In the United States, state and local governments set their own laws for sales and use tax on goods and services. There’s no federal standard for indirect taxes, and the variety of regulations across the country create a network of different compliance requirements.

For marketplace sales, which usually include at least three participants (a marketplace, a seller, and a purchaser), there’s increased complexity in tax compliance. In 2017, for example, state officials in South Carolina noticed that although Amazon collected and remitted sales tax on its own products, it did not do the same for products sold by third-party businesses on its platform. As ecommerce picked up traction and marketplaces became common across industries, state governments began drafting marketplace facilitator laws. Regulators needed to decide who was responsible: the marketplace or the seller?

Not every state in the US charges sales tax. But the states that do generally give marketplaces responsibility for collecting and remitting sales or use tax to the state. These laws are in different phases of development and ongoing court cases continue to challenge regulations: both sellers and marketplaces need to keep up in real time.

In this guide, you will learn about the tax obligations of marketplaces in the US and how to comply with laws and regulations. We break down the legal definitions of relevant terms, types of transactions that occur for marketplaces and sellers, the scope of tax collection obligations and liabilities, and state-to-state nuances.

Defining the relevant terms

Understanding marketplace tax liability begins with defining the relevant terms that legislators use to draft new regulations. Although there are discrepancies and nuances state by state, here’s a breakdown of generally acceptable definitions that can guide compliance:

Marketplace

A marketplace is a physical or a digital platform where marketplace sellers sell or offer to sell tangible personal property, taxable services, or digital goods.

Marketplace facilitator

A marketplace facilitator is a business or organization that contracts with third parties to sell goods and services on a digital or physical platform. It facilitates retail sales by listing the products and services, taking payments, collecting receipts, and in some cases, assisting in shipment.

Marketplaces are as diverse as they are popular—whether they give customers a place to buy retail products, food delivery, concert tickets, and ride-sharing or support gig workers providing a range of services, from graphic design to maintenance.

The definition of marketplace facilitator varies from state to state. Most definitions are intentionally inclusive, aiming to capture a broader swath of platforms, but the nuances of the definition vary across state tax laws.

In general, state tax laws dictate that all marketplace facilitators conduct at least one of these activities:

• Transmitting or communicating the offer or acceptance between the buyer and marketplace seller
  
• Owning or operating the infrastructure (electronic or physical) or technology that brings purchasers and marketplace sellers together
  
• Listing products for sale
  
• Providing fulfillment or storage services
  
• Setting prices
  
• Taking orders
  
• Advertising or promoting the sellers’ products
  
• Providing customer service, or accepting or assisting with returns or exchanges
  

Because there is no national definition, a platform could be considered a marketplace facilitator in one state but not another. For example, some states include “payment processing” in their definition of marketplace facilitators. Others require that marketplace facilitators that process payments also handle other services, including fulfillment, branding, or advertising.

In Florida, a business must collect the payment from a customer to even qualify to be considered a marketplace facilitator. Based on current regulations, a marketplace that does not collect payments wouldn’t be considered a marketplace facilitator in Florida, despite being considered one in North Carolina. We recommend reaching out to a tax advisor to determine if your business is a marketplace facilitator.

Marketplace seller

A marketplace seller is a person or business, unrelated to a marketplace facilitator, who has an agreement with the marketplace facilitator to sell tangible personal property, taxable services, or digital goods through a marketplace owned, operated, or controlled by the marketplace facilitator. Even if the marketplace seller doesn’t have to register for sales tax purposes, they’re still considered a marketplace seller.

Marketplace sellers provide a range of goods and services across both business-to-consumer (B2C) and business-to-business (B2B) channels, from personal property and physical goods to taxable services—such as childcare, parking, and website design—and digital goods, including streamed video games, digital books, and software-as-a-service (SaaS).

The nuts and bolts of taxes for marketplace facilitators

Sales tax registration for marketplace facilitators

Marketplace facilitators are required to register for sales tax when they fall into one of two categories. If they have a physical nexus in a state, they need to register with the state regardless of sales volume. A physical nexus means that they have an established location in the state through an office, a warehouse, employees or agents that work locally, or even stored inventory with a third-party logistics company or on consignment.

Even if a marketplace facilitator doesn’t meet any of those requirements, it still has an economic nexus if it facilitates sales on behalf of one or more marketplace sellers, or sells tangible personal property in the state, transfers products electronically, or offers remote services that exceed certain monetary or transaction thresholds. Although the threshold varies state to state, most states set the threshold at 200 separate transactions or $100,000 USD in sales volume. To determine whether marketplace facilitators hit transaction thresholds, they must track and combine their direct sales with sales made through marketplace sellers.

Types of marketplace transactions

If an online platform matches the state definition of a marketplace facilitator and meets the local registration requirements, it’s subject to tax collection obligations on all sales of taxable tangible personal property, digital goods, and services facilitated through the platform. Some states also have exclusions for specific transactions facilitated by short-term rental platforms, ride-sharing services, and food delivery platforms. For example, California excludes food delivery and rental vehicle platforms.

