Do I need a sales tax permit if I only sell on Amazon or Etsy?

Usually not. California, Texas, Iowa, Florida, Michigan, Maryland and most other states say a seller whose only sales in the state go through a marketplace that collects the tax doesn't need its own permit. You still need one if you also sell through your own website or in person, or if you have physical presence, such as inventory stored in a fulfilment warehouse in the state.

Do marketplace sales count toward my economic nexus threshold?

It depends on the state. California, Iowa, Maryland, Nebraska and North Carolina add marketplace sales to your direct sales when testing the threshold. Florida, Alabama and Illinois count only your sales made outside a marketplace. If your combined total crosses the line in a counting state, you register and collect on your direct sales only.

Does the marketplace or the seller pay if the tax was wrong?

The marketplace is generally liable for tax on facilitated sales. Most states relieve the seller if the marketplace collected and paid the tax, and California says it won't hold a seller liable when it can verify the facilitator paid. Keep proof that the platform is registered and collects, such as your seller agreement or the platform's certification.

Do marketplace facilitators collect local taxes and fees too?

Yes. They collect state and local sales tax at the delivery address and, in many states, related fees. Since January 1, 2022, California facilitators collect the tire fee, lumber assessment, battery fee and electronic waste fee on facilitated sales. Colorado's retail delivery fee and Maine's tire and battery recycling fees are also charged by marketplaces.

How do I report marketplace sales on my own sales tax return?

If you're registered because of direct sales, many states want total sales reported and the marketplace sales deducted. California, for example, asks you to report gross sales and deduct facilitated sales as 'other'. Iowa lets you deduct sales on which the facilitator collected. Follow each state's return instructions so the tax isn't paid twice.

Sales tax

Marketplace Facilitator Laws in 2026: Who Collects the Tax and What Sellers Still Owe

Marketplace facilitator laws in 2026: who collects sales tax on Amazon, Etsy and eBay orders, when sellers still register, and how marketplace sales count.

Edited by Sumeet YadavFounder & editor, MSMETOOLS · fact-checked against official sources

Updated October 2026 Verified against official sources 12 October 2026 16 min read

Marketplace facilitator laws — MSMETOOLS guide cover

Contents (9)

1. What a marketplace facilitator law does
2. Who counts as a marketplace facilitator
3. What the marketplace collects for you
4. When you still need your own sales tax permit
5. How marketplace sales count toward your threshold
6. Worked example: a multichannel seller
7. Reporting and record-keeping
8. Common mistakes
9. What to do next

If you sell on Amazon, Etsy, eBay, Walmart Marketplace or a similar platform, the platform almost certainly collects sales tax on your orders. That's the effect of marketplace facilitator laws, which every state with a sales tax now has. But those laws don't take every obligation off your plate. This guide is for third-party sellers, small brands that sell both on marketplaces and on their own websites, and their bookkeepers. It explains who counts as a facilitator, what the platform collects, when you still need your own permit, how states count marketplace sales toward your nexus threshold, and how to report them, with worked examples checked against state guidance in October 2026.

Quick answer

A marketplace facilitator law makes the platform that lists your goods and takes the customer's payment collect and remit the sales tax on those orders, as if it were the retailer. Every sales tax state has one. Sellers who sell only through collecting marketplaces usually don't need a permit, but direct sales and stored inventory change that.

Amazon, Etsy, eBay, Walmart and similar platforms collect state and local tax on your marketplace orders
Some states count marketplace sales toward your own threshold (California, Iowa); others don't (Florida)
Selling on your own site too? Register once your total passes the state's test, then collect only on direct sales
Inventory in a fulfilment warehouse can create nexus regardless of thresholds

What a marketplace facilitator law does

Before 2018, a marketplace seller with no physical presence in a state didn't have to collect its sales tax, and nor did the platform. After the Supreme Court's decision in South Dakota v. Wayfair allowed states to tax remote sellers based on sales volume, states faced a practical problem. Millions of small sellers on Amazon and eBay could each owe tax in dozens of states, but chasing them one by one was impossible. The answer was to put the obligation on the platform.

