Navigating Marketplace Facilitator Laws for Tech Sellers

As digital commerce grows, so does the complexity of sales tax compliance—especially for tech sellers using online platforms. If you sell software, digital goods, or tech subscriptions through Amazon, Etsy, Shopify, or other third-party platforms, you’ve likely come across the term “Marketplace Facilitator Laws.”

These laws are transforming how sales tax is collected and reported—and understanding them is essential for staying compliant and avoiding duplicate tax filings or costly mistakes.

In this article, we’ll break down how Marketplace Facilitator Laws impact tech sellers, and how Manage My Sales Tax can help your business navigate this evolving landscape with confidence.

What Are Marketplace Facilitator Laws?

Marketplace Facilitator Laws require the platform (the facilitator)—not the individual seller—to collect and remit sales tax on behalf of sellers using their platform.

In short:

• You sell your software or tech tools on Amazon or Shopify.

• The platform is considered the “marketplace facilitator.”

• That platform is responsible for charging and remitting sales tax to the relevant state, not you as the seller.

These laws are designed to simplify compliance and improve state tax collection—but for businesses, they introduce new challenges in reporting, recordkeeping, and strategy.

Why It Matters for Tech Sellers

Marketplace facilitator laws may seem like a relief—after all, someone else is collecting tax for you. But here’s why you still need to pay attention:

1. You’re Still Responsible for Reporting

Even if the platform collects tax, many states still require sellers to file returns reporting the sales that were made through a facilitator—and noting which were taxed by the platform.

2. Not All Sales Are Covered

Some states have thresholds—only sales over a certain amount are covered by facilitator collection. Also, sales through your own website or other channels may not be included.

3. Classification of Products Still Matters

Is your product a taxable digital good in some states but not others? Marketplace facilitators often apply generic tax rules, which may not reflect the nuance of your offering (e.g., API access vs. downloadable software vs. cloud-based tools).

4. Double Taxation or Gaps Can Occur

If you’re not careful, you could:

• Accidentally collect tax on top of what the marketplace already collected, or

• Miss out on collecting tax altogether in states where you need to collect it yourself.

How Marketplace Facilitator Laws Vary by State

• Over 45 U.S. states have enacted these laws, but each one defines:

  
  

  • What qualifies as a marketplace

  • What products and services are included

  • What reporting responsibilities sellers retain

Some states treat digital goods and software differently, meaning your obligations may change based on what you sell and where your buyers are.

For example:

• Washington State: Requires sellers to file zero-dollar returns even if a facilitator collects all tax.

• Texas: Excludes certain B2B SaaS transactions from facilitator collection rules.

• New York: Marketplace facilitators must collect on all taxable sales, including digital content.

Tech-Specific Issues to Watch For

• Bundled Sales: Are you offering a package that includes downloadable software, access to a cloud dashboard, and technical support? The way this is categorized impacts your taxability.

• Subscription Models: Monthly digital subscriptions can fall into a gray area—some platforms may fail to apply the right rate or collect at all.

• Multiple Channels: If you sell through your website and a marketplace, you may have to register and file separately for non-facilitated sales.

Navigating Marketplace Facilitator Laws for Tech Sellers

For tech sellers, navigating marketplace facilitator laws for tech sellers is essential to understanding who is responsible for collecting and remitting sales tax on digital and physical goods. These laws can shift tax obligations to the marketplace, but sellers still need to stay informed to maintain compliance and avoid penalties.

How Manage My Sales Tax Helps Tech Sellers Stay Compliant

At Manage My Sales Tax, we work exclusively with tech and digital service businesses. Our team understands the complexity of selling across platforms and navigating facilitator laws—especially when it comes to software, digital tools, subscriptions, and SaaS models.

Here’s how we help:

• Sales Channel Mapping – We break down which sales are covered by facilitator laws and which aren’t.

• Sales Tax Filing & Reporting – We help you file correctly in each state, including zero-dollar returns.

• Platform-Specific Support – We review how Shopify, Amazon, or other platforms are handling your tax, and help you spot gaps.

• Audit Defense & Risk Reduction – If states question your reporting or sales records, we’ve got your back.

With us, you get proactive, customized support designed to keep your business tax-compliant without unnecessary overpayments or fines.

Sell Smarter, Not Riskier

Marketplace Facilitator Laws were meant to simplify compliance—but for tech businesses, the rules often add a layer of confusion. With Manage My Sales Tax, you gain clarity, confidence, and expert support tailored to your industry.

👉 Visit our website to get expert guidance on marketplace tax compliance and schedule a free consultation.

Take control of your sales tax compliance!

Book your FREE consultation today—let’s get started!

👉 https://lisajonescpa.youcanbook.me/