Nine more states enacted “marketplace facilitator” laws in the first 6 months of 2020 that require online marketplaces like eBay and Etsy to collect and remit sales tax on behalf of third-party sellers.
That’s according to Vertex, which tracks sales tax changes.
The company said several states also updated previously set economic nexus thresholds – that impacts sellers who sell on their own websites where they are responsible for collecting sales tax.
Vertex’s Bernadette Pinamont said, “It is clear that companies selling across state lines need to carefully keep track of where they do business and each state’s economic threshold. Before they cross any threshold, they need to be prepared to register, collect, and remit the appropriate amount of sales tax.”
“Even though online sales have increased during the pandemic, revenue from those sales is not enough to cover the lost sales tax revenue from brick and mortar stores,” she said.
“This coupled with the fact that sales tax is the second largest source of revenue for almost all states means that companies must keep their eye on compliance and Wayfair rules for remote sellers and marketplace facilitators, as well as the potential for increased audit activity.”
Vertex expects significant changes to state, county, city and district sales tax rates and rules in the second half of 2020, as all types of taxes will play a major role in the post-COVID-19 economy.
See more information and a link to the report on the Vertex website.