A marketplace facilitator law does exactly that. It defines a marketplace facilitator (some states say marketplace provider) as a business that operates a marketplace, contracts with third-party sellers to list their products, and processes or arranges payment from the buyer. For the sales it facilitates, that business is treated as the retailer. It calculates the tax at checkout, collects it from the buyer, files returns and pays the state. The marketplace seller, the business that actually owns and ships the goods, doesn't collect tax on those orders.

California's version is typical. Under its Marketplace Facilitator Act, in force since October 1, 2019, a facilitator is someone who contracts with sellers to facilitate their sales through a marketplace it operates, for a fee. Florida's statute uses "marketplace provider" and includes any physical place or electronic medium where goods are offered for sale. North Carolina simply treats the facilitator as the retailer of each marketplace-facilitated sale, subject to the same rules as any other retailer.

States adopted these rules quickly after Wayfair, and Missouri, the last state to adopt economic nexus, made marketplaces collect from January 1, 2023. In Alaska, the Alaska Remote Seller Sales Tax Commission treats a marketplace facilitator as the remote seller for every sale it facilitates on behalf of its member towns.

A sealed cardboard carton and rolls of packing tape on an office table set up for packing orders — A marketplace collects the tax on orders placed through it, but the seller who packs and ships the goods still has to track where they go.· Image: public.resource.org (CC0 1.0)

Who counts as a marketplace facilitator

The big names are obvious: Amazon, Etsy, eBay, Walmart Marketplace, TikTok Shop, Temu and Whatnot all collect tax for their sellers; all of them appear among the largest registered sellers in the Alaska remote seller commission's 2026 reports, for example. The definitions reach further than that, though. Depending on the state, they can cover:

Online craft and resale platforms, including peer-to-peer sites where individuals sell used goods.
App stores selling third-party apps and digital goods, in states that tax digital products.
Food delivery and grocery platforms that take payment for restaurants and stores.
Accommodation platforms that take bookings for hosts, in states that apply marketplace rules to lodging taxes.
Physical marketplaces in some states, such as consignment shops and auction houses. Maryland's definition, for example, extends to consignment stores and auction houses.

What usually decides it is control of payment. A platform that only hosts listings and sends buyers to your own checkout, such as a website builder or a social media shop that hands off to your payment processor, typically isn't a facilitator. If you use Shopify, Squarespace, WooCommerce or your own payment account, you're the retailer, and collecting tax on those orders is your job. A platform that takes the money and pays you out, minus fees, is usually a facilitator.

The facilitator has its own threshold, normally the same as the state's remote seller threshold, but counting every sale on the platform: its own sales plus all third-party sales delivered into the state. Iowa, for example, requires a facilitator that makes or facilitates $100,000 or more of Iowa sales to collect. Because large platforms pass every state's threshold easily, in practice they collect everywhere.

What the marketplace collects for you

On facilitated sales, the platform collects the full tax due at the delivery address: the state rate plus city, county and district taxes. Florida's law specifically requires marketplace providers to collect the county discretionary surtax where goods are delivered. The platform also applies the state's exemptions and sourcing rules, which is why the same product can show different tax at checkout in different states.

Many states also make facilitators collect fees that ride along with sales tax. Since January 1, 2022, California facilitators collect the California tire fee, the lumber products assessment, the battery fee and the covered electronic waste recycling fee on facilitated sales, so sellers no longer report those fees on marketplace orders. Colorado's retail delivery fee is remitted by the retailer or facilitator that collects the sales tax. Minnesota's retail delivery fee doesn't apply to a facilitator's sales for a third-party seller whose prior-year sales were under $100,000. Maine's marketplace facilitators collect its recycling assistance fee on tires and lead-acid batteries.

Exempt buyers are handled by the platform too. A school, nonprofit or reseller buying through a marketplace generally gives its exemption certificate to the platform, not to you. Amazon and others run business exemption programmes for that purpose.

