Following the closure by most states to grapple with COVID-19, several legislatures have resumed their legislative sessions to consider pressing issues. One issue that continues to be heavily debated in the states is Internet sales tax (IST) collection requirements. Since the U.S. Supreme Court’s decision on South Dakota v. Wayfair in June 2018, 40 states and the District of Columbia have enacted laws requiring marketplace facilitators like eBay to collect and remit tax for transactions made on the platform.
Though a majority of states have enacted IST laws, eBay continues to advocate for workable tax policies that provide reasonable small business protections and streamline collecting and remitting standards across the states to avoid confusion, mistakes, and costly penalties. See below for recent IST activities in the states:
Kansas is one of the few states that has not passed a marketplace facilitator bill. This year, two measures were introduced – one version contained was more business-friendly and language from the NCSL model bill (HB 2513) and another was being pushed by the Kansas Department of Revenue (HB 2657). Ultimately, neither bill advanced this year as the legislature agenda and calendar was impacted by the COVID-19 response.
The Legislature was also unable to pass legislation establishing a small seller safe harbor. Under rules adopted last year by the Department, out-of-state sellers are required to collect and remit tax regardless of how many sales they make into the state. Kansas is the only state that has not adopted a sales threshold triggering tax collection requirements.
A marketplace facilitator bill, SB 138, continues to make its way through the legislative process. If enacted, the requirement for marketplace facilitators to collect and remit state and local sales and use tax would take effect July 1, 2020. The bill is expected to pass before the Legislature’s scheduled June 1 adjournment.
The Legislature adjourned May 15 without passing a bill to require remote sellers and marketplace facilitators to collect and remit sales and use tax. Several bills were considered throughout the session, and while there was general agreement in the Legislature around the principles in the bill, disagreement over other tax-related provisions led to its demise. Missouri is one of only two states with a sales tax that has not enacted IST legislation (Florida is the other state).
On April 1, Governor Bill Lee (R) signed SB 2182, a marketplace facilitator bill. The bill is modeled on legislation crafted by the National Conference of State Legislatures (NCSL) intended to incorporate best practices around the adoption of marketplace facilitator tax collection requirements. The bill takes effect October 1, 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.