All 37 U.S. States Requiring Marketplaces Collect Sales Tax Automatically Starting January 1, 2020

Collecting sales tax is a seemingly constant point of contention for sellers. Some states require all the tax handling to be done manually, some have laws that make it an almost automatic process, and the rest fall somewhere in between. As time passes, more states are requiring that marketplaces such as Amazon, eBay, Walmart, and others, collect sales tax for purchases made on the platform from 3rd-party sellers and remit those taxes to the states (called Marketplace Facilitator laws). In this post, we’ll cover all the states that will have this requirement as of January 1, 2020.

What are Marketplace Facilitator Laws?

Several dozen states have various forms of what is called Marketplace Facilitator laws. These laws dictate that Marketplace Facilitators are responsible for ensuring sales tax is properly collected and remitted to states from items sold.

What is a Marketplace Facilitator?

TaxJar explains this very well:

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.

The list of U.S. States with Marketplace Facilitator Laws Starting January 1, 2020

Here is the entire list of U.S. states that have Marketplace Facilitator laws on the books and the date they went into effect or will go into effect (bold, at the end):

  • Minnesota – October 1, 2018
  • Washington – October 1, 2018
  • Connecticut – December 1, 2018
  • Iowa – January 7, 2019
  • Oklahoma – January 7, 2019
  • Pennsylvania – February 1, 2019
  • New Jersey – March 1, 2019
  • South Dakota – March 1, 2019
  • District of Columbia – April 1, 2019
  • Alabama – April 1, 2019
  • South Carolina – May 1, 2019
  • Nebraska – May 1, 2019
  • Idaho – June 1, 2019
  • New York – June 1, 2019
  • Arkansas – July 1, 2019
  • Indiana – July 1, 2019
  • Kentucky – July 1, 2019
  • New Mexico – July 1, 2019
  • Rhode Island – July 1, 2019
  • North Dakota – July 1, 2019
  • Virginia – July 1, 2019
  • West Virginia – July 1, 2019
  • Wyoming – July 1, 2019
  • Vermont – July 1, 2019
  • Ohio – September 1, 2019
  • Arizona – October 1, 2019
  • California – October 1, 2019
  • Colorado – October 1, 2019
  • Maine – October 1, 2019
  • Maryland – October 1, 2019
  • Massachusetts – October 1, 2019
  • Nevada – October 1, 2019
  • Texas – October 1, 2019
  • Utah – October 1, 2019
  • Wisconsin – January 1, 2020
  • Illinois – January 1, 2020
  • Hawai’i – January 1, 2020

How to Handle Marketplace Facilitator Laws as a Seller

One thing that’s 100% worth pointing out is that just because the marketplace is collecting and remitting sales tax dollars for you, does not mean you’re off the hook for filing sales tax returns. For every state in which you sell goods, you may be required to file a sales tax return within that state. Both TaxJar and Ecom Tax (my favorites) have the capability to run your transaction history and determine your nexus status for all the states. If they determine you have nexus, you are required to file a sales tax return. These tools can help with that, too.

Last Updated: February, 7th, 2021 at 07:19 pm UTC
Johnathan Lyman

Johnathan Lyman



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