Marketplace facilitator laws at a glance (2026)

45 + DC

Sales tax jurisdictions with marketplace laws

all of them

Jan 1, 2023

Last state to start

Missouri

$100,000

Most common facilitator threshold

all platform sales count

4 years

Texas record-keeping for marketplace sales

all sellers

When you still need your own sales tax permit

The general rule is the same across nearly every state: if all your sales into a state go through marketplaces that collect the tax, you don't register there. California says sellers whose sales are all facilitated by a registered facilitator generally don't need a seller's permit. Texas says a remote seller who sells only through a marketplace provider that certifies it's collecting doesn't need a Texas permit. Iowa says a marketplace-only seller doesn't need an Iowa permit or file Iowa returns. Michigan, Maryland, Kentucky and Louisiana say much the same.

Four situations break that rule.

You also sell directly. Sales through your own website, by phone, at craft fairs, pop-ups or trade shows aren't covered by any marketplace. Once you have nexus in a state, by passing its threshold or by physical presence, you register and collect on those direct sales yourself.

You have physical presence. Inventory is the big one. If you use a fulfilment service such as Fulfillment by Amazon, your stock may be stored in warehouses in many states, and in many of them stored inventory is physical presence. That can create nexus at any sales level. Connecticut, for instance, says an out-of-state seller storing inventory in a facilitator's Connecticut warehouse must register regardless of the thresholds. Employees, contractors, offices and attendance at trade shows can also create physical nexus.

The state asks marketplace sellers to register anyway. A handful of states have, at times, asked sellers with nexus to register and file returns showing marketplace sales as exempt or deductible, even when they owe nothing. Check the remote seller page of each state where your combined sales are large.

The marketplace isn't collecting. Smaller or foreign platforms may not be registered in every state. Florida's law, for example, puts the tax back on a seller with physical presence in Florida when the provider isn't a registered dealer. Only rely on a platform that has certified it collects, and keep the proof.

Alaska adds a twist. Sellers who sell only through marketplaces don't register with the ARSSTC but are asked to complete a marketplace seller affidavit, so the commission knows why they aren't filing.

How marketplace sales count toward your threshold

This is the question that catches most multichannel sellers. When you test whether your direct sales create economic nexus, do you add in your marketplace sales? States split.

Do marketplace sales count toward the seller's own threshold?

State	Threshold	Marketplace sales count?	What it means
California	$500,000	Yes	Add facilitated sales to direct sales; collect only on direct
Iowa	$100,000	Yes	Add both channels; deduct marketplace sales on the return
Maryland	$100,000 or 200 transactions	Yes	Direct and marketplace sales are added together
Nebraska	$100,000 or 200 transactions	Yes	Marketplace sales count; the marketplace collects on them
North Carolina	$100,000	Yes	Gross sales including marketplace sales
Florida	$100,000	No	Only sales made outside a marketplace count
Alabama	$250,000	No	Only direct retail sales count
Illinois	$100,000	No	Marketplace sales excluded from the remote retailer test

California

Threshold: $500,000
Marketplace sales count?: Yes
What it means: Add facilitated sales to direct sales; collect only on direct

Iowa

Threshold: $100,000
Marketplace sales count?: Yes
What it means: Add both channels; deduct marketplace sales on the return

Maryland

Threshold: $100,000 or 200 transactions
Marketplace sales count?: Yes
What it means: Direct and marketplace sales are added together

Nebraska

Threshold: $100,000 or 200 transactions
Marketplace sales count?: Yes
What it means: Marketplace sales count; the marketplace collects on them

North Carolina

Threshold: $100,000
Marketplace sales count?: Yes
What it means: Gross sales including marketplace sales

Florida

Threshold: $100,000
Marketplace sales count?: No
What it means: Only sales made outside a marketplace count

Alabama

Threshold: $250,000
Marketplace sales count?: No
What it means: Only direct retail sales count

Illinois

Threshold: $100,000
Marketplace sales count?: No
What it means: Marketplace sales excluded from the remote retailer test

California's Department of Tax and Fee Administration is explicit: when you test the $500,000 threshold, include your own sales, sales by related businesses, and sales facilitated through a marketplace. Iowa says the same and gives its own example: a seller with $400,000 of Iowa revenue, $325,000 of it through a facilitator, must register and collect on the remaining $75,000 from its website.

