Upcoming 2019 Marketplace Facilitator Tax Dates

By the end of 2019, more than 15 states would have passed legislation that requires marketplaces like Amazon to collect and remit sales tax.

That’s in addition to states that have already passed legislation in 2018 requiring marketplace providers to collect and remit sales tax.

These states and the District of Columbia require marketplaces to collect and remit sales taxes so far in 2019:

  • Alabama – January 1, 2019
  • District of Columbia – April 1, 2019
  • Iowa – January 1, 2019
  • Nebraska – April 1, 2019
  • South Dakota – March 1, 2019

Other states with rules regarding marketplace provider or marketplace facilitator rules for 2019 are listed below:

  • California – October 1, 2019
  • Florida – July 1, 2019 (pending)
  • Indiana – July 1, 2019 (pending)
  • Kentucky – July 1, 2019
  • Maryland – October 1, 2019 (pending)
  • New Mexico – July 1, 2019 (pending)
  • New York – September 1, 2019 (pending)
  • North Dakota – October 1, 2019
  • Texas – September 1, 2019 (pending)
  • Vermont – July 1, 2019 (pending)
  • Virginia – July 1, 2019
  • West Virginia – July 1, 2019
  • Wyoming – July 1, 2019

This is by no means a complete list. Revisions may change the start date, or bills may not pass.

Visit the state’s tax department website for more information regarding remote sales tax collection, marketplace facilitator rules, economic nexus, or pending legislation related to the June 2018 Wayfair decision.

The links below will lead you directly to the relevant bill from each state.

California

California is considering Bill AB-147 that will require marketplace facilitators to collect and remit sales tax. Signed in April 2019, marketplace facilitators will be required to collect and remit sales tax on behalf of its sellers starting October 1, 2019.

Florida

If passed and signed, SB 1112 will go into effect for sales made on and after July 1, 2019.

Indiana

Read more about SB 322 from Indiana’s legislative website. If passed, this will go into effect July 1, 2019.

Kentucky

HB 354 will go into effect on July 1, 2019.

Maryland

SB 728 will require marketplace facilitators to collect on and after October 1, 2019.

New Mexico

New Mexico uses a gross receipts tax, which is usually passed onto the customer. HB 579 would require marketplace providers to collect and remit gross receipts taxes starting July 1, 2019.

New York

New York Bill A03347 will require marketplace providers to collect sales tax starting September 1, 2019.

North Dakota

Read the text of SB 2338 to learn more about how North Dakota is requiring marketplace facilitators to collect sales tax starting on October 1, 2019.

Texas

HB 1525 if passed and signed will go into effect for September 1, 2019.

SB 890 is also pending with the same effective date of September 1, 2019.

Vermont

H. 117 will require marketplace facilitators to collect on July 1, 2019 if passed and signed.

Virginia

SB 1083 requires marketplace facilitators to collect sales tax effective July 1, 2019.

West Virginia

House Bill 2813 requires marketplace facilitators to collect sales tax effective July 1, 2019.

Wyoming

HB 69 was signed on February 15, 2019 and requires marketplace facilitators to collect sales tax effective July 1, 2019.

Other states may have pending legislation or effective dates in 2020. If you sell on Amazon, you can view more information about marketplace taxes through this Amazon link.

eBay sellers can visit the marketplace tax collection list as well. Note the different start dates.

If you use SellerZen to automate integration between Amazon and QuickBooks Online, we’ll also handle marketplace facilitator taxes. Click on the link below in the related articles section to learn more.

Starting on January 1, 2020, the list will expand and include more states that require marketplace providers and facilitators to collect and remit sales taxes.

View related articles:

Amazon to collect sales tax for Nebraska and District of Columbia

Starting April 1, 2019, Amazon will collect sales tax on sales to Nebraska and District of Columbia residents.

Many states are passing legislation that requires Amazon to collect and remit sales tax on behalf of its sellers because of the Supreme Court ruling on South Dakota vs. Wayfair, also referred to as the Wayfair Decision. Read the PDF from the Supreme Court.

Take a look at the list of states where Amazon collects and remits sales taxes on behalf of its sellers.

Visit Nebraska’s Department of Revenue website for more information.

Visit the District of Columbia’s Office of Tax and Revenue website for more information.

With the addition of these two tax agencies, Amazon now collects and remits on behalf of its sellers for 11 tax agencies:

  • Alabama
  • Connecticut
  • District of Columbia
  • Iowa
  • Minnesota
  • Nebraska
  • New Jersey
  • Oklahoma
  • Pennsylvania
  • South Dakota
  • Washington

Several states will be requiring marketplaces like Amazon to collect in 2019. This includes California if AB-147 is signed. More states are likely to require marketplaces to collect and remit sales tax on behalf of their sellers.

If you’re using SellerZen to sync with your Amazon and QuickBooks Online account, then you’ll need to add Nebraska and District of Columbia to your sales tax agencies so that we can process sales documents properly.

Learn more about how SellerZen handles Marketplace Facilitator taxes.

