Marketplace Facilitators to Collect and Remit Indiana Sales Tax

[May 8, 2019] Effective July 1, 2019, marketplace facilitators are required to collect and remit Indiana sales tax as retail merchants when they facilitate retail transactions for sellers. The recently-enacted law provides that a marketplace is considered a retail merchant if it does any of the following on behalf of the seller:

(1) collects the sales price or purchase price of the seller’s products;

(2) provides access to payment processing services, either directly or indirectly; or

(3) charges, collects or otherwise receives fees or other consideration for transactions made on its electronic marketplace.

The marketplace facilitator is required to collect and remit tax, even if the seller does not have a registered retail merchant certificate or would not be required to collect tax had the transaction not been facilitated by the marketplace. The definition of  “marketplace facilitator” excludes a payment processor business that is appointed by a merchant to handle payment transactions from various channels, including credit and debit cards, and whose sole activity with respect to marketplace sales is handling payment transactions between two parties.

A marketplace facilitator or seller that does not have a physical presence in Indiana will not be required to collect and remit Indiana sales tax if its annual sales into Indiana do not exceed $100,000 or 200 or more separate transactions. 

Author

Denise Hatem

Denise Hatem is a Regulatory Counsel at Sovos specializing in international taxation, with a focus on value added tax systems in the European Union. Denise received her B.A. from the University of Connecticut and her J.D. from Notre Dame Law School. She is an active member of the Massachusetts Bar.
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