Obligations of Marketplace Facilitators
Starting June 1, 2019, a marketplace facilitator is required to collect and remit sales tax when a seller uses its marketplace to conduct a retail sale. A marketplace facilitator must inform the seller on its marketplace that it will collect and remit tax on taxable items sold on its marketplace that are sourced to Vermont. Once notified, a marketplace seller will not need to collect and remit sales tax as the marketplace facilitator will fulfill that requirement for the seller making sales in Vermont.
Definition of “Marketplace Facilitator”
A “marketplace facilitator” is a person who (1) contracts with a marketplace seller to facilitate the sale of products (2) through a physical or electronic marketplace (3) that it operates and (4) receives consideration.
Additionally, to qualify, a person must engage in one or more of the activities from each of the lists below.
- Directly or indirectly through one or more affiliated persons communicate offer and acceptance between buyer and seller.
- Directly or indirectly through one or more affiliated persons own or operate the infrastructure or technology that brings purchasers and marketplace sellers together.
- Directly or indirectly through one or more affiliated persons provide a virtual currency to purchase items from marketplace sellers.
- Directly or indirectly through one or more affiliated persons develop software or research related to activities taking place on a marketplace that it or an affiliate operates.
Services Provided to Sellers
- Provide payment processing services.
- Provide fulfillment or storage services.
- List products for sale.
- Set prices.
- Brand sales as those of the marketplace facilitator.
- Take orders.
- Advertise or promote.
- Provide customer service or return and exchange service.
This is only a summary of the requirements. Please contact the Department if you need assistance or have further questions.