Read about other related articles:

QuickBooks Online Displays Wrong Sales Tax Values

Some QuickBooks Online users who override automatically calculated sales tax may see sales tax values incorrectly displayed when reviewing invoices.

Sellers who track marketplace facilitator taxes collected by online marketplaces like Amazon are more likely to see this issue because they’ll override taxes on documents to match what the marketplace collects.

Instead of displaying the value entered, QuickBooks Online displays the value that it automatically calculates.

This sometimes results in the invoice displaying a Balance due even when payment was received for the correct amount.

In the image below, an invoice was created for a customer in Alabama. Sales tax collected was $0.72 and saved. When the invoice is re-opened, QuickBooks Online displays the automatically calculated sales tax of $0.36.

QuickBooks Online invoice showing balance du

The Balance due field may be negative (as in the case of the image above) or positive.

This error is just a QuickBooks Online display issue. The amount that you originally recorded on the invoice was properly saved and recorded in the tax liability account.

To verify this, go to Taxes > Reports > Tax liability report in QuickBooks Online.

QuickBooks Online Sales Tax Liability Reports

You may need to adjust the date period so that QuickBooks Online includes the invoice in question.

Date select for QuickBooks Online sales tax

Find the state that was on the invoice (in this case, Alabama) and click on the amount collected to bring up the individual transactions.

Sales tax liability report for Alabama

Since we only have one transaction as a sample, we can verify that QuickBooks Online has correctly recorded the original sales tax amount entered on the invoice.

If you have more than one transaction, click on the amount collected to get a detailed transaction report.

Invoice transaction report for sales tax liability

The transaction report will give you a list of the transactions that affect this tax liability account. You can look up Document Numbers or view the document by clicking on it under the Transaction Type column.

Whether you’re entering these documents manually or using SellerZen to automatically import your Amazon transactions into QuickBooks Online, these display errors don’t affect your accounts.

The value you initially entered is correctly recorded for any affected accounts.

Interested in other QuickBooks Online articles? Learn more below.

South Dakota Marketplace Provider Sales Tax to begin March 1, 2019

South Dakota’s marketplace provider sales tax bill will go into effect on March 1, 2019.

If you’re a remote seller without a physical presence in South Dakota, then the sales tax rule went into effect on November 1, 2018.

From the South Dakota Department of Revenue’s website, remote sellers who exceed these thresholds are required to register, collect, and remit sales tax:

  • Your business’s gross revenue from sales into South Dakota exceeded $100,000; or
  • Your business made sales for delivery into South Dakota in 200 or more separate transactions

If you’re selling through Amazon FBA, then Amazon will likely collect and remit on your behalf. Speak to a tax professional if you believe you exceed the exemption for South Dakota or any other state.

While most states have $200,000 or 200 transactions, some states such as South Dakota have lower limits of $100,000 or 200 or more separate transactions. Some states may even have $100,000 or 100 transactions. See our link below for a collection of the small seller exemptions listed by state.

Most states have some kind of remote seller sales tax legislation based on an economic, rather than physical, nexus. That means nexus is defined through economic activity (gross sales), rather than physical presence.

South Dakota joins a growing list of states that are requiring marketplace facilitators to collect sales tax on sales. Many more states are considering legislation or have pending legislation regarding sales tax, so expect more changes in 2019.

Using SellerZen to automatically import orders from Amazon into QuickBooks Online? Simply add South Dakota as a sales tax agency in QuickBooks Online. We’ll create the proper documents so you can track sales tax collected for those tax agencies.

Read our article on 50-state list of remote seller and marketplace provider tax to get a compiled list of the states and their exemptions. You’ll also find direct links to the tax agency’s website so you can learn more.

Alabama and Iowa marketplace facilitator sales tax rule to begin on January 1, 2019

Both Alabama and Iowa will begin to require marketplace facilitators to collect sales tax on orders or report sales starting on January 1, 2019.

As with previous states, Amazon is likely to collect and remit your behalf if you sell through FBA.

Other marketplaces like eBay and Etsy have also followed suit by collecting sales tax on behalf of their sellers.

Don’t forget about Amazon’s Sales Tax Collection Fee, which is 2.9% of the sales tax collected. For example, if the order has a sales tax of $10, then you’d pay an additional sales tax collection fee of 29¢ on top of other fees for the order.

Alabama’s rule for remote sellers started on October 1, 2018. Alabama’s Department of Revenue (ADOR) states the following:

Remote sellers with annual Alabama sales in excess of the rule’s $250,000 small seller exception should register for the Alabama Simplified Sellers Use Tax Program (SSUT) and begin collecting no later than October 1, 2018.

The rule for marketplace facilitators is below.

In addition to the collection requirements for remote sellers, Ala. Act 2018-539 requires marketplace facilitators with Alabama marketplace sales in excess of $250,000 to collect tax on sales made by or on behalf of its third-party sellers or to comply with reporting and customer notification requirements. The Act mandates compliance with reporting or remitting requirements on or before January 1, 2019.

