multistate tax symposium - deloitte united states · 2020. 10. 22. · •wrap up and questions. 4...

The 2020 National Multistate Tax SymposiumMastering the Art (and Articulation) of State Tax—Distilling the Complex

January 29-31, 2020

Indirect tax: Marketplace facilitators – could this be you?William Lasher, eBay Inc. (Retired)Janette M. Lohman, Thompson Coburn LLPKathy Saxton, Deloitte Tax LLP

January 29-31, 2020

3The National Multistate Tax Symposium: January 29-31, 2020Copyright © 2020 Deloitte Development LLC. All rights reserved.

Agenda

•Marketplace facilitator considerations

−Who are Marketplace providers? Could it be you?

−Emerging business models

◦ Types of shared economies

−The Legislative Models

−Where are we today?

•MTC White Paper (December 2019)

−What did it address?

−What did it miss?

•Wrap up and questions

4

The Shared Economy and Marketplace Facilitator Considerations for Sales Tax


Marketplace Provider - Could this be you?

Could you inadvertently be swept in under broad definitions of “marketplaces”?

• Answers may vary by state or locality

Some states provide exceptions for particular “unintended” or highly complex industries

✓ Payment processors

✓ Advertisers

✓ Delivery services

✓ Travel and accommodations services/car rentals

Let’s dive into the issues……


Marketplace Facilitator Definition

A physical or electronic forum where a marketplace seller can sell or offer for sale tangiblepersonal property or taxable services.

Example: Marketplace Facilitator - A person that facilitates the retail sale of tangible personal property ordigital property by listing or advertising the tangible personal property for sale at retail and either directly orindirectly through agreements or arrangements with third parties, collects the payment from the purchaser,and transmits the payment to the person selling the property

Key Features:

• Listing or advertising the item for sale

• Collects payment

• Transmits the payment to seller

8


Major Versions of Marketplace Laws

Three distinct legislative models:

➢ With no exceptions, marketplace provider/facilitator collects and remits sales tax.

➢ A waiver process where registered third-party sales tax vendors can opt out of the platform remitting on their behalf.

➢ Platform has the option to collect and remit sales tax on third-party sales, or comply with the ‘Colorado-style” information reporting requirements.


Emerging Business Models

• Delivery/Transport

o Transportation of people

o Transportation of goods

• Rentals

o Rental of TPP

o Rental of Real Property

• Marketplace Platforms

o Marketplace of goods

o Marketplace of services

o Marketplace of digital goods

• Other Platforms

o Video sharing / training


Indirect Tax Implications….

✓ Nexus

✓ Characterization of the Sale

✓ Taxability

✓ Sourcing

✓ Collection Responsibility


Marketplace facilitator states (as of January 8, 2020)

Post-Wayfair landscape

. .

States that have passed marketplace facilitator legislation/rules*

(*Not necessarily effective yet)

11

Multistate Tax Commission – White Paper, December 2, 2019


Wayfair Implementation & Marketplace Facilitator Work Group 2019 White Paper

• Background

• Overview and Observations


Pertinent Issues Addressed:

1. Definition of a Marketplace Facilitator/Provider

2. Who is the Retailer?

3. Recordkeeping, Audit Exposure and Liability Protection

4. Informational Reporting Requirements – Provider/Seller

5. Collection Responsibility

6. Seller Nexus Considerations

7. Certification Requirements

8. Return Simplification

9. Local Taxes (certain issues)



1. Definition of a Marketplace Facilitator/Provider

◦ Narrow vs broad definitions

◦ Possible inconsistencies across states

◦ Potential industry exclusions

− Payment processors

− Advertisers

− Delivery services

− Travel and accommodations

− Car rentals, etc.

2. Who is the Retailer?

◦ Does liability shift?



3. Recordkeeping, Audit Exposure and Liability Protection

◦ Most states provide that the Provider is subject to audit

◦ What if seller provides bad information?

◦ Potential for two audits?

4. Informational Reporting Requirements – Provider/Seller

◦ Who determines taxability

◦ All information needed to file returns

5. Collection Responsibility

◦ Who’s responsible

◦ Some states allow negotiation

◦ Case-specific waivers

◦ What about other taxes and fees that may be required?



6. Seller Nexus Considerations

◦ Direct sales versus facilitated sales

7. Certification Requirements

◦ Certain states require Provider to certify to Seller that it has commenced collecting SUT on facilitated sales

◦ Two states and several businesses oppose

8. Return Simplification

◦ Inconsistencies on what and when Sellers need to report

9. Local Taxes

◦ Streamlined states – have some simplifications built in

◦ Home Rule States – working to create centralized filing systems

◦ Remote sellers allowed a single combined rate - (AL, TX, LA)

◦ Phasing in adoption of destination sourcing – (CO and NM)


Potential Opportunities and Issues Missed:

1. Vendor Compensation

◦ Administrative costs are shifted to Marketplaces

2. Occasional Sales

◦ The exemptions for an occasional sale of a Seller may not be available to a Marketplace

3. Seller Exemptions

◦ Discussion still needs to occur to address how selling via a Marketplace could impact the availability and how to administer the exemptions

− e.g. – the marketplace is not exempt, but the seller may be

4. Local Taxes

◦ Similarly, many details need to be worked through related to “instate” and “remote” marketplaces


Contact information

Kathy Saxton

Deloitte Tax LLP

[email protected]

William Lasher

eBay Inc (Retired)

[email protected]

Janette M. Lohman

Thompson Coburn LLP

[email protected]

mailto:[email protected]




This presentation and related panel discussions contain general information only and the respective speakers and their firms are not, by means of this presentation, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. The respective speakers and their firms shall not be responsible for any loss sustained by any person who relies on this presentation.

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Copyright © 2020 Deloitte Development LLC. All rights reserved.

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multistate tax symposium - deloitte united states · 2020. 10. 22. · •wrap up and questions. 4...

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