Key takeaways

Understanding US sales tax rules is essential for marketplace facilitators and remote sellers, who should track different state laws, register correctly, and manage both direct and marketplace sales. Using reliable solutions and expert support reduces errors, keeps your business compliant, and lets you focus on growth without risking fines or audits.

Key points:

• Sellers and facilitators have different registration and reporting duties depending on each state’s rules, so regularly check your obligations.
• Marketplace facilitators typically collect and remit sales tax for third-party sellers, but remote sellers remain responsible for their own direct sales outside marketplaces.
• Sales tax is based on the destination (shipping address), not the seller’s location, so always check where your customers receive their products.
• Some states allow written agreements to shift tax responsibilities, but most default to the marketplace handling sales tax. Know what applies to your business.
• Using expert compliance support and smart systems helps avoid errors and costly penalties.

The best way for marketplace facilitators and remote sellers to meet US Sales Tax Compliance is to understand state rules, register correctly, and use smart solutions like 1stopVAT to manage complex requirements. Remote sellers should track both marketplace and direct sales, as missing steps can result in costly penalties.

Marketplace facilitator laws across the US hold facilitators responsible for collecting and remitting sales tax on behalf of third-party sellers. As a remote seller or facilitator, you’ll face different rules from state to state. It’s not just about registering once and calling it done. 

States watch closely—mistakes around tax registration, sales tax collection, and remittance can add up fast. At 1stopVAT, we’ve helped sellers avoid common pitfalls and keep their businesses safe, so you can focus on growth instead of worrying about tax compliance.

Let’s break down what facilitators and remote sellers really need to know.

Introduction to Marketplace Facilitator Laws

Marketplace facilitators should collect and remit US sales tax on behalf of third-party (remote) sellers in most states. State tax departments expect you to follow the latest rules for every transaction, whether selling shoes or streaming eBooks. Why does this matter? Tax risks are real—penalties, back taxes, and business blocks if you don’t stay compliant.

Sales tax compliance in the US is anything but simple. Remote sellers are often surprised to find they’re responsible for both their own store’s sales and those made on large marketplaces. If you’re new to this, it’s easy to feel lost. 

That’s where expert solutions like 1stopVAT come in. We support businesses with everything from initial tax registration to regular sales tax remittance, letting you avoid headaches and penalties.

Registration for Sales Tax as a Marketplace Facilitator

Marketplace facilitators should determine where to register based on physical or economic nexus rules. If you are interested in learning more about this subject, we have already devoted time to its analysis.

Nexus means “connection”—and in the US, you don’t have to set foot in a state to owe sales tax. Economic nexus rules are triggered when your marketplace’s transactions in a state reach a certain threshold. For example, Kentucky requires registration if you surpass USD 100,000 in sales or 200 transactions in a year.

Registration involves several steps:

• Identify in which states you cross the sales/transaction threshold
• Register as a marketplace facilitator with those states’ tax authorities
• Stay aware of changes, since economic nexus amounts and rules can shift each year

Some states will require a single registration for sales on your marketplace and directly. For example, Georgia and Tennessee require separate sales tax returns for marketplace-facilitated and direct sales.

If you’re not sure where you stand, 1stopVAT’s Nexus Assessment service uses sales data to pinpoint your filing obligations—no guesswork.

How to Collect and Remit Sales Tax for Marketplace Sales

Sales tax collection isn’t one-size-fits-all. Marketplace facilitators need robust systems to calculate the correct tax rate for each customer, collect the correct amount from each transaction, and remit those funds to each state where tax is owed.

Here’s a simple breakdown:

1. Collect the right tax for every sale, based on the customer’s destination (not billing address).

2. Submit (“remit”) those taxes to the proper state authorities on a set filing schedule (monthly, quarterly, or annually).

3. File a sales tax return that details all sales, including both those you facilitate and those made directly outside the marketplace.

Some states require marketplace facilitators to file a single combined return. Others want two separate filings. Misreport this, and you could end up with fines—or an audit.

We recently assisted a remote seller who was filing in only one state, unaware that half their business crossed into three others. Using a smart compliance system, we sorted out their registrations and made sure future sales were correctly reported.

Managing Remote Supply and Destination-Based Tax

Remote supply means you’re selling into states where you don’t have a physical presence. For US Sales Tax Compliance, what matters is where your customer receives the product—the destination, not where you’re located.

For example, if you’re a remote seller in London shipping art prints to Texas, you should charge and remit Texas sales tax once you meet the state threshold. The same goes for digital goods, not just physical products. The difference? Some states treat digital products differently for tax purposes.

Key points for remote sellers:

• Always calculate sales tax using the shipping address, not the billing address.
• Understand which states tax your products or services, especially for non-physical goods.

Responsibilities of Remote Sellers on Marketplaces

Even if your marketplace handles most tax work, you have ongoing responsibilities:

• Register and collect sales tax for sales outside the marketplace (own website, social channels).
• In most states, file zero sales tax returns if you made no direct sales.
• Maintain accurate records of every sale—marketplaces don’t always keep records long-term.
• Watch opt-out clauses and state-specific rules.

Responsibilities can catch remote sellers off guard. We’ve seen cases where sellers missed old direct sales returns and received late notices from states three years later. Keeping good records and engaging experienced compliance counsel can help avoid these surprises.

State Variations and Opt-Out Agreements

Some states let a remote seller and a facilitator sign written agreements—sometimes called opt-outs—so the seller handles sales tax collection instead of the marketplace.

States with special opt-out or waiver rules include:

• Ohio and Wisconsin: Written agreements can transfer liability to the seller
• Maryland: Waivers may apply for specific types of sellers (e.g., telecom companies).

If you enter into written agreements, document everything. Save a signed copy for every marketplace and update when laws change. Not all states offer this opt-out. For most, the rule is simple: the facilitator collects, files, and remits sales tax on your behalf.

Minimizing Liability and Compliance Errors

Marketplace facilitators can be held liable if tax isn’t collected due to errors, such as miscategorizing a product, using the wrong location, or failing to register in a state. Some states then push liability back to the individual seller.

Ways to reduce risk:

• Communicate clearly with sellers about who is responsible for each step
• Keep products and services categorized correctly in your system
• Stay alert for state rule changes or notices

Many sellers and facilitators find that tech solutions just aren’t enough—they need ongoing expert support to catch problems before they become audits. That’s why 1stopVAT combines smart software with real compliance experts on call.

Sales Tax Compliance Solutions with 1stopVAT

US Sales Tax Compliance for marketplace facilitators and remote sellers is complicated—but it doesn’t have to wreck your schedules or sleep. At 1stopVAT, we bring years of hands-on experience helping facilitators and remote sellers stay compliant in all 45+ US sales tax states.

Our services include:

• Economic nexus monitoring and alerts
• End-to-end tax registration and filing
• Marketplace-specific returns and support for opt-out agreements
• Help with remote supply and cross-state sales

We know you want to run your business, not chase receipts and rules. That’s why 1stopVAT does the heavy lifting—you stay focused on growth, and we ensure you meet every sales tax registration, collection, and remittance rule.

Final Remarks

Staying compliant with US Sales Tax as a marketplace facilitator or remote seller requires more than basic knowledge—it means understanding where your sales count, how to register, and exactly what to report, all while keeping up with changing rules. Failing to follow any sales tax registration or collection rule can expose your business to audits and penalties.

Don’t risk expensive mistakes or lost time. Rely on the know-how at 1stopVAT to handle your compliance, registration, and remittance, so you can sell across the US with confidence. Have questions or need help with a remote supply situation? Reach out to 1stopVAT for tailored support today.

Frequently Asked Questions