Read more from ADOR’s Sales and Use Tax Guidelines for Online Sellers.

Iowa’s Department of Revenue requires both remote sellers and marketplace facilitators to collect sales tax starting on January 1, 2019.

From the Iowa Department of Revenue’s website:

Effective January 1, 2019 marketplace facilitators and remote sellers that exceed a certain amount of revenue or transactions must charge Iowa sales tax, including local option sales tax, the same as retailers with a physical presence in Iowa.

The small seller exception for Iowa is a bit lower than Alabama’s exception:

has $100,000 or more in gross revenue from Iowa sales or makes 200 or more separate sales transactions into Iowa.

Alabama and Iowa join these states in requiring marketplace facilitators to collect sales tax or report sales:

  • Connecticut
  • Minnesota
  • New Jersey
  • Oklahoma
  • Pennsylvania
  • Washington

Other states are sure to follow in 2019, with South Dakota requiring marketplace facilitators to begin collecting or reporting on March 1, 2019.

Many sellers have a mix of FBA and FBM sales, and combined sales may meet or exceed the small seller exemptions for the states. Be sure to speak to a tax professional about your business.

Interested in a comprehensive list of remote seller and marketplace facilitator tax rules? Take a look at our 50-state list of remote seller and marketplace facilitator taxes.

50-State List of Remote Seller Sales Tax and Marketplace Facilitator Tax Rules

Own an ecommerce business and want to see a consolidated list of remote seller sales tax requirements? Look no further!

Many states have passed marketplace tax laws or marketplace facilitator tax laws that require marketplaces like Amazon and eBay to collect sales tax or provide reports on applicable sales.

A lot of marketplaces now collect and remit sales tax on behalf of their sellers. That’s good news for sellers because it reduces the cost of compliance, but many questions and uncertainties still remain. But what about those states that don’t require marketplaces to collect?

Amazon’s Marketplace Tax Page

eBay’s Sales Tax Page

We’ll provide the dates and marketplace facilitator and/or remote seller sales tax requirements as stated on the tax agency’s websites so that you can see them all in one place.

States may have different requirements regarding collection, remittance, and reporting, so you’ll want to visit the tax agency’s website for current information.

We’ll do our best to provide accurate information, but many states have pending legislation or litigation that may affect their laws. Visit the state’s tax agency for updates.

You should talk to a tax professional about your business. 

Alabama

Called the Simplified Sellers Use Tax, Alabama will require marketplace facilitators with sales to Alabama residents in excess of $250,000 to collect sales tax beginning on January 1, 2019. From the Alabama Department of Revenue website:

Remote sellers with annual Alabama sales in excess of the rule’s $250,000 small seller exception should register for the Alabama Simplified Sellers Use Tax Program (SSUT) and begin collecting no later than October 1, 2018.

Alaska

Alaska has no state sales tax, but cities may still charge sales tax. Visit the Department of Revenue’s website for more information.

Arizona

Arizona has a transaction privilege tax (TPT) instead of a sales tax. Individuals are required to pay a use tax. Visit the Department of Revenue’s website for more information.

Arkansas

Read more about remote sellers on the Department of Finance and Administration’s website.

California

Publication 109 on Internet Sales gives sellers more information regarding marketplace sellers. Publication 77 details whether or not you’re required to collect sales tax if you’re an out-of-state seller and are engaged in business in California.

Post-Wayfair rule from the Department of Tax and Fee Administration for remote sellers beginning April 1, 2019:

  • The retailer’s sales into California exceed $100,000, or
  • The retailer made sales into California in two hundred (200) or more separate transactions.

Colorado

Colorado’s Department of Revenue has this to say about out-of-state retailers and economic nexus. The start date is December 1, 2018.

Any out-of-state retailer with substantial nexus is required to register for a sales tax license and to collect and remit Colorado sales taxes.  Any out-of-state retailer that does not have substantial nexus is not required to register for a sales tax license and is not required to collect and remit sales tax.  Retailers without substantial nexus are those who have: 1) no physical presence in the State of Colorado; 2) less than $100,000 in gross sales into the State of Colorado in the current or previous calendar year; and 3) fewer than 200 transactions into the State of Colorado in the current or previous calendar year.

Connecticut

Connecticut Department of Revenue Services Special Notice 2018(5) has more information regarding the collection of sales tax. See all 2018 Special Notices.

Both Marketplace facilitators and remote sellers are required to collect sales tax effective December 1, 2018.

The threshold for out-of-state sellers is:

1. Their Connecticut sales exceed a threshold of 200 transactions during the preceding twelvemonth period (ending September 30) (previously, the threshold was 100 sales);

and

2. Their gross receipts are $250,000 or more during that twelve-month period.

Delaware

Delaware does not have a state sales tax, but it does have a gross receipts tax. Learn more from the Delaware Division of Revenue Internet Sales page.

Florida

Visit Florida’s Department of Revenue site for information regarding out-of-state businesses. Florida has yet to release any changes regarding economic nexus, but that may change in 2019.

