North Dakota Enacts Marketplace Nexus Legislation

Effective October 1, 2019, North Dakota has enacted marketplace nexus provisions. Marketplace facilitators without a physical presence in North Dakota are considered retailers subject to North Dakota sales and use tax if they facilitate sales of property or services that are subject to North Dakota sales tax and meet the state’s economic nexus threshold. North Dakota’s economic nexus threshold is gross sales into North Dakota exceeding $100,000 in the previous or current calendar year. A marketplace facilitator exceeding the sales threshold must obtain a sales tax permit and begin collecting tax on sales during the following calendar year or beginning 60 days after the threshold is met, whichever is earlier.

Marketplace facilitators are not required to collect or remit tax on sales made before October 1, 2019. A marketplace facilitator shall be considered the retailer of each sale that it facilitates on its forum for a marketplace seller. A marketplace facilitator must certify to its marketplace sellers that it will collect and remit state and local sales and use tax on sales of tangible personal property or other products or services subject to tax made through the marketplace. A marketplace seller that accepts a marketplace facilitator’s collection certificate in good faith may exclude sales made through the marketplace from the marketplace seller’s return of gross receipts. A marketplace facilitator is not liable for failure to collect and remit sales and use tax if the facilitator demonstrates to the satisfaction of the state that:

  • The marketplace facilitator has a system in place to require the seller to provide accurate information and has made a reasonable effort to obtain accurate information from the seller about a retail transaction;
  • The failure to collect and remit the correct tax was due to reliance upon incorrect or insufficient information provided to the marketplace facilitator by the seller; and
  • The marketplace facilitator and marketplace seller are not affiliated.

If the marketplace facilitator is relieved of liability, the seller and the purchaser are liable for any amount of uncollected, unpaid, or unremitted tax. (S.B. 2338, Laws 2019)

Posted on April 8, 2019