Good news for marketplace sellers! The state of Nevada now requires marketplaces to collect sales tax on behalf of sellers on online marketplaces like Amazon and Walmart.
This means that if you sell on a platform like Walmart, then Walmart will collect sales tax from your Nevada buyers on your behalf, and remit it to the state.
But as usual, there are always a few wrinkles here when it comes to eCommerce sales tax.
This post will explain what online sellers need to know about the Nevada marketplace facilitator law, and answer your frequently asked questions.
Overview of the Nevada Marketplace Facilitator Law
Nevada’s marketplace facilitator law states that marketplace facilitators in Nevada must collect sales tax on behalf of third-party sellers in the current or immediately preceding calendar year if they had cumulative gross receipts that exceed $100,000 from retail sales facilitated to Nevada customers; or the marketplace facilitated at least 200 separate retail transactions.
Quick Facts about the Nevada Marketplace Facilitator Law
- Effective date: October 1, 2019
- Threshold: This law requires that marketplace facilitators in Nevada must collect sales tax on behalf of third-party sellers in the current or immediately preceding calendar year if they had cumulative gross receipts that exceed $100,000 from retail sales facilitated to Nevada customers; or the marketplace facilitated at least 200 separate retail transactions. It’s also important to note that a marketplace and the seller can agree (in writing) to have the seller collect tax due if preferred.
- State law information: Read the full text of the Nevada Market Facilitator Law
- Marketplaces that have adopted this law:
Frequently asked Questions about Marketplace Facilitator Laws
What exactly is a marketplace facilitator in Nevada?
Under Nevada law, a Marketplace Facilitator generally includes businesses that facilitate retail sales by providing infrastructure (i.e. listing the product on the Marketplace, communicating offer acceptance of a retail sale, providing the physical or electronic Marketplace, etc.) or support (i.e. customer service, fulfillment or storage services, etc.) for retail sales to occur while also collecting the sales price, processing payments, or receiving compensations from the retail sale.
Online sales platforms like Amazon and Walmart are considered marketplace facilitators under Nevada law.
Does this mean I can stop collecting Nevada sales tax?
It depends. Every business’s sales tax situation is unique to that business.
Let’s look at a couple of common scenarios for businesses who have sales tax nexus in Nevada.
Example #1: You only make sales on online marketplaces.
In this example, you only sell on Amazon and Walmart. Because Amazon and Walmart are both now collecting sales tax from buyers on your behalf, you are not required to collect sales tax from your buyers. (However, you may still be required to file periodic sales tax returns. See “Does this mean I can cancel my Nevada sales tax permit?” below.)
Example #2: You sell on online marketplaces and your own online store and/or brick and mortar store.
In this case, you’d still be required to collect sales tax from buyers who purchase from you through your own online store (for example, via your BigCommerce or Shopify store). And you would still be required to collect sales tax from your brick and mortar customers.
Marketplace facilitator laws only cover marketplaces. The state still requires that merchants collect sales tax from buyers via sales channels where the marketplace facilitator laws do not apply.
Does this mean I can cancel my Nevada sales tax permit?
Nevada has not issued any guidance on this yet. Marketplace only sellers should contact the state to determine if you can cancel your sales tax permit.
But first, a word of caution. We recommend checking directly with the state or a sales tax expert before cancelling your sales tax registration. This is because your business is now on the state of Nevada’s books and potentially on their radar should they decide that you still have sales tax obligations in the state of Nevada.
Final note: It’s important to assess your business before making a decision about cancelling sales tax permits. Are you in a growth stage? Do you plan to expand and think you may have Nevada sales tax collection requirements in the future? Then you may want to hang on to your Nevada sales tax permit rather than cancelling it and going through the administrative hassle of registering again in the future. This business decision is up to you.
Do I still need to file a Nevada sales tax return?
If a Marketplace Seller has presence in Nevada, they are required to register, collect, remit and report the sales tax from all its Nevada sales on a Nevada sales tax return. They will report any direct sales that are not sold through a Marketplace and omit the sales that are reported by the Marketplace Facilitator. If all sales are made through a Marketplace Facilitator, they will file a zero return.
If a Marketplace Seller has NO physical presence in Nevada and ONLY sells through a Marketplace Facilitator that is registered to collect, remit and report the sales tax on the sellers behalf, the Marketplace Seller does not need to register with the Department or file a Nevada sales tax return.
What do I do with any Nevada sales tax I have already collected?
If you have already collected Nevada sales tax from buyers, it is vital that you remit that amount to the state. The only way to get in serious criminal trouble in sales tax is to collect sales tax from buyers on the state’s behalf but keep it in your own pocket.
Let’s say you sell on Amazon and Nevada requires you to file and remit sales tax quarterly. Though Amazon began collecting sales tax on your behalf on October 1, if you have any sales tax in your bank account that you collected from Q2 2019, you will still need to remit that to Nevada’s Department of Taxation or face a penalty.
Does TaxJar handle this for me?
TaxJar AutoFile handles Nevada sales tax automatically
TaxJar AutoFile automatically compiles your sales tax data the way the state of Nevada wants it filed. For example, many states, Nevada included, want sellers to break down their sales tax collected interstate (sales originating in Nevada sent to another state) and intrastate (sales made from Nevada to Nevada.)
If a marketplace has collected sales tax on your behalf, TaxJar reports that directly to the state so that the state is aware you have met your sales tax obligations.
If you currently AutoFile your Nevada sales tax returns, you don’t need to do a thing. It’s handled!
TaxJar Reports give you all the info you need to file manually
If you prefer to file manually, your TaxJar Reports also reflect what the Nevada Department of Taxation wants to see on your tax return.
Also don’t worry that you will double pay. TaxJar accounts for sales tax collected on your behalf, and only shows you the amount you owe to the state out of your pocket.
Further reading on Nevada sales tax and marketplace facilitator laws:
- TaxJar’s Marketplace Facilitator FAQ
- State by State: Marketplace Facilitator Laws Explained
- Nevada Sales Tax Guide for Businesses
Do you have questions or something to say about the Nevada marketplace facilitator law? Start the conversation in the comments!