Senate Bill 322 – Marketplace Facilitators
Authored by Sen. Travis Holdman (R-Markle)
This bill provides that a marketplace facilitator is required to collect and remit state sales tax as a retail merchant when it facilitates a retail transaction for sellers on the marketplace facilitator’s marketplace. Specifies circumstances in which a marketplace facilitator or a seller would not be required to collect and remit the state sales tax on the retail sale. (The bill also separately defines an accommodations facilitator for sellers that rent or furnish rooms, lodging or accommodations in Indiana).
Chamber Position: Support
The Latest: Heard on Tuesday in the Tax and Fiscal Policy Committee; held to allow for further discussions and ideas on how to address the related, more hotly debated issues associated with accommodation facilitators.
Chamber Action/Commentary: We testified in support of this bill because it recognizes the administrative and compliance issues that will surface now that online sales are subject to tax following the U.S. Supreme Court decision in Wayfair v. South Dakota in May. Under the new landscape, businesses across the country are becoming obligated to collect state sales tax from their online buyers. This is not easy for them. But nearly all businesses use online platforms such as Amazon, Etsy or some other marketplace to promote their products and facilitate their sales. These third parties are commonly referred to as marketplace facilitators and are in the best position to collect the tax at the point that they bring the seller and the buyer together online.
By collecting the tax at the point of the transaction, the facilitator is doing its customers (the sellers) a favor by helping them fulfill their legal obligation to collect the tax from the ultimate buyer. So, it is both logical and practical for the facilitators to be required to collect the tax, instead of all the individual businesses. The law does protect everyone from innocent mistakes. An added benefit to the state of Indiana and the Department of Revenue is more thorough and efficient compliance and collection.
Resource: Bill Waltz at (317) 264-6887 or e-mail: [email protected]