Georgia

George has passed House Bill 61 requiring remote sellers to collect and remit or report sales tax. Effective January 1, 2019:

Obtained gross revenue, in an amount exceeding $250,000.00 in the previous or current calendar year, from retail sales of tangible personal property to be delivered electronically or physically to a location within this state to be used, consumed, distributed, or stored for use or consumption in this state, OR

Conducted 200 or more separate retail sales of tangible personal property in the previous or current calendar year to be delivered electronically or physically to a location within this state to be used, consumed, distributed, or stored for use or consumption in this state.

Hawaii

Hawaii has a general excise tax. Tax announcement 2018-10 provides more details about remote sellers and excise tax collection, remittance, and reporting. Direct link to 2018-10 PDF. Effective date is July 1, 2018.

From the PDF:

(1) Taxpayer has a physical presence in Hawaii;

(2) In the current or preceding calendar year, taxpayer has gross income or gross proceeds of $100,000 or more from any of the following, or combination of the following, activities:

a. Tangible property delivered in Hawaii;

b. Services used or consumed in Hawaii2 ; or

c. Intangible property used in Hawaii; or

(3) In the current or preceding calendar year, taxpayer has entered into 200 or more separate transactions involving any of the following, or combination of the following, activities:

a. Tangible property delivered in Hawaii;

b. Services used or consumed in Hawaii; or

c. Intangible property used in Hawaii.

Idaho

Visit the Sales/Use Tax Hub from the State Tax Commission. The tax commission has this to say about out-of-state shopping:

Internet and catalog companies that have a business location or employees in Idaho must collect Idaho sales tax. And a few businesses without an Idaho presence also voluntarily collect the tax.

Illinois

Here is the link for the Illinois Department of Revenue’s page on Wayfair.

Pursuant to the enactment of Illinois Public Act 100-587 and the subsequent U.S. Supreme Court decision in South Dakota v. Wayfair, Inc, remote (out-of-state) sellers with either cumulative gross receipts from Illinois sales of $100,000 or more, or 200 or more separate Illinois transactions, are required to register to collect and remit Illinois Use Tax for sales of tangible personal property made on or after October 1, 2018.

Indiana

Read the tax bulletin from the Department of Revenue or visit the Wayfair-related page on the Department of Revenue’s page.

Collection goes into effect on October 1, 2018 with the threshold below:

The threshold applies regardless of whether any of the 200 transactions would have been subject to Indiana sales or use tax or whether any of the $100,000 of revenue was generated by taxable sales.

Iowa

Both remote sellers and marketplace facilitators are required to collect taxes starting January 1, 2019 if they meet one of the following:

$100,000 or more in products and/or services or

200 or more separate sales transactions

See the rule for remote sellers and marketplace facilitators.

Kansas

See more information about sales tax from the Department of Revenue.

Kentucky

Kentucky Department of Revenue has this threshold for remote sellers:

HB 487, effective July 1, 2018, requires remote retailers with 200 or more sales into the state or $100,000 or more in gross receipts from sales into the state to register and collect Kentucky sales and use tax.

Louisiana

More clarity for remote sellers is currently in the works. Visit the Department of Revenue Remote Sellers website for more information.

Maine

Maine Revenue Services has a website with links to guidance for remote sellers. The website lists this threshold for remote sellers with an effective date of July 1, 2018:

A seller not otherwise required to register under Maine sales tax law meets the requirements of section 1951-B if, during the current or previous calendar year, it either sold tangible personal property, products transferred electronically, or taxable services for delivery into Maine in at least 200 separate transactions, or its gross revenues from Maine sales of tangible personal property, products transferred electronically, or taxable services exceeded $100,000.

Maryland

Visit the Comptroller of Maryland’s website to learn more about sales and use tax. According to the September 2018 Sales and Use Tax alert, the threshold for remote sellers is. This is effective October 1, 2018.

Gross revenue from the sale of tangible personal property or taxable services delivered into Maryland exceeds $100,000; or

Sales of tangible personal property or taxable services for delivery into Maryland in 200 or more separate transactions.

Massachusetts

Visit Massachusett Department of Revenue’s Sales and Use Tax page for more information.

Michigan

Read the Department of Treasury’s website on Sales and Use Tax for Remote Sellers. The page states:

Consistent with Wayfaireffective after September 30, 2018, Treasury will require remote sellers with sales exceeding $100,000 to – or more than 200 transactions with – purchasers in Michigan in the previous calendar year to pay sales tax.

Minnesota

Minnesota required marketplace facilitators or providers to collect sales tax on October 1, 2018.

Read the Sales Tax FAQ for more information, including the small seller exemption:

Minnesota law provides a Small Seller Exception, which does not require remote sellers to collect sales tax until their sales during a period of 12 consecutive months total either:

  • 100 or more retail sales shipped to Minnesota
  • 10 or more retail sales shipped to Minnesota that total more than $100,000

Mississippi

Visit the Department of Revenue’s site for Online Seller Guidance regarding sales tax. Or view the PDF directly. The threshold is quoted below.

