Multistate: More State Responses to Wayfair

State lawmakers continue to enact economic nexus legislation to take advantage of the authorization contained in the U.S. Supreme Court’s decision in South Dakota v. Wayfair. In addition, a rapidly increasing number are imposing the tax collection obligation on what they are terming “marketplace facilitators” or “marketplace providers.” Below is a summary of the remote seller and marketplace collection legislation enacted last week.

In Idaho, House Bill 259, which requires remote sellers and marketplace facilitators to collect and remit sales tax effective June 1, 2019, was recently signed into law. Specifically, the bill amends the definition of a “retailer engaged in business” in Idaho to include any retailer lacking a physical presence in Idaho that, in the previous or current calendar year, has in excess of $100,000 in cumulative gross receipts from sales delivered into the state. The economic nexus standard for marketplace facilitators lacking a physical presence in Idaho is likewise sales exceeding $100,000. House Bill 259 specifically states that retailers and marketplace facilitators do not need to collect any local sales tax or any other tax or assessment that is not imposed under the sales tax chapter of the state’s law. The law also requires marketplace facilitators to obtain a separate seller’s permit to be used to collect and remit tax on transactions facilitated for third-party sellers.

In Arkansas, Senate Bill 576 requires remote sellers and marketplace facilitators to collect and remit sales tax if, in the previous or current calendar year, they had sales exceeding $100,000 or 200 transactions of tangible personal property, taxable services, a digital code, or specified digital products delivered into Arkansas.  A sale made through a marketplace facilitator is considered the sale of the marketplace facilitator for purposes of determining whether the marketplace meets the economic nexus thresholds. In addition, the marketplace facilitator will be audited for all sales it facilitates. A marketplace facilitator may not be liable for failing to collect and remit the correct amount of sales tax if any error in collecting and remitting the tax was due to the seller providing insufficient or incorrect information to the marketplace facilitator. This protection does not apply if the seller and the marketplace are related. The remote seller and marketplace provisions are effective July 1, 2019. Please stay tuned to twist for future Wayfair-related developments.