Marketplace Facilitators Explained
What is a Marketplace Facilitator?
Think of marketplace facilitators as the big online platforms – like Amazon, eBay, or Etsy – where anyone can list their products to sell. These platforms actively help merchants sell their products by processing payments, listing your items, sometimes even handling shipping. They’re like your digital sales floor.
The Law Steps In
Some people in the government looked at how online sales were growing and decided to make it easier to collect to increase compliance. They came up with laws that make these big platforms (the facilitators) responsible for collecting and sending in the sales tax on the items that you sell. It’s a win for the states because they deal with fewer, bigger entities rather than chasing down thousands of small sellers. And honestly, it’s less headache for sellers too, because handling sales tax can be a pain.
Why These Laws Make Sense
Before these laws, if you sold through a platform but didn’t have a big presence (nexus) in a state, you might not bother with collecting sales tax there. The state misses out, and when they try to chase down sellers not paying up, it costs them a lot. By making the big platforms deal with sales tax, states simplify their lives and make sure they get their money.
What You Need to Know as a Seller
In most cases, you won’t have to worry about collecting sales tax for sales made through the platform. That is now part of the platform’s job. But, if you sell directly through your own website or elsewhere, you’re back to handling sales tax yourself.
Even in states where the platform collects for you, keep your sales tax permits up to date. Why? Because if you do any business outside that platform, you’ll need to report and pay up like usual. Plus, some states want you to file returns saying you had zero sales outside the platform, or they might have you register differently.
Staying On Top of Things
This stuff changes all the time. New laws pop up; old ones get tweaked. Stay informed or chat with a sales tax expert now and then to make doing everything you need.
Filing When the Platform Collects For You
Platforms like BreezyFile can help sort out what sales tax the platform collected and adjust your filings accordingly.
The Bottom Line
States are pretty keen on these marketplace facilitator laws because it simplifies their life and makes sure they collect sales tax efficiently. For sellers, it can take a load off your shoulders, but you’ve still got to be vigilant, keep your paperwork in order, and make sure you understand the rules of the game.
Just like running any part of your business, it's about staying informed, asking for help when you need it, and keeping on top of your responsibilities. Hope that helps clear things up a bit!