Ohio Department of Taxation Explains Marketplace Facilitator Economic Nexus Thresholds

Sales and Use Tax – Substantial Nexus and Marketplace Facilitator, Ohio Dept. of Tax. (11/21).

The Ohio Department of Taxation issued some answers to frequently asked questions (FAQs) pertaining to Ohio’s marketplace facilitator collection and remittance requirements, which were enacted pursuant to 2019 budget legislation that addresses sales and use tax substantial nexus provisions in light of Wayfair and generally requires certain remote sellers and marketplace facilitators meeting specified economic nexus standards (i.e., those with and/or facilitating greater than $100,000 in gross receipts or engaging in 200 or more separate transactions into Ohio in the current or preceding calendar year) to collect and remit state sales tax on their in-state sales.

Among other items, the FAQs explain that effective August 1, 2019, out-of-state sellers with substantial nexus must collect and remit Ohio tax on all sales of taxable products and services made from sources other than a marketplace facilitator into Ohio unless a fully completed exemption certificate is received. Additionally, effective September 1, 2019, marketplace facilitators are liable to collect and remit Ohio sales tax on sales of taxable products and services made on behalf of marketplace sellers.

Moreover, the FAQs clarify that “only those sales which are considered retail sales are included in the economic nexus threshold calculation.” For example, according to the FAQs, only those enumerated services in Ohio Rev. Code section 5739.01(B)(3) would be utilized when determining Ohio’s economic nexus threshold. In this respect, the FAQs provide that “retail sales” do not include “sales for resale.”

Source Deloitte

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