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Marketplace Facilitator Laws: What Sellers Still Report and How to Record Marketplace Sales Tax
Last updated: October 16, 2026 · Independent guide · We do not sell rankings or coverage.
Under marketplace facilitator laws, the platform (Amazon, Walmart, eBay, Etsy and similar) calculates, collects and remits sales tax on sales it facilitates for third-party sellers, and the state treats the platform as the retailer for that tax. You as the seller are usually relieved of collecting tax on those orders, but you are not always relieved of registering, filing or counting those sales. Several states still want facilitated sales on your return as gross sales with a deduction, most count them toward your economic nexus threshold, and your ledger needs a way to record tax the marketplace charged and withheld without inflating revenue or leaving a phantom liability.
The rule in brief
- Who it applies to: marketplaces that facilitate sales for third parties, and the sellers who use them, in all 45 states that impose a statewide sales tax (BDO, July 14, 2021).
- Who collects: the facilitator, once it is registered or over the state’s facilitator threshold. Amazon says it is responsible to “calculate, collect, remit, and refund state sales tax” in covered states, but some local taxes fall outside the laws (Amazon, no date shown).
- What you still do: collect and file on your own direct sales, track nexus using total sales (marketplace included in most states), and, if you are registered, report facilitated sales the way each state prescribes.
- Key date: the laws followed South Dakota v. Wayfair, decided June 21, 2018. Missouri, the last state to adopt these rules, applied its facilitator requirement from January 1, 2023 (BDO).
- Official sources: each state revenue department. The Streamlined Sales Tax Governing Board keeps a chart of facilitator rules for member and some nonmember states (updated September 26, 2025).
We checked every rule on this page against the cited state or vendor source on October 16, 2026.
What the rule requires of the marketplace and of you
The facilitator becomes the party responsible for the tax on facilitated orders. Walmart’s seller policy states that “Walmart.com is a Marketplace Facilitator and the taxpayer and seller of record” for taxes covered by facilitator laws, and that it collects and remits them (Walmart Marketplace, last updated December 11, 2025). The same policy makes you responsible for assigning accurate product tax codes, says you may be liable to Walmart for incorrect designations, and has Walmart report monthly on taxes outside the facilitator laws that it collects for you.
Any sale outside the marketplace (your own website, wholesale, phone orders) remains yours to tax and report, and a registered seller’s return may still ask for facilitated sales.
How states want facilitated sales on your return
Some states want facilitated sales in gross sales with a deduction, some want them shown as nontaxable, and some want them left off entirely.
| State | How a registered seller reports facilitated sales | Source |
|---|---|---|
| California | Include in total sales, then deduct as “other” (for sales on and after October 1, 2019) | CDTFA Special Notice L-700, August 2019 |
| Texas | Include in item one, Total Texas Sales; exclude from item two, Taxable Sales, when the provider has certified it will collect | Texas Comptroller FAQ, last modified January 30, 2025 |
| Washington | Report gross Washington sales, marketplace included, under Retailing B&O; deduct them from retail sales tax as “Gross Sales Collected by Facilitator”; leave them off the local sales page | Washington DOR, no date shown |
| New York | Include in gross sales and services and report as nontaxable sales | NY Department of Taxation and Finance, updated January 15, 2026 |
| Missouri | Report on a separate line of the vendor’s use tax return using item code 0010 | Missouri DOR FAQ, no date shown |
| Tennessee | Leave facilitated sales out of gross sales; report only your own off-platform sales | Tennessee DOR MS-3, October 20, 2021 |
Getting the method wrong rarely changes the tax due, but it leaves your gross sales out of line with what the state expects. Washington is the clearest case where the gross figure matters for money: B&O tax is a gross receipts tax, so your marketplace sales are still taxable to you under Retailing B&O even though the facilitator handles retail sales tax.
Economic nexus: marketplace sales usually count
Most states measure your threshold on all sales into the state, so marketplace volume can push you over it. A few exclude sales on which a facilitator collected.
| State | Seller threshold | Marketplace sales counted? |
|---|---|---|
| California | Over $500,000 in the preceding or current calendar year | Yes, plus sales by related persons (CDTFA tax guide, no date shown) |
| Washington | More than $100,000 in combined gross receipts in the current or prior year | Yes, and exempt sales count too (Washington DOR) |
| Missouri | $100,000 | Yes, all sales to Missouri customers (Missouri DOR) |
| Texas | $500,000 safe harbor for remote sellers | Yes, “including marketplace sales” (Texas Comptroller) |
| Pennsylvania | $100,000 of gross sales in the prior calendar year | Only sales through a facilitator that does not collect for you (Pennsylvania DOR, no date shown) |
Crossing a threshold does not always mean you must register. California and Missouri let a seller whose sales are all facilitated stay unregistered, but both require registration once you also make direct sales and you are over the threshold. Physical presence is a separate trigger: inventory you own sitting in a fulfillment center or 3PL warehouse in a state can create nexus there regardless of sales volume, and California lists physical presence as a reason a marketplace seller must register (CDTFA tax guide).
