Understanding Tax Exemptions and Taxables
Who is required to register and collect tax as a seller?
Sellers that have a physical presence in a jurisdiction, either through employees, independent contractors, or property have
always had an obligation to register for sales and use tax in that jurisdiction unless some specific exclusion applies.
- Since the South Dakota v. Wayfair decision by the US Supreme Court in June 2018, all but two states (Florida and Missouri)
have passed legislation, rules or issued guidance that sellers who make a certain volume of sales (between US$100,000 and
US$500,000 annually) in a state are required to register and collect tax in a state even though the seller may have no physical
presence in the state.
These rules may also apply in jurisdictions where local governments administer taxes as well (e.g. Louisiana, Alabama).
Sellers that do not have a physical presence in the US are also subject to these laws if they meet the sales volume thresholds-
there is no treaty or other protection.
States have also passed "marketplace facilitator" legislation that requires a marketplace facilitator to collect, report and remit
taxes for sales through a marketplace.
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Generally a marketplace facilitator is a person that operates or owns a marketplace who contracts with marketplace sellers to
facilitate sales of their products.
"Marketplace" often defined to include a physical or electronic place, including an internet website.
Consideration for the service of facilitation may or may not be required.
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KPMG
What it means to "facilitate sales" can vary widely.
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