Sales Tax for Marketplace Providers
In 2018, the U.S. Supreme Court’s decision in South Dakota v. Wayfair caused out-of-state marketplace providers to collect and remit Minnesota Sales Tax if they meet specific thresholds. This also applies to foreign marketplace providers.
A marketplace provider is any person, other than the seller, who facilitates a retail sale by both:
- Listing or advertising the seller’s products
- Processing the payments from the customer, either directly or indirectly through a third party, regardless of whether the marketplace provider receives compensation or other consideration in exchange for its services
Note: Some states refer to marketplace providers as marketplace facilitators.
Requirements to Collect Sales Tax
You may be required to collect sales tax on behalf of sellers using your marketplace. This includes foreign sellers. Requirements vary on whether you have a taxable presence in Minnesota.
Register to Collect Sales Tax
You have a couple options to register depending on where you facilitate sales.
Collect and File
It is important to keep good records as you collect and file your state and local sales taxes. You are relieved of not collecting the correct amount of tax if you meet specific requirements.