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Multistate Tax Commission Offers Amnesty to Online Marketplace Sellers for Limited Time

08.22.2017

Marketplace Fairness Act of 2013Twenty-three states and the District of Columbia are participating in the Multistate Tax Commission voluntary disclosure initiative for online marketplace sellers. Online sellers are defined as businesses that use programs or platforms similar to Amazon FBA (Fulfillment by Amazon). Applications for voluntary disclosure must be received by Tuesday, October 17, 2017.

The commission is offering to provide amnesty to taxpayers that may have past due sales and use tax; income and franchise tax liability; and interest and penalties related to online retail sales activity in the state. In exchange, the taxpayer must agree to:

  • Register as a seller or retailer with the state
  • Collect, report and remit sales and use tax
  • File returns and pay income/franchise tax, if applicable
  • File returns on all taxable retail sales to customers in the state as of the effective date (which can’t be later than December 1, 2017)

Here’s a brief summary of the eligibility criteria taxpayers must meet:

  • Registration, Prior Contact and Payments to Participating States: Taxpayers must not be registered with the state taxing authority, filed returns, paid taxes to, or have any prior contact with the state regarding sales and use tax or income and franchise tax.
  • Nexus: Taxpayers must be an online marketplace seller using a marketplace provider or facilitator for retail sales into the state. Taxpayers must not have nexus-creating contacts in the state, except for the online seller’s inventory stored in a third-party warehouse or fulfillment center located in the state.
  • Application Deadline: Taxpayers must apply electronically at the mtc.gov by Tuesday, October 17.

Participants (as of August 18, 2017) include:

  • Alabama
  • Arkansas
  • Colorado
  • Connecticut
  • District of Columbia
  • Florida
  • Idaho
  • Iowa
  • Kansas
  • Kentucky
  • Louisiana
  • Massachusetts
  • Minnesota
  • Missouri
  • Nebraska
  • New Jersey
  • North Carolina
  • Oklahoma
  • South Dakota
  • Tennessee
  • Texas
  • Utah
  • Vermont
  • Wisconsin

The Multistate Tax Commission provides additional information about the process and state exceptions on its website.

Bernard OttenlipsJackson_Amy - CopyFor help with the online marketplace seller voluntary disclosure initiative, or any other state and local tax issue, please contact Bernie Ottenlips, Principal, State and Local Tax, at 314.687.2375 or bottenlips@bswllc.com, or Amy Jackson, Manager, State and Local Tax, at 314.983.1336 or ajackson@bswllc.com.

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