Florida goes the other way. Its marketplace statute tells a marketplace seller to "consider only those sales made outside of a marketplace" when working out whether it makes a substantial number of remote sales, meaning more than $100,000 of taxable remote sales in the previous calendar year.

The difference matters most for sellers whose marketplace business is large and whose own website is small. A seller with $480,000 of Amazon sales into California and $25,000 of website sales has crossed California's line. The same split into Florida wouldn't come close. Our economic nexus guide lists every state's threshold and measurement period.

Worked example: a multichannel seller

An Ohio company sells kitchenware through Amazon and its own Shopify website. In the previous calendar year its sales into three states were:

Testing nexus with marketplace and website sales

State	Amazon	Own website	Count for threshold	Register?
California	$380,000	$150,000	$530,000 (both)	Yes, over $500,000
Florida	$190,000	$60,000	$60,000 (website only)	No, under $100,000
Iowa	$70,000	$40,000	$110,000 (both)	Yes, over $100,000

California

Amazon: $380,000
Own website: $150,000
Count for threshold: $530,000 (both)
Register?: Yes, over $500,000

Florida

Amazon: $190,000
Own website: $60,000
Count for threshold: $60,000 (website only)
Register?: No, under $100,000

Iowa

Amazon: $70,000
Own website: $40,000
Count for threshold: $110,000 (both)
Register?: Yes, over $100,000

California. Combined sales of $530,000 pass the $500,000 threshold, so the business registers with the CDTFA and collects on its $150,000 of website sales. At the minimum statewide rate of 7.25%, that's at least $10,875 of tax to collect, and more in cities with district taxes. Amazon keeps collecting on the $380,000. On its California return, the company reports $530,000 of total sales and deducts the $380,000 of facilitated sales as "other", so tax is paid only once.

Florida. Only the $60,000 of website sales count, which is under $100,000. The company doesn't register in Florida, and Amazon's collection covers the marketplace orders. If website sales grow past $100,000 in a calendar year, it must register for the following year.

Iowa. Combined sales of $110,000 cross $100,000. The company registers and collects Iowa's 6% state tax plus any local option tax on its $40,000 of website orders, which is $2,400 of state tax. Its returns report all Iowa sales and deduct the $70,000 Amazon already taxed.

Now add inventory. If the company joins Fulfillment by Amazon and stock is placed in a Florida warehouse, it may have physical presence in Florida whatever its sales. Then it would register there too and collect on its own website orders delivered to Florida customers, even at $60,000 a year.

Postal clerks unloading parcels onto a roller conveyor in a mail room, with bins of packages on the right — Where your stock sits matters as much as where it's sold: inventory stored in a state can create nexus with no sales threshold at all.· Image: U.S. Air Force photo by Senior Airman Renan Arredondo (Public domain)

Reporting and record-keeping

When you're registered in a state, your sales tax return usually wants the full picture. California asks registered sellers to report total sales, including facilitated sales, and then deduct the facilitated sales as "other". Iowa lets you deduct marketplace sales on which the facilitator collected tax. Other states ask you to leave marketplace sales off entirely. The return instructions for each state say which approach applies; getting it wrong either overstates your tax or leaves a gap an auditor will spot.

Keep evidence that each marketplace is registered and collecting. California tells sellers to keep an agreement showing the facilitator is registered and responsible for the tax, or the facilitator's permit number, which you can check on CDTFA's online verification service. Florida requires marketplace providers to certify to their sellers that they will collect and remit. Texas requires all sellers to keep records of all marketplace sales for at least 4 years. Download monthly marketplace tax reports and store them with your sales records; they're what you'll show an auditor if a state asks why you didn't collect on those orders.

