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Marketplace Facilitator Sales Tax Collection, Reporting, and Liability Risks

Key Tax Rules Impacting Facilitators of the Sale of Third-Party Goods and Services

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Thursday, August 25, 2022

Recorded event now available

or call 1-800-926-7926

This course will provide tax professionals and advisers guidance on the key sales tax issues facing marketplace facilitators stemming from the sale of goods and services of third parties. The panel will discuss recent developments in state sales tax laws, the varying state definitions of a marketplace facilitator, key nexus considerations, collection and reporting requirements, and methods to ensure compliance and minimize liability risks in contracting with third parties to sell their goods and services.


In recent years, virtually every state that imposes a sales tax has adopted legislation that requires marketplace facilitators to collect and remit sales tax on behalf of third-party sellers. With various conflicting state tax laws, maintaining compliance is difficult for marketplace facilitators. Third-party sellers are equally concerned with understanding the impact of shifting the collection and remittance duties to the marketplace facilitator.

Tax advisers, and their client companies that operate marketplaces, must grasp an understanding of recent state tax rules, nexus considerations, and reporting obligations for facilitators of sellers of third-party products and services.

Marketplace facilitators contract with third parties to sell goods and services often throughout the U.S. These facilitators enable the sales of third party sellers by listing and offering the products or services of the seller, taking payments, collecting receipts, and managing the fulfillment of orders. This engagement with third parties may subject the marketplace facilitator to state sales tax laws requiring them to collect and report these transactions. Failure to do so can result in hefty penalties and tax liability.

An entity falling into the category of "marketplace facilitator" is not automatically subject to a state's tax collection requirements. In some states, there must be sufficient nexus with a state before it may be obligated to collect the state's sales and use tax on marketplace sales. Although there are adequate bases for economic nexus for retailers after the Wayfair decision, the same cannot be said for marketplaces due to variations of state tax rules on the economic nexus threshold.

Listen as our panel discusses key sales tax issues impacting marketplace facilitators, recent state tax legislation, nexus considerations, collection and reporting requirements, and methods to avoid penalties and ensure compliance.



  1. Determining who are marketplace facilitators
  2. Marketplace vs. retailer nexus standards
  3. Recent state tax law developments
  4. Marketplace facilitator registration, collection, and reporting
  5. Impact on third-party marketplace sellers
  6. Best practices for marketplace facilitators in contracting with third-party goods and service providers


The panel will discuss these and other key issues:

  • What entities are considered to be "marketplace facilitators"? Narrow versus broad definitions.
  • Key differences between the economic nexus standards for marketplace facilitators vs. retailers.
  • How marketplace facilitators can maintain compliance with various state tax collection and reporting obligations.
  • Whether marketplace sellers are permitted to opt-out of marketplace collection and the impact on the marketplace.
  • What documentation requirements are imposed on marketplace facilitators.
  • Additional issues that marketplace facilitators should consider in contracting with third-party goods and service providers.


Dillon, Michael
Michael T. (Mike) Dillon

Dillon Tax Consulting

Mr. Dillon is an attorney and founder specializing in multistate sales and use tax matters for multistate and...  |  Read More

Dion, Sylvia
Sylvia F. Dion, CPA

Founder & Managing Partner
PrietoDion Consulting Partners

Ms. Dion's firm specializes in providing SALT consulting and compliance Services to companies throughout the U.S....  |  Read More

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