Third-Party Sales Platforms: Understanding Your Sales Tax Responsibilities

Third-party platforms like Amazon, Walmart Marketplace, Etsy, and even software-as-a-service marketplaces have made it easier for businesses to reach customers nationwide. Whether you're a retailer, tech brand, or distributor, selling through these platforms offers efficiency and scale—but also raises questions about sales tax responsibilities.

As more businesses diversify their sales channels, it’s critical to understand how sales tax obligations work when you sell through third-party platforms. Misunderstanding these rules could result in under-collection, penalties, or double-taxation.

What Are Third-Party Sales Platforms?

Third-party sales platforms (also called marketplace facilitators) are services that host and process transactions on behalf of sellers.

These platforms typically handle:

• Listing and showcasing your products/services

• Processing payments

• Handling shipping (in some cases)

• Managing returns and customer service

While these services simplify operations, they don’t always take full ownership of your tax responsibilities. That’s where things get complicated.

Marketplace Facilitator Laws: Who Collects the Tax?

Many U.S. states have passed Marketplace Facilitator Laws, which shift the responsibility of collecting and remitting sales tax from the individual seller to the platform itself.

Under these laws, the platform is considered the seller of record for tax purposes, meaning:

• The marketplace must collect and remit sales tax on behalf of the seller for orders placed through their site.

• Sellers are generally not required to collect tax separately for those orders.

However, not all platforms—and not all transactions—fall under this rule. Some states still require sellers to register, report sales, and file returns, even if the platform handles tax remittance.

Common Misconceptions About Marketplace Sales Tax

❌ “I don’t need to register for sales tax anymore.”

Even if a platform collects and remits tax, some states still require registration and periodic reporting of your total sales volume.

❌ “The platform handles all my tax obligations.”

Platforms usually handle only the sales made through their marketplace. If you sell through your own website, wholesale channels, or other methods, you may need to collect and remit sales tax independently.

❌ “I’m safe from audits if I use a third-party platform.”

States can audit sellers directly, especially if they believe you’ve established nexus (a taxable presence) and failed to comply properly.

Sales Tax Responsibilities You May Still Have as a Seller

Even when using third-party platforms, your business might still be responsible for:

• Registering for a sales tax permit in states where you have nexus

• Tracking total sales across all channels to monitor economic thresholds

• Collecting tax on non-marketplace sales (e.g., Shopify, wholesale, invoices)

• Filing tax returns to report exempt or total sales

• Maintaining records and exemption certificates

How Manage My Sales Tax Can Support You

Whether you sell through marketplaces, your website, or both, staying compliant across channels requires a coordinated tax strategy. That’s where we come in.

Manage My Sales Tax specializes in helping businesses manage complex tax obligations across all selling platforms.

Here's what we can do for you:

• Sales Channel Analysis:

  We’ll assess each of your sales channels—including marketplaces, DTC websites, and wholesale—to determine your exact obligations.

• Multi-State Registration:

  If you need to register in multiple states due to economic or physical nexus, we handle the entire process from start to finish.

• Platform Tax Compliance Review:

  We ensure that your marketplace facilitators are collecting tax correctly and that you're not over- or under-reporting.

• Filing and Reporting Support:

  From calculating tax due to preparing and filing state returns, we offer full-service compliance so you can focus on your business.

• Ongoing Advisory:

  As tax laws evolve, we’ll keep you informed and proactive—so you’re never caught off guard by policy changes or audits.

👉 Ready to simplify your multi-channel sales tax compliance?

Visit Manage My Sales Tax and schedule a consultation today.

👉 https://lisajonescpa.youcanbook.me/