Tag Archives: Marketplace Fairness

12 Important Details: Sales Tax & WA’s New Marketplace Facilitators

Don’t miss these details about Washington’s new Marketplace Fairness solution.

We recently shared an overview of Washington’s New Marketplace Fairness solution. While we’re skeptical it will help rather than hinder, it’s important you know additional details about marketplace facilitators and sellers.

Marketplace Facilitator Overview

  1. Starting in January 2018, marketplace facilitators will need to collect sales tax on behalf of marketplace sellers that have not established a physical presence, or nexus, within the state.
  2. Facilitators are responsible for collection of sales tax if they themselves have nexus in Washington State or $10,000 or more in retail sales within the state. This can include their own products as well as sales they make on behalf of a remote seller.
  3. What exactly do these facilitators need to do? As the Department of Revenue explains:
    • Collect and pay sales tax on sales to Washington consumers
    • Follow the use tax notice and reporting requirements [as explained].

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What is WA’s Marketplace Fairness? New Online Sales Tax Solution

Piggy bank with flag coating over it isolated on white - state of Washington

Did you hear about WA’s Marketplace Fairness?

For years, Washington State has been one of the states passing online sales tax legislation. From statutes expanding nexus (making more businesses responsible for the state’s taxes and fees) to its five-point internet sales tax solution, the Evergreen State is quick to come up with more solutions to make the marketplace “fair.”

The latest attempt to level the playing field makes some fairly aggressive changes in the state’s sales tax collection policy for marketplace facilitators.

While the state says it will make the marketplace more fair to brick and mortar retailers, we’d actually argue it’s a compliance burden and onerous on the seller. Why? The “solution” designates three additional definitions businesses will need to examine in order to determine how they apply if the definitions do apply, the business needs to pay close attention to another piece of legislation that may change again in the future.

An Overview: Marketplace Fairness

Here’s an overview of the new marketplace fairness solution.

Beginning in the New Year, “Certain marketplace facilitators, remote sellers, and referrers have new obligations related to the collection of sales or use taxes or the providing of notifications.” Continue reading