Who is exempt from filing, and who is not
You are most likely exempt from registering in a state when you have no physical presence there, sell only through registered facilitators, and the state says marketplace-only sellers need not register. Missouri says plainly that you “do not have to register, collect or remit vendor’s use tax if you are selling through a marketplace facilitator only.” Texas lets a remote seller skip the permit if it has accepted a facilitator’s certification in good faith.
The exemption does not reach a seller based in the state. Texas says a Texas seller has physical presence and “must have an active sales and use tax permit” even if it sells only through a marketplace. It also does not reach taxes outside the facilitator law, such as the local taxes Amazon excludes in some states, or non-facilitator taxes Walmart reports back to you monthly. Delaware, Montana, New Hampshire and Oregon have no general sales tax, so the question does not arise there.
On facilitated sales, the marketplace runs the buyer’s exemption: Amazon’s Tax Exemption Program enrolls qualifying buyers through Amazon for purchases from Amazon and participating third-party sellers (Amazon ATEP help page, no date shown). For your direct and wholesale sales you still need your own resale and exemption certificates on file, which our guide to exemption certificate management software covers.
Deadlines and penalties
Filing frequency is set by each state when you register, and a registered seller generally has to file every period even when the facilitator collected all of the tax. TaxJar, which sells filing software, notes that marketplaces do not file returns for you and many states still require a return, even a $0 return (TaxJar support, last updated February 11, 2025).
Missing a zero return costs real money in some states. Texas adds a $50 penalty for each late report, a 5% penalty on tax paid 1 to 30 days late, 10% after 30 days, and another 10% after a Notice of Tax Due, with interest from the 61st day after the due date (Texas Comptroller, page last modified December 22, 2021).
Facilitators also run on deadlines that feed your close. Washington requires a facilitator to send each seller a monthly sales report within 15 days after month end. New York requires a provider to give each seller Form ST-150, the Marketplace Provider Certificate of Collection, within 90 days of the sales it facilitates unless it has a publicly available agreement stating it will collect.
Records you must keep
- Proof the facilitator is responsible. California asks for an agreement or other evidence that the facilitator is registered, plus its permit or account number, which you can verify on the CDTFA site. If CDTFA can confirm the facilitator collected and paid, it will not hold you liable for that tax.
- Collection certificates. Texas certifications and New York ST-150s, or the published marketplace agreement that replaces them.
- Sales detail by state. Texas expects remote sellers to keep records of all marketplace sales for at least four years. Keep the marketplace tax reports and settlement files by ship-to state, gross sales, tax charged and tax withheld.
- Nexus workpapers. A monthly schedule of total sales by state and channel, showing which threshold rule each state applies.
How to record marketplace payouts with tax withheld
A marketplace settlement shows the tax charged to the buyer and then a matching deduction for the tax the facilitator keeps. A2X, which sells settlement accounting software, describes Amazon’s “MarketplaceFacilitatorTax-Principal” and “MarketplaceFacilitatorTax-Shipping” lines, which offset the item and shipping tax so the net effect on the settlement is zero, and recommends mapping them to a dedicated account (A2X support, July 20, 2023).
Because the facilitator is the taxpayer, that tax is never your liability or your revenue. If you elect under ASC 606-10-32-2A to exclude sales taxes from the transaction price, they stay out of revenue (Deloitte DART, no date shown; Deloitte is an audit and advisory firm). Route both lines through a clearing account so the payout ties to the settlement and the account nets to zero.
Illustration (constructed figures): a monthly Amazon settlement shows $50,000.00 of product sales into facilitator states, $3,400.00 of tax charged, $3,400.00 of facilitator tax withheld and $7,500.00 of fees, for a $42,500.00 deposit.
| Account | Debit | Credit | Note |
|---|---|---|---|
| Cash | $42,500.00 | Net deposit | |
| Marketplace Selling Fees | $7,500.00 | Referral and fulfillment fees | |
| Marketplace Facilitator Tax Clearing | $3,400.00 | Tax withheld by Amazon | |
| Sales Revenue | $50,000.00 | Gross product sales | |
| Marketplace Facilitator Tax Clearing | $3,400.00 | Tax charged to buyers; account nets to zero |
Two shortcuts cause most problems. Crediting the $3,400.00 to Sales Tax Payable leaves a liability that you never pay, so the balance grows every month and stops tying to any return. Crediting it to revenue overstates sales and then shows the withholding as an expense. If your own website also makes taxable Texas sales of $10,000.00 at an illustrative 8.25% rate, that $825.00 does belong in Sales Tax Payable (Texas) until you remit it. On the Texas return, Total Texas Sales would include both the Texas marketplace orders and the $10,000.00, while Taxable Sales would show only the $10,000.00. Our Amazon seller accounting guide works through reserves, refunds and inventory in a full settlement.
What to set up in your systems
- Channel and ship-to state on every sale. Your nexus schedule and returns both depend on sales by state and by channel, so import marketplace orders at state level, not as one summarized deposit.
