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Bonanza to Collect Sales Tax in Four States, Sellers Take Note

Bonanza marketplace
Bonanza to Collect Sales Tax in Four States

Due to a change online marketplace Bonanza is making dealing with sales tax, sellers must take action this month or face suspension or additional fees.

Bonanza will begin collecting and remitting sales tax when transactions involve buyers residing in four states thanks to Marketplace Facilitator Laws. Sellers who accept payments through PayPal and/or Amazon Pay must authorize Bonanza to collect taxes by June 17th.

Those who accept payments through Stripe do not need to take action, but Bonanza will be collecting the tax amount when applicable.

As of June 17, 2019, Bonanza will collect and remit sales tax on seller’s behalf for all transactions where the buyer is located in Alabama, Iowa, New Jersey, and Washington State.

Sellers will continue to be responsible for collecting sales tax for other states when applicable and can adjust sales tax rules settings in the Payments & Purchases tab of their booth. Any tax rules created for Alabama, Iowa, New Jersey, or Washington State will be overridden at checkout since Bonanza will be collecting for those states.

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Bonanza has partnered with TaxCloud in order to be in compliance with the new laws. Be sure to read the full announcement on the Bonanza website carefully and consult with experts if you have questions.

Ina Steiner on EmailIna Steiner on LinkedinIna Steiner on Twitter
Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

One thought on “Bonanza to Collect Sales Tax in Four States, Sellers Take Note”

  1. So, how is it that these marketplaces are collecting sales tax on another business’s transactions when that business isn’t legally required to collect it based on each state’s threshold? This is what I don’t understand. Just because I sell on a marketplace doesn’t mean that I personally sold all of that product.

    I don’t think these states should be legally allowed to collect on transactions for individual businesses that do not meet their threshold, no matter where they sell. They certainly aren’t allowed to do that with a business located within a mall. That’s all a marketplace is — an online mall.

    And, no, having the marketplaces be responsible for collecting and remitting it doesn’t make it anymore legal. The marketplace is merely selling a piece of their virtual real estate and maybe charging for marketing tools and other services.

    So, if the states want to legally collect sales tax from marketplaces, then they should be requiring the marketplace to charge sales tax for its services. I know if I were selling the same services to anyone in my state, my state would require me to collect sales tax on it.

    That is all the marketplace should be responsible for. My products are not their products and their products and services are not mine. My business is not their business, nor is their business mine. So, where is the legality in all of this?

    I’ve said it before and will keep saying it, if these states want revenue from an internet sales tax, they need to either require their own sellers to collect it from all of their customers or give up the reigns to a single agency to regulate, collect and distribute sales tax nationwide. The way they’re going about things thus far, it brings up questions of legality and they’re placing an unnecessary burden on small business owners.

    Anyone else find it funny how quickly the states moved to get some kind of sales tax law enacted so they could start collecting? I sure wish they would move that fast on other far more important issues. Yes, the states need revenue, but some are already finding it to be a lot more revenue than they expected and are looking to adjust that (ie, California).

    It just goes to show how poorly thought out all of their current laws are.

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