Nevada Enacts Marketplace Nexus Legislation

Nevada has enacted legislation with marketplace nexus provisions for marketplace facilitators and marketplace referrers. Effective October 1, 2019, marketplace facilitators are required to collect and remit sales tax if either of the following criteria are met in the current or previous calendar year:

• Cumulative gross receipts from retail sales made or facilitated by the marketplace facilitator on its own behalf or on behalf of marketplace sellers to customers in Nevada exceed $100,000; or
• The marketplace facilitator makes or facilitates 200 or more separate retail transactions on its own behalf or on behalf of marketplace sellers to customers in Nevada.

The sales and use tax collection and remittance requirements do not apply if the marketplace facilitator and marketplace seller have entered into a written agreement in which the seller assumes responsibility for the collection and remittance of tax and has obtained a permit or registered to collect and remit tax.

A marketplace facilitator will not be held liable for the payment of any tax attributable to a retail sale made or facilitated on behalf of a marketplace seller who is not an affiliate of the marketplace facilitator if:

• The marketplace facilitator provides satisfactory proof to the Nevada Department of Taxation that it has made a reasonable effort to obtain accurate information from the marketplace seller about the retail sale; and
• The failure was due to incorrect information provided by the marketplace seller.

Under the above circumstances, the marketplace seller or purchaser, as applicable, if liable for the payment of the tax.

Additionally, the Department will not hold a marketplace facilitator liable for the payment of any tax attributable to a retail sale made or facilitated on behalf of a marketplace seller who is not an affiliate of the marketplace facilitator if the marketplace facilitator provides satisfactory proof to the Department that:

• The retail sale was made before January 1, 2021
• The retail sale was made through a marketplace of the marketplace facilitator; and
• The failure to collect tax was due to an error other than an error in sourcing the retail sale.

Under the above circumstances, the relief from liability for the 2019 and 2020 calendar years shall not exceed 5% of the total sales and use tax owed for the calendar year on the cumulative gross receipts of the marketplace facilitator from retail sales made or facilitated by the marketplace facilitator for marketplace sellers to customers in Nevada.

Marketplace facilitators required to collect tax under this legislation are immune from civil liability for claims arising from or related to the overpayment of taxes if the marketplace facilitator acted in good faith and without malicious intent.

Effective October 1, 2019, marketplace referrers are required to collect and remit sales tax or comply with notice and reporting requirements if either of the following criteria are met in the current or previous calendar year:

• Cumulative gross receipts from retail sales to customers in Nevada resulting from referrals from a platform of the referrer exceed $100,000; or
• There are 200 or more separate retail sales transactions involving sales to customers in Nevada resulting from referrals from a platform of the referrer.

The sales and use tax collection and remittance requirements do not apply to a referrer if the referrer:

• Posts a conspicuous notice on each platform of the referrer that includes all of the following:
  • A statement that sales and use tax is due on certain purchases;
  • A statement that the marketplace seller may or may not collect and remit sales and use tax on a purchase;
  • A statement that Nevada requires the purchaser to pay sales or use tax and file a return if tax is not collected at the time of the sale by the marketplace seller;
  • Information informing the purchaser that the notice is provided under the requirements of this legislation; and
  • Instructions for obtaining additional information from the Department regarding whether and how to remit sales and use tax.
• Provides a monthly notice to each marketplace seller to whom the referrer made a referral of a potential customer located in Nevada during the previous calendar year which contains all of the following:
  • A statement that Nevada imposes sales and use tax on retail sales in Nevada;
  • A statement that a marketplace facilitator or other retailer making sales in Nevada must collect and remit sales and use tax; and
  • Instructions for obtaining additional information from the Department regarding the collection and remittance of sales and use tax.
• Provides the Department with periodic reports in an electronic format which contains all of the following:
  • A list of marketplace sellers who received a notice from the referrer;
  • A list of marketplace sellers who collect and remit sales and use tax and that list or advertise the marketplace seller’s products for sale on a platform of the referrer; and
  • An affidavit signed under penalty of perjury from an officer of the referrer affirming that the referrer made reasonable efforts to comply with the notice and reporting requirements.

(A.B. 445)