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State Internet Sales Tax Update

July 27, 2020

Nearly every state has enacted laws mandating Internet sales tax (IST) collection requirements for certain online businesses following the June 2018 U.S. Supreme Court decision in South Dakota v. Wayfair. Only two states (Florida and Missouri) have not imposed tax collection requirements on sellers who meet a set sales threshold into the state. Additionally, all but three states (Florida, Kansas, and Missouri) have enacted laws requiring marketplace facilitators like eBay to collect and remit tax for transactions made on the platform.

Here is a recap of recent state IST-related matters:

  • Louisiana

On June 11, Governor John Bel Edwards (D) signed legislation requiring marketplace facilitators to collect and remit state and local sales and use tax. The law took effect July 1, coinciding with the effective date for another law enacted in 2019 mandating that remote sellers with at least $100,000 in gross sales or 200 or more transactions into the state collect and remit sales and use tax.

  • Mississippi

Mississippi became the 42nd state to enact a marketplace facilitator law when Governor Tate Reeves (R) approved HB 379, on June 30. The law, which took effect a day later on July 1, requires marketplace facilitators to collect and remit taxes on sales through its marketplace if they make more than $250,000 in gross sales into the state in any consecutive twelve month period.

  • Tennessee

Legislation signed by Governor Bill Lee (R) cuts the threshold for out-of-state dealers and marketplace facilitators from $500,000 to $100,000. The move to lower the threshold comes just a few months after Tennessee enacted marketplace facilitator collection requirements starting October 1. The Department of Revenue recently issued notices for out-of-state dealers and marketplace facilitators detailing changes to the state’s tax laws.

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.