Multistate: More state responses to Wayfair

More states continue to respond to the Wayfair decision, including Oklahoma, North Dakota, Hawaii, Rhode Island, Massachusetts, and Wisconsin.

Podcast Transcript

The beginning of the state legislative sessions has brought the introduction of Wayfair-related legislation in several states.

In Oklahoma, the legislature has pre-filed House Bill 2352 addressing the sales tax obligations of remote sellers and marketplace facilitators. The bill provides that remote sellers that have aggregate sales of tangible personal property in excess of $100,000  delivered in the state in the preceding calendar year will be required to register, collect and remit sales tax in the succeeding fiscal year. Sales made through a marketplace forum or referrer’s platform will not be included in the determination of the threshold if tax is being collected on the seller’s behalf. 

Oklahoma currently requires remote sellers, marketplace facilitators, and referrers with over $10,000 of Oklahoma sales to elect between collecting and remitting sales tax or complying with the state’s notice and reporting requirements. House Bill 2352 would eliminate the election requirement for remote sellers, but would maintain the election for marketplace facilitators and referrers meeting the $10,000 threshold.

On January 21, the North Dakota legislature introduced Senate Bill 2338, which would impose collection obligations on marketplace facilitators effective October 1, 2019. Under the bill, a marketplace facilitator with no physical presence in North Dakota would be considered a retailer required to register and collect and remit sales tax if, in the prior or current calendar year, its sales exceed $100,000 or it has made 200 or more separate transactions in North Dakota. Collection would begin during the following calendar year or 60 days after the threshold is met, whichever is earlier.

Legislation has been introduced in Hawaii ( House Bill 113) addressing the general excise tax obligations of marketplace facilitators. Under the bill, a marketplace facilitator would be considered a seller of tangible personal property and subject to the general excise tax rate, while the marketplace seller would be considered a wholesaler subject to a lower excise tax rate. The bill defines a marketplace facilitator as “any person who sells or assists in the sale of tangible personal property … by (1) providing a forum…in which sellers list or advertise tangible personal property for sales; and (2) collecting payment from the purchaser ….” However, if a “person other than a marketplace facilitator…provides a forum…in which sellers list or advertise tangible personal property for sale and takes or processes sales orders,” the person must elect to collect tax or comply with various reporting requirements.

Rhode Island House Bill 5151 would eliminate the current collect or report regime for non-collecting retailers, referrers and retail sale facilitators effective July 1, 2019. Under the bill, remote sellers, referrers and marketplace facilitators, as  defined, would be required to collect and remit tax if, in the immediately preceding calendar year, the entity has gross revenue exceeding $100,000 or 200 or more separate transactions, “from the sale of tangible personal property, prewritten computer software delivered electronically or by load and leave, vendor-hosted prewritten computer software, specified digital products, and/or has taxable services into Rhode Island.” A marketplace facilitator would be required to collect sales tax on all sales made on the marketplace. These provisions are incorporated in the state’s FY 2020 Budget Bill which would also expand the sales tax base to include specified digital products.

In Massachusetts, House Bill 1 would impose a sales tax collection obligation on remote sellers and marketplace facilitators. Per the bill, a “remote retailer” would be subject to registration, collection, and remittance requirements if, in the prior or current taxable year, its sales exceeded a threshold set by the Commissioner of Revenue of no less than $100,000. A “remote retailer” would be defined as a retailer, including a marketplace seller or marketplace facilitator engaged in business in the Commonwealth. Currently, Massachusetts requires certain retailers to collect and remit if they have 100 or more sales transactions generating over $500,000 and have in-state software (apps, cookies, etc.) or relationships with in-state content distribution networks

The Wisconsin Department of Revenue recently issued Form P-627, Wisconsin Remote Seller Referral Form, which would allow a person to refer to the Department any business not collecting Wisconsin sales and use tax for sales made in the state. The form allows the referrer to remain anonymous. The form also provides that rewards will not be offered for reporting businesses to the Department.  Please stay tuned to TWIST for more Wayfair-related developments. 

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