Goods and services

When people think of marketplaces, they might think of consumer goods, from furniture to clothing and books. But marketplaces also exist for B2B industries and for niche services sectors, such as e-learning. For example, Thinkific, Kajabi, Teachable, and Udemy all give online creators and educators the opportunity to reach customers in the US through their marketplaces. In the case of goods and services, marketplace facilitator laws apply, and creators are not liable for collecting and remitting sales tax.

Rental platforms

Many states include platforms such as Airbnb and Vrbo within the scope of their marketplace facilitator laws, although a few states—including California and Nevada—count short-term accommodations as nontaxable services. States also classify certain types of transactions differently and have inconsistent definitions and applications.

For example, in Kansas, the definition of “marketplace facilitator” excludes platforms that facilitate hotel room rentals. However, Kansas does count a business that facilitates rentals of rooms that are not hotel rooms as a marketplace facilitator. The state of Washington excludes platforms from the marketplace facilitator definition if they enable customers to book a hotel or similar facility for less than 30 days. And a few states have not specified whether marketplace collection obligations apply to rental marketplaces altogether.

Finally, a rental platform might have a collection and remittance obligation that extends beyond sales tax to include additional state and local rooms and rental taxes on sales of accommodations and rental cars.

Ride-sharing platforms

Ride-sharing platforms such as Uber and Lyft offer a transportation network that offers and arranges rides. In many states, legislators haven’t addressed the sales tax implication of the “sharing economy” supply model. This is because most states do not directly impose sales tax on ride-sharing services.

Food delivery platforms

Food delivery platforms—including Uber Eats, DoorDash, and Grubhub—are similar to ride-sharing platforms in that they facilitate orders or delivery by a third-party service. More than 15 states haven’t provided guidance on collection and remittance tax obligations for these kinds of platforms.

Regardless of whether a state taxes food orders, it might also tax delivery fees. Even when guidance from each state is not clear, many food delivery platforms are electing to collect sales tax as a marketplace facilitator for liability reasons.

Beyond sales and use tax

Although state sales and use tax are the most common taxes within the scope of marketplace facilitator laws, they are not the only kinds of relevant taxes. As marketplaces become more commonplace, many states and local municipalities have expanded collection and remittance requirements for marketplace facilitators beyond sales tax.

Here are some examples:

• West Virginia marketplace facilitator laws apply to hotel occupancy tax. When a marketplace collects hotel occupancy tax, it must remit the taxes to the counties and municipalities directly because the state tax authority does not administer that process.
  
• North Carolina requires marketplace facilitators to collect and remit scrap tire disposal tax, white goods disposal tax, dry cleaning solvent tax, and the 911 service charge for prepaid wireless telecommunications service.
  
• In Wisconsin, a platform selling any kind of lodgings (hotels and short-term rentals) may also be liable for related taxes, including premier resort area taxes, local exposition taxes, and municipal room taxes.
  
• New Hampshire may be one of the only states without general sales and use tax, but it does require that marketplace facilitators impose other taxes on meals, accommodations, and rental cars.
  

Voluntary tax collection obligations

Many marketplaces are entering agreements with states to voluntarily collect sales tax. Since more states are expanding the definition of marketplaces, which would increase tax liability, many companies are making the changes now rather than waiting for new legislation. Airbnb, for example, collects taxes in Oklahoma and Pennsylvania, even though it would not otherwise be obligated to do so.

Tax reporting requirements

Most states require that marketplace facilitators file one sales tax return that reports both sales made through its platform by marketplace sellers, as well as its own separate sales. However, some states, including Georgia and Tennessee, require marketplace facilitators to report their own sales through a separate account or sales tax return. North Carolina allows but does not require a marketplace facilitator to file a separate return for marketplace-facilitated sales, as long as the business registers for a separate sales and use tax account identification number.

Sometimes, reporting requirements extend beyond communication between state and local officials. Texas, Connecticut, and Wisconsin, for example, all require that marketplace facilitators notify marketplace sellers that they will collect and remit sales tax on their behalf to avoid miscommunication.

Liability for incorrectly calculated taxes

Liability is a significant concern for marketplace facilitators as they scale in size and geographic area. Many states have prohibited class action lawsuits against marketplace facilitators by purchasers who allege an overcollection of sales or use tax to provide some protection against liability. In some states, the liability for uncollected and unremitted taxes shifts back to the marketplace seller if the seller failed to provide the correct information that would enable tax compliance.

Marketplace sellers and their tax obligations

Tax registration and reporting for marketplace sellers

All states with sales or use tax have economic nexus thresholds, which require out-of-state sellers to register with the state for tax purposes. States with no sales tax do not require registration, unless their municipalities collect sales tax (Alaska), or they collect other kinds of taxes and fees (New Hampshire). Close to half of the states exclude marketplace sales from the economic nexus threshold, including Alabama, Arizona, Indiana, and Pennsylvania.

