With the rapid growth of online sales and companies like Amazon and Ebay, marketplace facilitation has become increasingly popular, but is also very complicated. As explained by avalara, states continue to be very aggressive in finding new ways to bring revenue into their state. Many have enacted marketplace facilitator laws, which are laws that regulate marketplace facilitation and vary by state and municipality. As with all things multistate, uniformity is not always the case and different pieces of legislation can get very confusing.
In this post, we review what the idea of marketplace facilitation is, what the marketplace facilitator laws are and how marketplace facilitator laws are impacting retailers.
What is a Marketplace Facilitator?
In an article by accuratetax.com, a marketplace facilitator is defined as a company that operates a marketplace or “selling space” on a large platform (i.e., Amazon or eBay). Companies are then able to sell their products through that platform via the marketplace facilitator. The benefit to these companies is that they are able to reach a much larger audience by selling via the marketplace than if they sold their products on their own. Note though, that many sellers also continue to sell direct to customers through their own website, in addition to the marketplace.
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