End Of Year Update: State Internet Sales Tax

December 18, 2019

2019 saw a flurry of activity across the country as states moved to implement Internet sales tax (IST) collection requirements for out of state sellers with no physical presence in the state following the U.S. Supreme Court’s 2018  South Dakota v. Wayfair decision. The trend in 2019 has been for states to impose requirements on online marketplaces like eBay to collect and remit sales tax. Thirty-eight states and the District of Columbia have now enacted so-called “marketplace facilitator” laws, though several states’ laws do not take effect until 2020. For the full list of states that eBay is currently collecting sales tax and those scheduled for future implementation, please visit eBay’s Customer Service site.

Several states have been active this fall considering new IST legislation. See below for an overview of recent activities:

  • Illinois

The Legislature passed legislation on November 20, intended to make modifications to the remote seller and marketplace facilitator statutes enacted earlier this year as part of the budget. Though this bill is pending final approval by Governor Pritzker, the underlying tax collection requirements for marketplace facilitators goes into effect January 1, 2020.

  • Kansas

The Governor’s Council on Tax Reform released several policy recommendations on December 3, including requirements for out of state marketplace facilitators to collect and remit tax to the state. The Legislature is expected to take up IST during their 2020 session and is scheduled to convene January 13, 2020.

  • Michigan

On December 12, Governor Whitmer signed a package of legislation establishing marketplace facilitator collection requirements. The package also codified an existing rule mandating the collection of IST from out of state sellers without a physical presence in Michigan. The requirements for marketplace facilitators to collect sales tax in Michigan goes into effect January 1, 2020.

  • Missouri

Several bills to establishing remote seller and marketplace facilitator tax collection requirements have been pre-filed for consideration during the 2020 legislative session. The Legislature is scheduled to convene January 8, 2020.

  • North Carolina

Governor Cooper signed SB 557 on November 8. Among other requirements, the legislation requires marketplace facilitators to collect and remit sales tax to the state beginning February 1, 2020.

We expect 2020 to also feature the states’ further consideration of IST policies, particularly marketplace facilitator collection requirements. As states debate new IST laws or seek to revisit their existing requirements, eBay will continue to advocate for workable tax policies that provide reasonable small business protections and streamline collection and remittance standards across the states to avoid confusion, mistakes, and costly penalties.