Remote sellers with annual Mississippi sales in excess of the $250,000 small seller exception should register for a Mississippi Use Tax Account and begin collecting tax no later than September 1, 2018.

Missouri

Missouri House Bill 2390 deals with remote sellers and sales tax.

Montana

Montana has no state sales tax. Visit the Department of Revenue’s sales tax page for more information.

Nebraska

See the Department of Revenue’s FAQ on the collection of sales tax for remote sellers. The effective date for remote sellers to collect sales tax is January 1, 2019.

The small seller exemption is

Remote sellers are only required to register and collect Nebraska tax if they have more than $100,000 of sales into Nebraska or 200 or more separate transactions for delivery into the state annually.

Nevada

Read the Department of Taxation’s FAQ on Remote Sellers. The start date is October 1, 2018. See their exemption below.

Remote sellers are only required to register and collect Nevada sales or use tax if, in the previous or current calendar year, they have:

–  More than $100,000 of retail sales into Nevada, or
–  200 or more separate retail transactions for delivery into the state

New Hampshire

There is no state sales tax for New Hampshire.

New Jersey

See the Department of Taxation’s Sales and Use Tax information page for more information. New Jersey required marketplace providers to collect sales tax on November 1, 2018.

If you’re a remote seller, the threshold is:

  • The remote seller’s gross revenue from sales of tangible personal property, specified digital products, or services delivered into New Jersey during the current or prior calendar year, exceeds $100,000or
  • The remote seller sold tangible personal property, specified digital products, or services delivered into New Jersey in 200 or more separate transactions during the current or prior calendar year.

New Mexico

New Mexico has a gross receipts tax. The Santa Fe New Mexican reports that New Mexico is considering online sales tax as a result of the Wayfair ruling.

New York

Visit the Department of Taxation and Finance’s page on Sales and Use Tax for more information.

North Carolina

North Carolina Department of Revenue states this for remote sales:

All remote sellers having gross sales in excess of one hundred thousand dollars ($100,000) sourced to North Carolina or two hundred (200) or more separate transactions sourced to North Carolina in the previous or current calendar year (collectively “Threshold”) must register to collect and remit sales and use tax to North Carolina effective November 1, 2018 or 60 days after a remote seller meets the Threshold, whichever is later.

North Dakota

Visit the North Dakota Tax website for more information regarding remote seller sales tax. The start date is October 1, 2018, and the exception is as follows:

  • Taxable sales shipped to North Dakota meet or exceed $100,000 OR
  • Taxable sales shipped to North Dakota meet or exceed 200 separate transactions

Ohio

Check out Ohio Department of Taxation’s Sales and Use Tax FAQ for more information about remote sellers.

Oklahoma

This news release required remote sellers and marketplace providers to collect sales tax on July 1, 2018. Read this news release from the Oklahoma Tax Commission for more information. The threshold for small sellers is:

State law (HB1019xx) requires remote sellers who sold at least $10,000 worth of taxable merchandise in the state of Oklahoma during the previous 12 months to collect and remit the tax or to comply with statutory notice and reporting requirements.

Oregon

Oregon has no state sales tax. Visit the Department of Revenue’s page for more information.

Pennsylvania

Pennsylvania required marketplace facilitators to collect sales tax on March 1, 2018. Visit the Department of Revenue’s page for more information regarding remote sellers. The exception is below.

A remote seller that makes taxable sales totaling $10,000 or more to Pennsylvania customers in the previous calendar year must elect one of two options by March 1, 2018

Rhode Island

Visit the Division of Taxation’s website for more information. View this direct link to the PDF for more information regarding a non-collecting retailer (similar to or same as a remote seller). The threshold is below:

Rhode Island General Laws § 44-18.2-3 requires all non-collecting retailers who in the previous calendar year made $100,000 or more in gross revenues from sales in Rhode Island or 200 or more transactions in Rhode Island to either (1) register for a Rhode Island sales tax permit and collect and remit the sales or use tax in Rhode Island or (2) comply with various notice requirements in the statute.

Marketplace facilitators or retail sale facilitators have certain filing requirements.

South Carolina

Look at the Department of Revenue’s site for more information. The threshold is below with a start date of November 1, 2018.

In South Carolina, a remote seller whose gross revenue from sales of tangible personal property, products transferred electronically, and services delivered into South Carolina exceeds $100,000 in the previous or current calendar year has economic nexus (substantial nexus) with South Carolina and is responsible for obtaining a retail license and remitting South Carolina Sales and Use Tax.

South Dakota

Visit the Department of Revenue’s site for more information. South Dakota’s marketplace facilitator tax law (Senate Bill 2) goes into effect on March 1, 2019.

If you’re a remote seller, then the threshold is below:

  • Your business’s gross revenue from sales into South Dakota exceeded $100,000; or
  • Your business made sales for delivery into South Dakota in 200 or more separate transactions.

Tennessee

Tennessee’s Department of Revenue has this guidance regarding the Wayfair ruling, but note that this may likely change.

