New legislation in Act 46 of the 2019 legislative session expands the definition of a “vendor” required to charge, collect, and remit Vermont Sales Tax. Under the new law, the definition includes “marketplace facilitators.” Act 46 was signed into law by Gov. Phil Scott on June 4th, Sec. 3, relating to marketplace facilitators and sellers. The new law became effective on signing.
What is a Marketplace Facilitator or Seller?
A “marketplace facilitator” is as an entity that contracts with a person or entity, referred to as a “marketplace seller,” to help the seller make sales in the retail marketplace. When sales of taxable tangible and intangible property or services are made in Vermont through physical or electronic means, such as the internet, the marketplace facilitator must collect sales tax on behalf of the marketplace seller and remit the tax to the Vermont Department of Taxes.
In the interest of clarity and equity among vendors of goods and services, this modernization of the tax code was proposed during the 2019 legislative session. Vermont law currently requires out-of-state vendors to collect and remit sales tax if they had sales of at least $100,000 or 200 sales transactions of taxable tangible property during any prior 12-month period to destinations within the State.
The new legislation applies the same thresholds and expands the requirements to marketplace facilitators who help marketplace sellers make sales to destinations within Vermont and marketplace sellers who have combined sales through more than one marketplace facilitator to destinations within the state.
Read specific and detailed language regarding the definitions, responsibilities and relationships associated with marketplace facilitators and marketplace sellers in Sec. 3 of Act 46. The Department intends to publish additional guidance over the next year to help businesses navigate these new requirements.