Marketplace sellers are not required to report their gross sales facilitated by a marketplace facilitator (assuming the facilitator remitted the applicable sales tax) unless they meet the economic nexus threshold.

A marketplace seller’s physical presence in a state usually triggers a registration requirement since nexus can be established by physical presence or economic activity, although some exceptions exist if all sales happen through a marketplace facilitator.

Here’s a breakdown of tax registration guidelines for marketplace sellers:

*Although New Hampshire does not collect sales tax, it requires registration for other kinds of taxes and fees for specific industries. Alaska does not collect sales tax, but many municipalities do and require registration.

Registration requirements also dictate reporting requirements and vary state by state. For example, if a state law requires that the marketplace seller registers, it also will require that the seller file a tax return. However, some marketplace sellers that only sell through a facilitator qualify for simplified reporting, such as annual filing.

Tax collection liabilities

Marketplace sellers are not liable to collect sales tax when selling through marketplace facilitators in every state but Hawaii. Sellers are only liable for wholesale general excise tax for customers in Hawaii.

However, marketplace sellers might need to demonstrate that marketplace facilitators are collecting and remitting sales tax for their transactions. Colorado, for example, requires that marketplace sellers sign a contract with marketplace facilitators, in which the latter must collect relevant taxes. Sellers need to submit a “certificate of proof” for the contract in Colorado, as well as in Alabama, Connecticut, Florida, and New York.

In many states, the liability of collecting and remitting sales tax can transfer back to the seller if the marketplace facilitator fails to collect because of insufficient or incorrect information from the marketplace seller. For example, if a seller wrongly labeled a product as part of a category or product that’s not taxed, and the marketplace facilitator doesn’t collect that tax, the seller can be liable for that mistake.

At the same time, some states—including Ohio and Wisconsin—have an “opt-out” provision that allows a marketplace facilitator and a marketplace seller to enter a written agreement that the seller assumes responsibility for collection and remittance of sales tax.

State-by-state nuances for marketplace taxes

There are six states that have notable exceptions to marketplace facilitator laws, and one state that’s implementing new stipulations as of November 2025. Here are the most important local distinctions to note for marketplaces:

Alabama: Alabama offers marketplace facilitators a choice—they must either collect and remit the 8% simplified sellers use tax on behalf of sellers, or comply with reporting and customer notification requirements for sales made on their platforms.

Alaska: Although Alaska doesn’t impose state sales or use tax, several municipal governments have created a centralized commission called ARSSTC to collect taxes from marketplace facilitators.

Colorado: In home rule jurisdictions, Colorado’s home rule cities develop their own marketplace facilitator laws. The vast majority have already adopted marketplace laws.

Hawaii: Marketplace sales in Hawaii are generally subject to both the standard retail rate and the reduced wholesale rate. While services and tangible personal property are subject to the wholesale rate, intangible property is not. Responsibility for remitting the wholesale rate depends on whether the marketplace seller is registered in Hawaii.

Louisiana: In 2023, Louisiana law erased the 200-transaction minimum for the state’s economic nexus threshold for both remote sellers and marketplace facilitators. Legislators have also changed the economic nexus threshold for marketplace facilitators and remote sellers from $100,000 in gross sales to $100,000 in retail sales.

Texas: In Texas, marketplace facilitators collecting taxes on behalf of sellers on their platforms cannot use the single local use tax rate (currently 1.75%). Instead, they need to collect local taxes at the standard rate, which is currently up to 2%.

Washington: Marketplace sellers are responsible for “retailing business and occupation” (B&O) tax on sales. If marketplace facilitators earn commissions from sellers for facilitated sales, the commission income is also subject to B&O tax.

How Stripe can help

Stripe empowers marketplaces to build and scale global payments and financial services businesses with less overhead and more opportunities for growth. Stripe Tax reduces the complexity of global tax compliance so you can focus on growing your business. It automatically calculates and collects sales tax, VAT, and GST on both physical and digital goods and services in all US states and more than 100 countries. Stripe Tax is natively built into Stripe, so you can get started faster—no third-party integration or plug-ins are required.

Stripe Tax can help marketplace facilitators:

• Understand where to register and collect taxes: See where you need to collect taxes based on your Stripe transactions. After you register, switch on tax collection in a new state or country in seconds. You can start collecting taxes by adding one line of code to your existing Stripe integration or by adding tax collection to Stripe no-code products, such as Invoicing, with the click of a button.
  
• Register to pay tax: If your business is in the US, let Stripe manage your tax registrations, and benefit from a simplified process that prefills application details—saving you time and simplifying compliance with local regulations. If you’re located outside the US, Stripe partners with Taxually to help you register with local tax authorities.
  
• Automatically collect sales tax: Stripe Tax calculates and collects the amount of tax owed. It supports hundreds of products and services, and it is up-to-date on tax rule and rate changes.
  
• Simplify filing and remittance: With our trusted global partners, users benefit from a seamless experience that connects to your Stripe transaction data—letting our partners manage your filings so you can focus on growing your business.
  

Learn more about Stripe Tax.