If a dealer has no physical presence in Tennessee, the dealer is not required to collect Tennessee sales and use tax until the Department issues public notice stating the specific date and circumstances under which such dealers must begin to collect and remit the tax.

Texas

Visit the Comptroller’s website for FAQs regarding remote sellers.

Utah

Utah’s State Tax Commission has a page devoted to remote sellers and sales tax. The start date is January 1, 2019, and the threshold for small sellers is below.

  1. receives gross revenue of more than $100,000 from the sale of tangible personal property, any product transferred electronically, or services for storage, use, or consumption in Utah; or
  2. sells tangible personal property, products transferred electronically, or services for storage, use, or consumption in Utah in 200 or more separate transactions.

Vermont

Visit the Department of Taxes for more information regarding sales and use tax. Remote sellers were required to collect and remit beginning July 1, 2018, and the threshold is below:

An out-of-state vendor making sales into the State must register and collect sales tax if they made sales of at least $100,000 or 200 individual transactions during any preceding twelve -month period.

Virginia

Visit the Virginia Tax website for more information regarding sales and use tax.

Washington

Visit the Department of Revenue’s site for remote sellers. Both marketplace facilitators and remote sellers were required to start collecting on October 1, 2018. The exception is below.

Beginning October 1, 2018, remote businesses that exceed $100,000 in retail sales to, or have 200 or more annual transactions with, Washington consumers must register their business and collect and submit retail sales/use tax.

West Virginia

Visit the State Tax Department website for more information. The start date is January 1, 2019, and the small seller exception is below.

This collection requirement does not apply to a remote seller that during calendar year 2018 had gross sales of tangible personal property and/or services for delivery in West Virginia of $100,000 or less and had fewer than 200 sales transactions for delivery in West Virginia.

Wisconsin

Visit the Department of Revenue’s site for more information on remote sellers. The start date is October 1, 2018 with the exception below.

The rule is consistent with the Court’s decision in Wayfair, which approved a small seller exception for sellers who do not have annual sales of products and services into the state of (1) more than $100,000, or (2) 200 or more separate transactions.

Wyoming

See this direct link to the PDF for Wyoming’s guide to remote sellers and sales tax. The start date is February 1, 2019 and the threshold is below.

This requirement applies only if in the current calendar year or the immediately preceding calendar year; (1) the gross revenue from sales into Wyoming exceeds $100,000 or (2) the business has made 200 or more separate transactions for delivery into Wyoming.

States That Require Marketplace Facilitators to Collect and Remit

This list is by no means final. Many states are in the process of determining how to deal with the Wayfair decision.

  • Alabama – January 1, 2019
  • Connecticut – December 1, 2018
  • Iowa – January 1, 2019
  • Minnesota – October 1, 2018
  • New Jersey – November 1, 2018
  • Oklahoma – July 1, 2018
  • Pennsylvania – March 1, 2018
  • South Dakota – March 1, 2019
  • Washington – October 1, 2018

Conclusion

Because of the Wayfair ruling in June 2018, most, if not all, of the states will look toward requiring remote sellers to register, collect, and remit sales tax.

Amazon Starts Collecting Connecticut Sales Tax December 1, 2018

Amazon will begin collecting Connecticut sales tax on behalf of FBA sellers starting December 1, 2018.

Since the South Dakota v. Wayfair ruling on June 2018, many states have enacted legislation requiring online marketplaces like Amazon to collect sales tax. These new laws require marketplace facilitators like Amazon and remote sellers to collect and remit sales tax.

Other marketplaces like eBay and Etsy have also started to collect and remit sales tax on behalf of their sellers.

If you’re an FBA seller, then Amazon will start to collect Connecticut sales tax on December 1, 2018. Connecticut will join these other states in requiring marketplaces to collect sales tax:

  • Minnesota
  • New Jersey
  • Oklahoma
  • Pennsylvania
  • Washington

If you’re using SellerZen to automatically sync your Amazon account and import orders into QuickBooks Online, then you’ll have to configure sales tax agencies in QuickBooks Online so that our platform can properly process these orders.

If you’re not automatically tracking these Marketplace Taxes through SellerZen, you may want to track them manually in QuickBooks Online. Whether you track these marketplace taxes automatically or manually, you’ll be able to run a report to see how many transactions and how much in sales you’ve done for each state.

These reports in QuickBooks Online will serve as a record in the event anyone requires the information.

View our guide for setting up sales tax in QuickBooks Online.

Click here for a direct link to the PDF for Connecticut’s sales tax legislation regarding out-of-state sellers on pages 2-3.

For out-of-state, including internet sellers, the PDF states:

The legislation changes the nexus standard, so that out-of-state retailers that regularly or systematically solicit sales of tangible personal property in Connecticut must collect and remit sales tax if:

1. Their Connecticut sales exceed a threshold of 200 transactions during the preceding twelvemonth period (ending September 30) (previously, the threshold was 100 sales);

and

2. Their gross receipts are $250,000 or more during that twelve-month period.

Other states will have different legislation regarding thresholds for remote sellers.

