Vermont Enacts Marketplace Nexus Legislation

Vermont has enacted new requirements for marketplace facilitators, effective June 1, 2019. A marketplace facilitator that has facilitated sales for marketplace sellers of at least $100,000 or 200 individual sales transactions, during the preceding 12-month period, must register and collect and remit sales tax on behalf of its sellers.

Marketplace sellers are not required to collect and remit sales tax on retail sales made through a marketplace into Vermont that has certified to the seller that it is collecting and remitting.

A “marketplace facilitator” is defined as a person who contracts with marketplace sellers to facilitate for consideration, regardless of whether deducted as fees from the transaction, the sale of the marketplace sellers products through a physical or electronic marketplace operated by the person and engages directly or indirectly through one or more affiliated persons, in any of the following:

• transmitting or otherwise communicating the offer or acceptance between purchasers and marketplace sellers;
• owning or operating the infrastructure, electronic or physical, or technology that brings purchasers and marketplace sellers together;
• providing a virtual currency that purchasers are allowed or required to use to purchase products from marketplace sellers; or
• software development or research and development activities related to any of the activities described above

A marketplace facilitator may also engage in any of the following activities with respect to the marketplace sellers’ products:

• payment processing services;
• fulfillment or storage services;
• listing products for sale;
• setting prices;
• branding sales as those of the marketplace facilitator;
• order taking;
• advertising or promotion; or
• providing customer service or accepting or assisting with returns or exchanges

A marketplace facilitator must certify to its marketplace sellers that they will collect and remit tax on taxable sales made through its marketplace. A marketplace seller that accepts the certification from the marketplace facilitator in good faith does not have a collection obligation on marketplace sales. However, an individual seller must include sales made through a marketplace towards its individual threshold if sales are made through other avenues than a marketplace.

A marketplace facilitator can be relieved of liability if it can demonstrate to the state that a failure to collect the correct amount of tax was due to incorrect information provided by the marketplace seller. (H.B. 536, Laws 2019)