 July 2021, a marketplace is treated as the supplier for VAT on imported goods up to €150 and on goods sold to consumers within the EU by sellers established outside it. In the UK, since 1 January 2021, marketplaces account for VAT on goods sold by overseas sellers to UK customers and on imported consignments up to £135. Sellers must keep records that separate marketplace sales from direct ones. Avalara, Numeral and Fonoa handle sales tax and VAT for sellers and platforms.
Common questions
Do sellers on Amazon or Etsy still need to file sales tax returns?+
It depends on the state. Marketplace sales are usually taxed by the marketplace, but some states still require the seller to register or file, and the seller's direct sales remain its own responsibility.
Do marketplace sales count towards a seller's economic nexus?+
In some US states they do and in others they do not, so sellers need to check each state's rules when measuring whether they pass a threshold.
What is a deemed supplier in EU VAT?+
An online marketplace treated for VAT as if it had bought the goods from the seller and sold them to the customer, so it charges and pays the VAT. It applies to certain imports and sales by non-EU sellers.
Tax software for marketplace sales
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