Some states have already enacted similar legislation with effective dates that will begin within the next few months. As their laws go into effect, you’ll need to add those tax agencies in QuickBooks Online if you use SellerZen.

If you sell on any major online marketplace like Amazon and eBay, then you’ll want to consult with your tax advisor sooner rather than later.

See our consolidated list of all the states and their remote seller and marketplace facilitator start dates.

Amazon Begins Collecting Sales Tax on FBA Sales for New Jersey

New Jersey marketplace tax begins on November 1, 2018. As a result, Amazon has begun to collect sales tax for FBA products sold to residents in New Jersey. Read more from New Jersey’s Department of the Treasury.

Since the South Dakota v. Wayfair ruling in June 2018, more and more states have passed or are passing legislation that requires marketplaces to collect sales tax.

If you’re an Amazon seller, you may have seen sales transactions with “MarketplaceFacilitatorTax-Principal” and “MarketplaceFacilitatorTax-Shipping” on sales orders from states that have passed new sales tax legislation.

Since these items show up on the sales orders, you’ll want to record the transactions in your accounting software as well. See the link at the end of the article for how SellerZen handles these taxes.

Visit Amazon’s page on Marketplace Tax. But other online marketplaces such as eBay and Etsy are also required to collect and remit sales tax on behalf of their sellers.

New Jersey joins a growing list of states for which Amazon collects sales tax. Thus far, they are:

  • Oklahoma
  • Minnesota
  • Pennsylvania
  • Washington

The threshold for New Jersey is:

The remote seller’s gross revenue from sales of tangible personal property, specified digital products, or services delivered into New Jersey during the current or prior calendar year, exceeds $100,000or

 

The remote seller sold tangible personal property, specified digital products, or services delivered into New Jersey in 200 or more separate transactions during the current or prior calendar year.

While Amazon collects and remits sales tax for FBA sales, many sellers who do both FBA and FBM are unclear as to what to do. We recommend that you speak with your tax advisor for professional advice for your business.

If you’re using SellerZen to automatically sync and import your Amazon transactions into QuickBooks Online, then you’ll have to add New Jersey as a tax agency. Once configured, SellerZen will map the new tax agency and create the corresponding deposit into the Marketplace Facilitator Tax account used to offset the sales tax liabilities.

Learn how to set up marketplace facilitator sales tax in QuickBooks Online and SellerZen for both the new automated sales tax engine and the old sales tax engine.

Read other articles from SellerZen:

Amazon to QuickBooks Online Accounting: Configuring Sales Tax and Marketplace Facilitator Tax

This step-by-step guide will show you how to set up sales tax in QuickBooks Online from a brand new company.

If you’re not careful, sales tax collected through Amazon may be different from the sales tax calculated in QuickBooks Online. You’ll want to make sure that invoices you create in QuickBooks Online display the correct sales tax collected. Otherwise, your accounts may not reconcile properly.

Setting up Sales Tax in QuickBooks Online with new Automated Sales Tax

QuickBooks Online’s new automated sales tax engine makes configuring sales tax very simple for users. Users no longer need to manually configure districts or city taxes. Instead, just enter the state and filing frequency, and QuickBooks Online will take care of the rest!

Look through this visual guide for setting up QuickBooks Online Sales Tax.

QuickBooks Online Sales Tax Setup

QuickBooks Online Sales Tax Setup 2

QuickBooks Online Sales Tax Setup 3

QuickBooks Online Sales Tax Setup 4

If you’re collecting and remitting sales tax for your state, select the filing frequency and start date. When you pay, you’ll select your Bank account that you used to pay your sales tax liability.

We’ll add an additional sales tax agency as an example. The process is the same for any other sales tax agency. Select the filing frequency and start date.

Amazon to QuickBooks Online Accounting: Configuring Sales Tax and Marketplace Facilitator Tax

When you have an invoice with sales tax to any state, overwrite what QuickBooks automatically enters with the amount that Amazon collects if the two amounts are different. We’ll go over how to do this below.

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Setting up Sales Tax in QuickBooks Online with Standard Sales Tax

QBO Old Sales Tax Switch to New

Some users will be presented with this screen to switch to the new automated sales tax engine used earlier in this article. We’ll continue with the old tax center.

QuickBooks Online old Sales Tax Setup 1

QuickBooks Online old Sales Tax Setup 2

QuickBooks Online old Sales Tax Setup 3

Add any additional states you need. Use the general state sales tax rate for each state you set up unless you want to manually set up the combined tax rate.

When you have an invoice with sales tax to any state, overwrite what QuickBooks automatically enters with the amount that Amazon collects if the amounts are different. We’ll go over how to do this below.

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Setting up QuickBooks Online Service Item and Bank Account for Marketplace Facilitator Sales Tax

Once you’ve configured sales tax agencies for your QuickBooks Online company, you’ll need to set up a Bank account (Detail type: Cash) for the Marketplace Facilitator Tax.

