Skip to main content

Important!

Due to the pandemic, our offices are closed to the public. Please visit our Contact page for support options.

COVID-19 business relief is available. El alivio comercial de COVID-19 está disponible.

Home
  • Laws & rules
  • Careers
  • Contact
  • About
  • Log in

Search Google Appliance

  • Home
  • Open a business
    • Get started
    • Apply for a license
    • Plan for taxes
  • Manage a business
    • Run
    • Grow
    • Close
  • Taxes & rates
    • Sales & use tax rates
    • Tax incentives
    • Business & occupation tax
    • Retail sales tax
    • Use tax
    • Property tax
    • Other taxes
    • Income tax
  • File & pay taxes
    • Filing frequencies & due dates
    • File or amend my return
    • Report no business activity
    • Late filing
    • Reviews and appeals
    • Apply for a tax refund
  • Education
    • Industry guides
    • Events & workshops
    • Watch a video
    • Audits
  • Forms & publications
    • Forms by name
    • Forms by subject
    • Publications by name
    • Publications by subject
Home / Find taxes & rates / Retail sales tax / Marketplace Fairness - leveling the playing field / Marketplace facilitators
Print

Marketplace facilitators

Marketplace facilitator definition

A marketplace facilitator is a business that does the following three activities: (RCW 82.08.010(15)):

1. Contracts with sellers to facilitate the sale of a marketplace seller’s product through a marketplace for consideration.

2. Engages, directly or indirectly, in transmitting or otherwise communicating the offer or acceptance between the buyer and seller. This does not include merely advertising.

3. Does any of the following activities, directly or indirectly, with respect to the seller's products:

  • Payment processing services.
  • Fulfillment or storage services.
  • Listing products for sale.
  • Setting prices.
  • Branding sales as those of the marketplace facilitator.
  • Taking orders.
  • Providing customer service.
  • Accepting or assisting with returns or exchanges.

If you have questions about whether you qualify as a marketplace facilitator, you may request a binding tax ruling.


Lodging exception

A business is not a marketplace facilitator if they:

  • Provide travel agency services or operate a marketplace providing travel agency services.
  • Enable consumers to purchase lodging in a hotel or similar facility, for a period less than 30 days. The lodging provided cannot be a home, apartment, cabin, or other residential dwelling.


Registration requirements

Marketplace facilitators making sales to Washington consumers (including sales made on behalf of marketplace sellers) are required to register if they:

  • Have more than $100,000 in combined gross receipts sourced or attributed to Washington.
  • Have physical presence nexus.
  • Have marketplace sellers with physical presence in Washington.
  • Are organized or commercially domiciled in Washington.


Monthly report to marketplace sellers

Beginning July 1, 2019, marketplace facilitators must provide each of their marketplace sellers with access to information regarding gross Washington sales made on their behalf during the previous month. Facilitators must send this report to sellers by the 15th of each month.

If you do not provide the required notice to sellers by the due date, you will not be eligible for liability relief.


Liability relief for marketplace facilitators

There are two types of liability relief for marketplace facilitators (RCW 82.08.0531).

Type 1: Liability relief—incorrect collection amount

A marketplace facilitator is relieved of liability to the extent of the error for not collecting the correct amount of tax only if they meet all of the following criteria:

  • Fully comply with the monthly report requirement.
  • Can show that the error was due to incorrect information given to the facilitator by the seller.
  • Are not affiliated with the seller.

Note: If a facilitator is relieved of liability, the marketplace seller is solely liable for the amount of uncollected tax.

Type 2: Liability relief—failure to collect tax on taxable sales

A marketplace facilitator is provided some liability relief for not collecting tax on taxable sales through their marketplace only if they meet all of the following criteria:

  • Fully comply with the monthly report requirement.
  • Make the taxable retail sale solely as an agent of a marketplace seller.
  • Are not affiliated with the marketplace seller.
  • Can show that the error was not a sourcing error under RCW 82.32.730.

Calendar year

Type 2 liability relief amounts

2018

Relief cannot exceed 10% of the total tax due on facilitated sales into Washington during 2018.

2019

Relief cannot exceed 5% of the total tax due on facilitated sales into Washington during 2019.

2020 and after

Relief is no longer available


Reporting

You should report sales/use tax collected on behalf of marketplace sellers using our secure online portal My DOR.

  1. Report your gross Washington retail sales under Retailing B&O.
  2. On the Deduction list, select Other, and enter your marketplace sellers’ total Washington sales.
  3. In the Explanation field, enter Third-Party Sales.
  4. Report your gross Washington retail sales on behalf of marketplace sellers under State Sales and Use.
  5. On the Local Sales page, enter the sales by location.

Note: Sales tax is calculated based on the location where the sale is sourced or delivered. Use the department’s sales and use tax tools to calculate the correct rate. To determine whether a product is subject to Washington sales tax use the taxability matrix.


Reporting commissions

Marketplace facilitators generally earn commissions from marketplace sellers when facilitating a sale. If a marketplace facilitator has economic nexus with Washington, its commission income is subject to B&O tax under the Service and Other Activities classification for facilitated sales that are delivered or sourced to Washington.

For more information, see Apportionment.


Common sales tax exemptions

Common retail sales and use tax exemptions include:

  • Food.
  • Prescription drugs.
  • Sales to Indians or Indian Tribes in their Indian country.
    • See the Indian tax guide.

See our retail sales and use tax exemption webpage for a more extensive list of exemptions.


Questions

Call 360-704-5900 or email DORMarketplaceFairness@dor.wa.gov.

More information

Marketplace Fairness

  • Marketplace seller
  • Remote seller
  • Consumer

Physical presence nexus

Bill implementation timeline: Substitute Senate Bill (SSB) 5581

Retail sales and use tax exemptions

Sales and use tax tools

List of other state thresholds

Penalties

More information

Marketplace Fairness

  • Marketplace seller
  • Remote seller
  • Consumer

Physical presence nexus

Bill implementation timeline: Substitute Senate Bill (SSB) 5581

Retail sales and use tax exemptions

Sales and use tax tools

List of other state thresholds

Penalties

Laws & rules | Careers | Contact | About

Home

About

Careers

Contact

Help us improve!

Join our mailing lists

Laws & rules

News releases

Statistics & reports

 

Open a business

Get started

Apply for a license

Plan for taxes

Manage a business

Run

Grow

Close

 

Taxes & rates

Sales & use tax rates

Tax incentives

Business & occupation tax

Retail sales tax

Use tax

Property tax

Other taxes

Income tax

File & pay taxes

Filing frequencies & due dates

File or amend my return

Report no business activity

Late filing

Reviews and appeals

Apply for a tax refund

Education

Industry guides

Events and workshops

Watch a video

Audits

Forms & publications

Forms by name

Forms by subject

Publications by name

Publications by subject

  • Department of Revenue Facebook page
  • Department of Revenue Twitter feed
  • Department of Revenue LinkedIn page.
  • Department of Revenue YouTube channel

Español | Русский | 한글 | Tagalog | Tiéng Viét | 漢語

  Subscribe to receive notifications | Taxpayer Rights and Responsibilities 
Your Privacy | Accessibility | DOR Staff only | © 2017 WASHINGTON STATE DEPARTMENT OF REVENUE AND ITS LICENSORS. ALL RIGHTS RESERVED.
Access Washington