Compliance

Marketplace Facilitator Laws

US state laws that make the marketplace, rather than the individual seller, responsible for collecting and remitting sales tax.

Aliases: Marketplace facilitator, marketplace provider laws, 平台代征代缴法, 电商平台销售税代收

The shift the laws created

After the 2018 South Dakota v. Wayfair decision, US states could require remote sellers to collect sales tax based on economic nexus. Collecting from thousands of small sellers proved impractical, so states turned to the platform. Marketplace facilitator laws now exist in every state with a sales tax, plus the District of Columbia.

Under these laws, the marketplace computes, collects and remits tax on sales it facilitates. The seller's own collection duty is generally extinguished for those transactions, though the seller usually remains registered and responsible for its own direct sales.

What counts as facilitation

Definitions vary but usually cover listing, payment processing, fulfilment and customer service. A platform that handles payment and listing is a facilitator even if the seller ships. Some states extend the definition to delivery services.

Why sellers still need registrations

Three reasons. Direct sales through a website or a wholesale channel are not facilitated. Some states require the seller to keep a registration so the facilitator can report by account. And a few states allow a seller to opt out of facilitation, which shifts the duty back.

The data problem

Facilitated sales are reported to the seller and to the state, but the reconciliation between platform reports and the seller's books is where audits start. Common findings include a seller remitting tax twice on facilitated sales, failing to remit on direct sales, or misallocating tax to the wrong jurisdiction because the ship-to address was incomplete.

Interaction with other regimes

These laws govern sales tax, not income reporting. DAC7 in the EU is an information-reporting regime, and OSS is a VAT mechanism; neither maps onto US state sales tax. Identity and disclosure obligations for high-volume sellers come from a different statute, the INFORM Consumers Act, and seller verification processes feed both. Platform account risk sits with account health metrics rather than tax law.

Practical control

Maintain a matrix of states where you have economic nexus, whether the marketplace collects, and which of your channels are direct. Reconcile platform tax reports quarterly rather than annually, because corrections are cheaper before a filing cycle closes.

Primary source: State marketplace facilitator statutes; South Dakota v. Wayfair, 585 U.S. 162 (2018).

FAQ

Do I still need a sales tax permit if marketplaces collect for me?

Often yes. Many states require registration so that facilitated sales can be attributed, and you need it for any direct sales. Requirements differ by state.

Do facilitator laws cover all taxes?

They cover state and local sales and use taxes on facilitated sales. Income tax, excise tax and fees are outside their scope.

What if I sell on my own website as well?

Direct sales are not facilitated, so you collect and remit yourself once you have nexus in the destination state. Most sellers operate both models and need both processes.

How do I avoid double-paying tax?

Reconcile platform reports against your filings each period and exclude facilitated transactions from your own returns. Keep the platform reports as supporting documentation.

Is this the same as the INFORM Act?

No. Marketplace facilitator laws concern tax collection. The [INFORM Consumers Act](/wiki/inform-consumers-act) concerns disclosure of seller identity to consumers and to the platform.