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Resources Sales Tax Fundamentals
by TaxJar March 1, 2026
Ditch the sales tax complexity.
A marketplace facilitator is a business or organization that contracts with third parties to sell goods and services on its platform and facilitates retail sales. Marketplace facilitators enable these sales by listing the products, taking the payments, collecting receipts, and in some cases, assisting in shipment. When we refer to marketplace facilitator laws, we’re talking about legislation surrounding the sales tax responsibilities of these facilitators.
All states with a state sales tax have created legislation that requires marketplace facilitators to collect and remit sales tax on behalf of their third-party sellers’ transactions. These laws benefit the states because they can collect more sales tax from fewer entities, which results in simpler compliance for the states. For sellers, the benefit lies in having sales tax for certain transactions handled by the facilitator. But in many cases, it’s not as simple as it may seem.
Marketplace facilitator laws grew from the idea that a state could collect all of the required sales tax from one entity rather than from hundreds of thousands of smaller companies.
Let’s use Amazon as an example. Before these types of tax laws came into effect, each of the third-party sellers was responsible for collecting and remitting their own sales tax. So if a third-party seller on Amazon didn’t have nexus (triggered by a physical location, employee staff, store inventory, or reach a certain amount or number of transactions), then it didn’t have to collect sales tax for sales in that state. And the state would miss that portion of revenue.
Even if a seller did have nexus in a state, if the seller chose not to follow the law, the state then spent significant time and resources to go after that seller and any other noncompliant businesses.
By placing the onus of sales tax on the facilitator (rather than the seller), these laws enable the states to force compliance, reducing the cost of compliance for the states to claim their revenue.
For sellers, marketplace facilitator laws mean that your facilitator will handle collecting and remitting sales taxes on behalf of your sales in states where your marketplace is compliant.
Another concern for sellers is whether a seller should keep their sales tax permits current if they are dealing with a state that imposes marketplace facilitator laws. The general consensus is yes. Remember, a facilitator only handles the sales tax on transactions sold through its platform.
If Amazon is collecting sales tax on your behalf in Washington, but you are located in Washington and you sell items through your business website, too, you still need to collect, remit, and file in the state on your own. To do that, you must have a current license or permit. And in most states, if you don’t conduct sales outside of those with the facilitator, you’re required to file a simple “zero return” saying so, or register for non-reporting sales tax status.
It’s imperative that you, as the seller, arm yourself with all of the relevant information about possible marketplace facilitator laws. Below we’ll share all of the information that we know on which states currently impose these laws and the facts you need to know to stay up-to-date.
If your state return includes sales to customers in states with Marketplace Facilitator laws , TaxJar’s Reports (and TaxJar’s AutoFile) will assume that your marketplace has remitted all collected taxes associated with such sales on your behalf. Our platform will adjust your returns accordingly. Explore our Help Center to learn more about how TaxJar handles this tax .
TaxJar offers one platform to manage every aspect of sales tax compliance from calculations to reporting to filing. Try our sales tax compliance platform for 30 days, completely free with no obligation.
If you’re selling to customers in multiple states through a marketplace facilitator, understanding your economic nexus in each state is crucial and ensures you remain tax compliant. However, with 46 different sales tax nexus laws, 11,000 taxing jurisdictions, and the ever-changing laws, managing your sales tax nexus status requires continuous vigilance.
Automating your sales tax through a trusted solution increases efficiency and accuracy, enabling you to focus on what’s most important: running your business. With TaxJar, you can swap the hours you’d spend navigating multi-state payment processes with automatic monthly reports, on-time filings, and friendly support when you need it the most.
Start a free 30-day TaxJar trial today . If you have any questions about how TaxJar can support your marketplace sales, reach out to our sales team.
As the laws evolve and more states become affected by marketplace facilitator laws, we will update them here. Because these laws are subject to change, you should always consult with the state’s department of revenue or a trusted tax advisor before making major decisions about your business.
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