To do this properly, you’ll have to create a Marketplace Facilitator Tax service item linked to the Marketplace Facilitator Tax bank account.

Once you’ve created the service item linked to the bank account, you’ll select this Marketplace Facilitator Tax service item as the line item on your affected invoices.

QuickBooks Online Accounts

Amazon to QuickBooks Online Accounting: Configuring Sales Tax and Marketplace Facilitator Tax

Once you’ve created the bank account, you’ll need to create the service account that links to this account you’ve just created.

QuickBooks Online Add Service Item

QuickBooks Online Product and Services Add

Make sure the “Is taxable” box is not checked.

Once you’ve saved the service item, you can now select this item for both your Marketplace Facilitator Tax Shipping and Marketplace Facilitator Tax Shipping. For invoices that have taxes on sales and shipping, sellers can choose to sum up those taxes into one line item. Or sellers can use the same service item twice with the different amounts.

Another option is to create separate service items for Marketplace Facilitator Tax Principal and Marketplace Facilitator Tax Shipping. If you choose to do this, then link them both to the same Marketplace Facilitator Tax bank account.

Some sellers will want this level of separation, but it’s not really necessary since taxes are deposited to and paid from the same offset bank account.

What’s important is that the amounts are correct whatever option you choose. When you create the invoice, the amounts will be properly deposited into the right accounts.

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Example of QuickBooks Online Invoice with Marketplace Facilitator Tax

Here’s how all of this works in QuickBooks Online with an Amazon invoice. We’ll create a QuickBooks Online invoice with Marketplace Facilitator Sales Tax collected.

Sample Amazon Invoice

Once you’ve entered the amounts in the invoice, double check that the sales tax that QuickBooks Online automatically calculates is correct. If it’s correct and all the numbers are correctly entered, save the invoice.

QBO Invoice with Marketplace Tax

Marketplace Taxes won’t affect any of your accounts since any amount deposited is also withdrawn to reflect what Amazon does.

You can always run a report on the Marketplace Facilitator bank account.

Save the invoice and make sure to receive payment if you’ve already shipped the item or if it’s an FBA order.

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Congratulations! You’ve successfully configured sales tax in QuickBooks Online. You’ve also accurately recorded the sales tax that Amazon collects for its Marketplace Tax!

It’s important that you track sales tax even when you’re not the one collecting and remitting it. Using an accounting software like QuickBooks Online track sales tax means that you’ll always have a record in the event you need it.

You can automate all of the document creation for your Amazon seller account. SellerZen automatically imports all transactions in real-time so that your QuickBooks Online company is always up-to-date. Give us a try for free now!

Learn more about other bookkeeping topics through our articles on accounting for Amazon businesses:

How SellerZen handles Amazon Marketplace Facilitator Tax in QuickBooks Online

Updated April 27, 2019

Several states passed Marketplace Facilitator Tax laws in 2017. These set of laws shifted the burden of sales tax collection from individual sellers to marketplace facilitators. What is a marketplace facilitator? Amazon states:

A Marketplace Facilitator is defined as a marketplace that contracts with third party sellers to promote their sale of physical property, digital goods, and services through the marketplace.

Learn more about the states that have passed similar legislation from Amazon’s Marketplace Tax page.

Even though 3rd party sellers won’t have to collect and remit sales tax to the states that have passed similar legislation, they still have to account for what Amazon collects and remits.

This accounting will serve as evidence that sales tax has been received and paid for Amazon sales in those states. You should still consult with your accountant regarding your tax situation even though Amazon collects and remits on your behalf. If you want to see available sales tax services, visit our list of Amazon tools and services.

Here’s how SellerZen handles the Marketplace Facilitator Tax

Even though sellers never receive sales tax collected by Amazon for marketplace taxes, SellerZen still records these transactions to an account.

Since Amazon credits and debits the tax amount on the invoice, SellerZen will do the same thing for documents imported to QuickBooks Online. As a result, the Marketplace Facilitator bank account will always have a balance of $0.00.

Sellers will need to create a Marketplace Facilitator Tax bank account (Type: Bank and Detail Type: Cash on hand) and a service item called Marketplace Facilitator Tax that is linked to the Marketplace Facilitator Bank account.

Sellers can run a report on this bank account to see all transactions with marketplace taxes, or they can export the report and sort to see the amounts for each state.

Why is this important?

Having a record of the marketplace tax transactions is important. With the service item and bank account, QuickBooks Online sales transactions will accurately reflect sales documents on Amazon.

The Wayfair ruling means that more and more states will eventually require marketplaces like Amazon to collect and remit sales tax.

While that’s an additional source of revenue for the states, it means increased costs for marketplace sellers to comply with the new laws. It’s uncertain now whether Amazon will collect and remit for all states for a fee or if sellers will have to seek out services and solutions. The only certainty is that consumers will have to pay more not just because of sales tax, but also because of increased costs born by merchants for compliance.

Need a step-by-step guide to QuickBooks Online accounting for your Amazon orders? Check out our Amazon to QuickBooks Online accounting series: