Effective February 1, 2020, an auctioneer that meets the definition of a marketplace facilitator and meets either of the state’s marketplace nexus thresholds is required to collect and remit North Carolina sales and use tax on marketplace facilitated sales. Per North Carolina’s marketplace nexus legislation, a marketplace facilitator that makes sales, including all marketplace-facilitated sales for all marketplace sellers, sourced to North Carolina for the previous or current calendar year that meets the threshold of either gross sales in excess of $100,000 or 200 or more separate transactions is required to collect and remit sales and use tax. A “marketplace facilitator” is a person that, directly or indirectly and whether through one or more affiliates, does both of the following:
An auctioneer that does not meet the definition of a marketplace facilitator, such as one who does not: make payment processing services available to purchasers for the sale of a marketplace seller’s items; collect the sales price of a marketplace seller’s items; or otherwise process payments, is not acting as a marketplace facilitator.
A marketplace facilitator is required to comply with the same requirements and procedures as all other retailers who are required to be registered to collect and remit North Carolina sales and use tax. An auctioneer that is a marketplace facilitator is not obligated to collect and remit sales and use tax on its marketplace facilitated sales made prior to meeting the threshold.
Note that a marketplace facilitator that makes retail sales and marketplace-facilitated sales and has a physical presence in North Carolina is not required to meet the gross sales in excess of $100,000, or 200 or more separate transaction threshold before being liable to collect North Carolina Sales and Use tax on its retail sales.
North Carolina has published an Auctioneer FAQs document, providing additional guidance to auctioneers. In the FAQs document, the DOR advises that an auctioneer that only calls bids at an event is not required to collect and remit sales tax for the event since they do not meet the definition of a marketplace facilitator. The DOR also provides guidance on whether different types of sales made by auctioneers are subject to sales and use tax. Auctioneers who meet the state’s definition of marketplace facilitator and exceed either of the marketplace nexus thresholds are required to register with the state and file sales tax returns. For more information and additional guidance, visit the state’s Auctioneer FAQs webpage. For additional information on North Carolina’s marketplace nexus legislation, see our news item North Carolina Enacts Marketplace Nexus Legislation. (Important Notice: Auctioneers; Auctioneer FAQs, North Carolina Department of Revenue)