Detailed Multistate Development
Recently, Georgia Governor Brian Kemp signed House Bill 276, which effective April 1, 2020, requires a marketplace facilitator to collect and remit sales and use tax, if in the previous or current calendar year it has retail sales (including facilitated sales) of at least $100,000.
In West Virginia, the Department of Revenue has issued guidance addressing the sales tax obligations of marketplace facilitators. The guidance makes clear that a marketplace facilitator, referrer, and remote seller must collect the state sales and service tax, state use tax, and the municipal sales and use tax. The guidance further provides that a marketplace facilitator or referrer is deemed an agent of a marketplace seller. Likewise, the North Carolina Department of Revenue issued a directive addressing the obligations of marketplace facilitators. The directive clarifies that a marketplace facilitator is required to collect and remit motor vehicle lease and subscription tax, scrap tire disposal tax, white goods disposal tax, dry-cleaning solvent tax, and the 911 service charge for prepaid wireless telecommunications service, as applicable. The directive further provides that a marketplace facilitator must collect and remit local sales and use tax. Finally, the directive includes FAQs which address a number of issues including, but not limited to, the economic nexus threshold computation, filing frequency, and reporting procedures.
The Nebraska Department of Revenue issued an information guide addressing the taxation of prepared food and beverage delivery services. It contains information of particular importance to food and food delivery app and platform providers that are considered Multi-vendor Marketplace Platforms (MMPs) (essentially involved in facilitating sales and facilitating collection from the customer). If a customer orders and pays for food, beverages and delivery through a MMP, the MMP is considered the retailer of the products and is responsible for collecting and remitting sales tax on the entire cost of the transaction including the food and beverage as well as any delivery charge and service charge. In addition, if the locality in which the restaurant is located levies a city occupation tax and the restaurant separately charges the customer for that tax, the occupation tax is included in the sales tax base, and MMP is responsible for collecting and remitting that occupation tax to the local jurisdiction.
In other state-Wayfair related news, multiple bills have been introduced in Missouri, Florida, Mississippi, Kansas, and Tennessee that would adopt sales and use tax economic nexus and/or marketplace facilitator provisions. In Arizona, a bill was introduced that would establish an e-commerce compliance office to assist Arizona taxpayers in complying with taxes levied by other jurisdictions. Please stay tuned to TWIST for future economic nexus and marketplace developments.
This Week's Developments