Liability generally sits with the facilitator. California won't hold a marketplace seller liable for tax on a facilitated sale if it can verify the facilitator collected and paid the right tax. California can also relieve a facilitator in limited cases set out in its tax code, including errors caused by incorrect information from the seller, so accurate product tax codes in your listings protect you as well as the platform.

Marketplace facilitator laws are only about sales tax. They don't change your income tax. All marketplace sales are still your revenue, and platforms report gross payments to the IRS on Form 1099-K. When you calculate income, the tax a marketplace collected and paid isn't your income, because it was never yours.

Setting up multichannel sales tax compliance

1
Map every channel
List each marketplace, your own website, and any in-person sales. Confirm that each marketplace collects in every state you ship to.
2
Pull sales by state
Export twelve months of sales by delivery state, split into marketplace and direct sales, using each state's measurement period.
3
Test each state's threshold
Add marketplace sales in states that count them; leave them out in states that don't.
Economic nexus thresholds
4
Check for physical presence
Find out which states your fulfilment inventory is stored in, and where you have staff or contractors.
5
Register and collect on direct sales
Register where you have nexus, set your own checkout to charge the right rate, and report marketplace sales as each state's return requires.
How to calculate sales tax

Common mistakes

Assuming the marketplace covers your website. Amazon collects on Amazon orders only. Your Shopify store, your wholesale invoices and your craft fair sales are yours to tax.

Testing thresholds with website sales only. In California, Iowa, Maryland and other counting states, a seller with a big marketplace business can cross the line with a tiny website.

Ignoring FBA inventory. Stored stock is one of the most common sources of unexpected nexus for marketplace sellers.

Collecting tax twice. Some sellers add tax in their own listings or invoices on top of what the marketplace collects. That over-collects from the buyer, and over-collected tax must be refunded or paid to the state.

Reporting marketplace sales without the deduction. On states' returns that ask for gross sales, forgetting to deduct facilitated sales means paying tax the marketplace has already paid.

Not closing registrations you no longer need. If you registered years ago and now sell only through marketplaces, check whether you can close the account, as Kentucky and Illinois sellers did after their transaction tests were removed. Keep filing until it's formally closed.

Marketplace seller checklist

0/7

Official links

What to do next

If you sell only through marketplaces, confirm each one collects everywhere you ship, keep the paperwork, and check where your inventory sits. If you also sell directly, run your numbers through the economic nexus table, register where you need to, and set up checkout tax with our how to calculate sales tax guide. For platform-specific setup, see how to sell on Amazon and how to sell on Etsy, and use the marketplace profit calculator to see what each sale really earns after fees.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

It's a state law that makes an online platform such as Amazon, Etsy, eBay or Walmart Marketplace collect and pay sales tax on sales it facilitates for third-party sellers. The platform is treated as the retailer for those orders. Every state with a sales tax has one, and Missouri was the last to start, on January 1, 2023.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 12 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1.Tax Guide for Marketplace Facilitator Act — California Department of Tax and Fee Administration · accessed 12 October 2026
2.Florida Statutes s. 212.05965 — Taxation of marketplace sales — The Florida Senate · accessed 12 October 2026
3.Florida Statutes s. 212.0596 — Taxation of mail order sales — The Florida Senate · accessed 12 October 2026
4.Remote Sellers & Marketplace Facilitators — Iowa Department of Revenue · accessed 12 October 2026
5.Remote Sellers — Texas Comptroller of Public Accounts · accessed 12 October 2026
6.Marketplace Providers — Texas Comptroller of Public Accounts · accessed 12 October 2026
7.Marketplace Facilitators and Marketplace Sellers — North Carolina Department of Revenue · accessed 12 October 2026
8.Frequently Asked Questions — Alaska Remote Seller Sales Tax Commission · accessed 12 October 2026
9.1st Quarter 2026 Update and Overview — Alaska Remote Seller Sales Tax Commission · accessed 12 October 2026

MSMETOOLS is an independent platform and is not affiliated with any government agency, ministry or department.

We provide tools, guides and information for general educational purposes only. Always refer to official government websites for the latest and most accurate information.