Updated Marketplace Facilitator Laws (2025): What Online Sellers Need to Know

Despite being a prominent ecommerce consideration since 2018, sales tax laws and regulations continue to confound many remote and online sellers. For those selling through marketplaces, knowing their sales tax obligations can be even more daunting. One common question remains: who collects sales tax—me or the platform?

In 2025, marketplace facilitator laws have continued to expand and change in many U.S. states. Sellers who use platforms such as Amazon, Etsy, Walmart Marketplace, or other multi-vendor sites need to understand how these new rules may affect them.

Key Takeaways

• Marketplace facilitator laws have been expanded and clarified in many states in 2025.
• Marketplaces like Amazon, Etsy, Walmart and others are under increasing scrutiny from states regarding sales tax collection and remittance.
• Sellers who sell on marketplaces still have sales tax responsibilities for their own direct sales, B2B transactions, and other sales outside of marketplace coverage.
• Employing an automated, unified sales tax service helps multi-platform sellers stay compliant.

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Quick Refresher: What Is A Marketplace Facilitator?

A marketplace facilitator is any platform that connects buyers and sellers, and which handles the payments or transactions made on that platform.

Common marketplace facilitator platforms

• Amazon
• Etsy
• Walmart Marketplace
• eBay
• Shopify Shop App
• Niche B2B platforms like Faire

What makes a platform a “marketplace facilitator”?

The most accurate way to determine this is to ask your platform directly or visit their FAQ. However, a qualifying platform typically must:

1. Provide an electronic base (website or app) where third-party sellers list or advertise their products.
2. Collect payments from buyers and remit funds to the seller (usually minus fees). The facilitator is the middleman: money passes from the buyer to the facilitator and ends with the seller.

If a site only lists items (like Craigslist) or solely processes payments (like Square), it usually is not considered a marketplace facilitator.

Why States Enacted Marketplace Facilitator Laws

With online retail growth accelerating each year, states faced mounting challenges collecting sales tax from sellers without a physical presence. According to the United States Census Bureau, ecommerce accounted for 16.3% of total retail sales in the second quarter of 2025, a number expected to reach 23% by 2027.

The landmark 2018 Supreme Court case South Dakota v. Wayfairfundamentally changed the game, granting states the ability to collect sales tax from online retailers.

From there, states began passing marketplace facilitator laws to:

• Close the gap between brick-and-mortar and online retailers.
• Simplify compliance by placing collection duties on platforms.
• Increase revenue and reduce enforcement costs.
• Respond to the way most consumers now shop: online.

By shifting collection duties to marketplaces, states streamlined sales tax enforcement.

Marketplace Collection Rule Changes in 2025

Even though most marketplace facilitator laws were established years ago, many states have or plan to expand and clarify marketplace facilitator laws:

• Alaska – Several Alaskan municipalities removed their 200-transaction threshold (effective January 1, 2025). Marketplaces now have economic nexus if statewide gross sales exceed $100,000 in the current or previous year.
• Utah – Utah eliminated its 200-transaction threshold July 1, 2025, in favor of annual gross sales of—you guessed it—greater than $100,000.
• Illinois – Beginning January 1, 2026, Illinois will also remove its 200-transaction threshold, relying solely on a $100,000-in-sales test for nexus.
• Mississippi and Tennessee – Both states expanded facilitator laws to include third-party booking companies for short-term rentals and lodging.
• Services through marketplaces – An increasing number of states now require marketplaces to collect tax on services (not just goods).

When Do You Owe Sales Tax as a Marketplace Seller?

Even if your platform collects sales tax for you, that doesn’t mean you’re off the hook entirely. You may still need to register, collect, and file if:

• You sell directly through your own website or POS system.
• You ship from your own inventory locations.
• You make wholesale or B2B sales outside a marketplace.
• You’ve established economic or physical nexus.

If your marketplace doesn’t handle tax for every jurisdiction, or if you sell across multiple channels, you remain liable for collecting and remitting the correct amount.

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How to Stay Compliant on Multiple Platforms

Managing multi-channel ecommerce can feel a lot like juggling fire. Here’s how to keep your sales tax compliance under control:

• Use unified automation – Choose a tax-automation service that can integrate will all your sales platforms.
• Separate marketplace vs. direct sales – Keep clear records for each source of revenue.
• Track thresholds – Many states are phasing out transaction counts and moving to dollar-based nexus only.
• Save marketplace reports – Keep monthly and annual summaries to assist you in case of an audit.
• Stay alert for rule changes – Many states like to update their policies in January and July.
• Plan for growth – If you plan to expand off-marketplace, ensure you set aside sales tax revenue for easy remittance.

Looking Ahead: What’s Next for Marketplace Facilitators?

Here’s what sellers can expect heading into 2026 and beyond:

• Expanded coverage of services and digital goods – Expect more states to apply facilitator laws to SaaS, gig work, and streaming services.
• Elimination of transaction thresholds – The “200 transaction rule” will continue to disappear. It is likely that all states with sales tax will favor revenue-based nexus standards in the future.
• More state audits for hybrid sellers – With the aid of AI and other technology, states will cross-check marketplace data against self-filed sales tax returns. Expect increased information transparency between states and marketplaces.