Marketplace Facilitator
A marketplace facilitator is a platform, like Amazon, Walmart, Etsy or eBay, that the law requires to collect and remit sales tax on behalf of its third-party sellers. Every US state with a sales tax now has a facilitator law, so the marketplace handles tax on those orders. The catch: facilitator laws only cover marketplace sales. Your Shopify or WooCommerce orders are still your responsibility wherever you have nexus.
Facilitator laws killed most of the sales tax panic for pure marketplace sellers, but they created a new trap for multi-channel brands. Say you do $60,000 a month on Amazon and $25,000 a month on Shopify. Amazon collects and remits tax on its share automatically. The Shopify share is on you in every state where you've crossed a nexus threshold, and states don't send reminders. They send assessments, with penalties and interest attached.
There's a second wrinkle: in some states, marketplace sales still count toward your economic nexus threshold even though the marketplace remits the tax, which can force a registration for your direct channel sooner than you'd expect. And a few states, Washington's B&O tax being the classic example, tax gross receipts separately from sales tax, and the facilitator doesn't pay that for you. Our ecommerce tax services sort out which states actually need a registration and which don't, so you're not over-filing either.
Where this shows up in our work
This isn’t textbook material for us; it’s the day-to-day of keeping seller books right. See how we handle it in practice:
Ecommerce Tax Services→Related terms