Georgia Enacts Marketplace Nexus Provisions

Georgia has enacted legislation that requires marketplace facilitators that exceed the state’s economic threshold to collect and remit tax on behalf of their marketplace sellers. Effective April 1, 2020, a marketplace facilitator has collection requirements if:

  • The total value of the sales of all such retail sales, combined across all its marketplace sellers and the marketplace facilitator itself, equals or exceeds $100,000 in aggregate in the previous of current calendar year.

A marketplace facilitator is defined as a person that contracts with a seller to facilitate retail sales on behalf of the seller by directly or indirectly:

  • Providing a service that includes, but is not limited to, promoting, marketing, advertising, taking orders or reservations, providing physical or electronic infrastructure that brings purchasers and marketplace sellers together, and communicating the offer and acceptance between the marketplace facilitator and the purchaser; and
  • Collecting, charging, processing, or otherwise facilitating payment for a retail sale on behalf of a marketplace seller.

Platforms that exclusively process payments for retail sales are excluded from this definition.

Under the legislation, no class action can be brought against a marketplace facilitator on behalf of customers related to an overpayment of sales or use tax collected on facilitated sales. The Georgia Department of Revenue will solely audit a marketplace facilitator for facilitated sales made by marketplace sellers.

A marketplace facilitator can be relieved of liability for failure to collect and remit tax due to insufficient or incorrect information provided by a marketplace seller if the facilitator made a reasonable effort to obtain the correct information. (H.B. 276, Laws 2020, effective April 1, 2020)

Posted on February 14, 2020