Marketplace facilitator laws shifted the job of collecting sales tax from individual sellers to the platforms they sell on. Every state with a general sales tax now has one. What they did not do — and this is the part that costs sellers money — is remove the seller’s own registration obligation.
What a Marketplace Facilitator Is
A marketplace facilitator is a business that provides a forum where third parties sell, and that also handles the money — processing payment, or collecting it and passing it on. Both halves usually matter. A site that lists products but sends buyers elsewhere to pay is generally not a facilitator.
Definitions differ by state, and some reach further than online retail — ride-hailing apps, delivery services, ticketing platforms and short-term rental sites are treated as facilitators in various states.
Facilitator or Seller: Which Are You?
A marketplace seller lists goods on someone else’s platform. A marketplace facilitator operates the platform. A business can be both — selling on Amazon while also running a site where other vendors sell — and each role carries different obligations.
Running your own online store does not make you a facilitator. Selling your own goods through your own checkout makes you an ordinary remote seller, fully responsible for your own collection.
Who Collects the Tax
On marketplace orders, the platform calculates, collects and remits. You should not also collect on those transactions — doing so charges the customer twice.
On direct sales through your own site, you collect. On wholesale, you handle exemption documentation. The split is by channel, not by business, which is why multi-channel sellers need to keep the streams separate in their records.
Marketplace Sales and Your Own Threshold
This is the trap. In roughly half the states, marketplace sales still count toward your economic nexus threshold even though the platform paid the tax. Cross the threshold on marketplace volume alone and you may be required to register — then file returns reporting little or no tax due, because the platform already handled it.
The other states exclude facilitated sales from the seller’s count, which can mean no registration is required at all. The Marketplace Sales column on economic nexus thresholds by state shows which way each state treats them.
Amazon, Etsy, eBay and Walmart
All four collect and remit sales tax on orders placed through their platforms in states with facilitator laws. Two seller-side issues survive that.
First, registration. Depending on the state, your marketplace volume may still oblige you to hold an account. Second, and specific to fulfilment programmes: inventory stored in a state creates physical nexus for you regardless of who collected the tax. An FBA seller can owe registration in a state purely because stock passed through a warehouse there.
Shopify and Direct Website Sales
Shopify, WooCommerce, BigCommerce and similar tools are not marketplace facilitators. They give you a store; they do not sell your goods. Their tax features may calculate what to charge, but the legal responsibility to register, collect, file and remit stays with you.
Sellers regularly misread this because the software behaves similarly to a marketplace. The difference is who is legally making the sale — and on your own site, that is you.
Selling Across Several Channels
Consider a business with $80,000 through Amazon, $45,000 through its own website and $20,000 wholesale into a single state.
- In a state counting all sales toward the threshold, the total is $145,000 — over $100,000, so registration is likely required.
- In a state excluding facilitated sales, the count is $65,000 — under the threshold, and registration may not be required at all.
- In a state counting only retail sales, the wholesale $20,000 may drop out as well.
Same business, same revenue, three different answers. Track marketplace, direct and wholesale separately from the start — reconstructing the split later from mixed records is far harder than recording it as you go.
Zero-Dollar and Marketplace-Only Returns
Sellers registered on marketplace volume alone still have to file. The return often reports gross sales with a corresponding deduction for facilitated transactions, leaving nothing owed — but the filing itself is mandatory, and missing it draws the same late penalties as missing a return with tax due.
Some states offer a reduced or exempt status for marketplace-only sellers instead of a full account. Where it exists, it is usually worth having, because it removes the recurring filing obligation.
If You Operate the Platform
Running a forum where third parties sell may make you the facilitator — responsible for collecting on their sales, not just your own. Obligations typically include registering where the platform’s combined activity meets a state’s threshold, collecting on facilitated sales, filing, and providing sellers with the reporting they need. Facilitator thresholds are sometimes set differently from ordinary seller thresholds, so check the platform figure specifically.
If you need to register in one or more states, start a sales tax registration. If you are already registered and want threshold activity, filing deadlines and state notices tracked, see sales tax compliance monitoring.
Frequently Asked Questions
If a marketplace collects tax, do I still need a permit?
Often yes. Facilitator laws move the collection duty for those orders, but many states still require the seller to register, particularly where marketplace sales count toward the threshold.
Is every ecommerce site a marketplace facilitator?
No. Selling your own goods through your own store makes you a remote seller. Facilitator status generally requires hosting third-party sellers and handling the payment.
Are these laws limited to online marketplaces?
No. Several states apply them to ride-hailing, delivery, ticketing and short-term rental platforms.
Do I file if the marketplace already paid the tax?
If you hold a registration in that state, yes. The return typically shows the sales and deducts the facilitated portion, leaving nothing due — but the filing is still required.
SalesTaxApplication.net is a private filing service and is not a government agency. State agencies may allow businesses to handle these registrations directly. Rules vary and change — confirm your obligations with the state or a qualified professional. See also the sales tax nexus guide.