Introduction to Marketplace Facilitator
A marketplace facilitator is an online platform that provides a marketplace to third-party sellers to allow them to sell goods, digital products, and services. Well-known marketplace facilitators include Amazon, eBay, Walmart online, Shopify, and Etsy. Marketplace facilitator rules identify the party responsible for collecting and remitting sales and use tax in jurisdictions with relevant laws. Facilitators often handle payment transfers and delivery.
Role of a Marketplace Facilitator
In jurisdictions with marketplace facilitator laws, the facilitator calculates, collects, remits, and refunds sales and use taxes. States and small businesses benefit from marketplace facilitator legislation. Understanding obligations as a facilitator is important, as laws vary between states and may shift sales tax collection from sellers to the facilitator. Marketplace facilitators act as intermediaries between buyers and sellers in online transactions.
Example of a Marketplace Facilitator
An example of a marketplace facilitator is an online platform that allows third-party sellers to sell goods and services. Some well-known examples of marketplace facilitators are Amazon, eBay, Etsy, and Shopify. In states with marketplace facilitator laws, the facilitator is responsible for sales tax-related activities, including calculating, collecting, and remitting taxes. Facilitators may also handle payment transfers and delivery services.