- Separate accounts. One facilitator tax clearing account per marketplace, and Sales Tax Payable sub-accounts by state for tax you collect yourself.
- A state reporting map. For each registered state, record whether facilitated sales go in gross with a deduction, as nontaxable, on a separate line, or not at all, using the table above as a starting point.
- Monthly nexus check. Compare rolling totals against each state’s threshold and rule for counting marketplace sales.
- Correct product tax codes. Walmart calculates tax from the codes you assign, and you can be liable for errors.
Software can carry much of this. A2X posts Amazon settlements to your ledger and lets you map the facilitator tax lines to their own account. TaxJar’s state reports include a section for marketplace sales, and its AutoFile service files from its Expected Sales Tax Report, which accounts for tax supported marketplaces have already remitted (TaxJar support). Neither decides your registration obligations for you. For a wider look at tax engines, see our guide to tax automation in accounting software.
How we researched this
We read the pages that rank for this term, mostly vendor facilitator law tables and single-state pages, none of which shows the ledger entries. We took each rule from state revenue departments, the Streamlined Sales Tax Governing Board, and Amazon’s and Walmart’s seller terms, and used vendor documentation only for software behavior. All sources were checked on October 16, 2026. This guide is general information, not tax advice for your company.
Related guides
- Economic Nexus Thresholds by State (2026 Table)
- Avalara NetSuite Integration: Setup and Common Errors
- Shopify Accounting: Payouts, Fees, Gift Cards and COGS
Frequently asked questions
Do I have to file sales tax returns if Amazon collects the tax?
It depends on the state and on whether you are registered. A remote seller with only facilitated sales often does not need to register in states such as California and Missouri. If you are registered, you generally keep filing every period, even when the return shows no tax due.
Do marketplace sales count toward economic nexus?
In most states, yes. California, Washington, Missouri and Texas all count them toward the seller’s threshold. Pennsylvania counts only sales through a facilitator that does not collect for you.
Do I report marketplace sales as gross sales on my return?
California, Texas and Washington want them in total or gross sales with a deduction or exclusion from taxable sales. New York wants them in gross sales as nontaxable. Tennessee wants them left out of gross sales entirely.
Is marketplace facilitator tax income or an expense?
Neither. The tax charged to the buyer and the matching amount the marketplace withholds should pass through a clearing account that nets to zero, so revenue and fees show only your own amounts.
Why does my Sales Tax Payable keep growing when Amazon pays the tax?
The tax charged on facilitated orders is probably being credited to Sales Tax Payable with no matching debit. Move those amounts to a facilitator tax clearing account and post a one-time correcting entry to clear the accumulated balance.
Sources
- South Dakota v. Wayfair, Inc., No. 17-494, decided June 21, 2018 (Cornell LII). law.cornell.edu
- BDO, Missouri: Final State to Enact Sales Tax Economic Nexus and Marketplace Legislation, July 14, 2021. bdo.com
- Streamlined Sales Tax Governing Board, Marketplace Facilitator State Guidance, updated September 26, 2025. streamlinedsalestax.org
- California Department of Tax and Fee Administration, Special Notice L-700, August 2019. cdtfa.ca.gov
- California Department of Tax and Fee Administration, Tax Guide for Marketplace Facilitator Act, no date shown. cdtfa.ca.gov
- Texas Comptroller, Remote Sellers and Marketplace Frequently Asked Questions, last modified January 30, 2025. comptroller.texas.gov
- Texas Comptroller, Penalties, page last modified December 22, 2021. comptroller.texas.gov
- Washington Department of Revenue, Marketplace sellers, no date shown. dor.wa.gov
- New York State Department of Taxation and Finance, Sales tax requirements for marketplace providers, updated January 15, 2026. tax.ny.gov
- Missouri Department of Revenue, Remote Seller and Marketplace Facilitator FAQs, no date shown. dor.mo.gov
- Tennessee Department of Revenue, MS-3 How Marketplace Sellers Should Report Their Sales, October 20, 2021. revenue.support.tn.gov
- Pennsylvania Department of Revenue, Online Retailers Selling Goods and Services to Pennsylvania Customers, no date shown. pa.gov
- Amazon, Marketplace Tax Collection, no date shown. amazon.com
- Amazon, Amazon Tax Exemption Program (ATEP), no date shown. amazon.com
- Walmart Marketplace, Tax collection and remittance policy addendum, last updated December 11, 2025. marketplacelearn.walmart.com
- Deloitte DART, Roadmap: Revenue Recognition, 6.7 Sales Taxes and Similar Taxes Collected From Customers (quotes ASC 606-10-32-2A), no date shown. dart.deloitte.com
- A2X (sells settlement software), What is marketplace facilitator tax and how do I account for it, July 20, 2023. support.a2xaccounting.com
- TaxJar (sells sales tax software), Marketplace facilitator FAQ, last updated February 11, 2025. support.taxjar.com
Sherman Hsieh
Independent analysis of enterprise software — ERP, CRM and more
