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Marketplace Facilitator Sales Tax Collection

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GunBroker.com will update this document as new information is available. Check back regularly.

Last Update: December 30, 2020

Since the Wayfair Supreme Court decision, states have been allowed to force sellers to collect sales tax for items sold into a state even if the seller has no physical presence in that state. Additionally, some states have enacted so called Marketplace Facilitator laws in an effort to force marketplaces that perform certain functions to collect sales tax on behalf of the marketplace’s sellers. Beginning January 1, 2021, GunBroker.com will be collecting and remitting sales tax on all sales by all sellers who sell items into certain states.

The GunBroker.com MPF States

Starting on January 1, 2021, GunBroker.com will collect and remit sales tax on behalf of all sellers for sales in which the item is sold into the following states:

  • Georgia – GA
  • Iowa – IA
  • Indiana – IN
  • Kentucky – KY
  • Maine – ME
  • Nebraska – NE
  • New Jersey – NJ
  • Nevada – NV

As GunBroker.com works to implement tax collection and remittance for all relevant states, the list of states for which we carry out the process described below will increase and/or change.  We will strive to notify sellers of the changes being made to the list of states above as they occur.  As used in this document, the term “GunBroker.com MPF States” means all the states listed above, as updated on this webpage from time to time.

What is a Marketplace Facilitator?

Each state has its own definition of a Marketplace Facilitator, but in general a Marketplace Facilitator is an entity that provides a forum for sellers to promote their sale of physical property, digital goods, and services whether or not the forum is the actual seller of the items.

What are Marketplace Facilitator Laws?

Marketplace Facilitator laws are a set of state laws that shift the sales tax collection and remittance obligations from the individual seller to the Marketplace Facilitator. In states that consider GunBroker.com to be a Marketplace Facilitator, GunBroker.com will have to calculate, collect and remit state sales tax on goods and services sold by third party sellers for transactions destined to states where a Marketplace Facilitator law has been enacted.

What does this mean to me?

As a Buyer:

If your state is a GunBroker.com MPF State, your state requires Marketplace Facilitators to collect and remit sales tax on items you purchase, so you will be required to pay the tax due for your purchases on GunBroker.com. The tax amount will be included on your order during checkout.

What if my business is tax exempt?

If your purchases are exempt from tax, you must submit your tax exemption documentation to GunBroker.com for review. Check with your tax professional or here for the documents required by each state: Sales Tax Exemption Certificates. After review, your account will be set up as tax-exempt buyer.

To submit your exemption please do the following:

  1. Send an email to SiteInfo@gunbroker.com
  2. Attach your tax exemption documentation.
  3. Send it from the email address used on your GunBroker.com account.
  4. Use the email subject: Sales Tax Exemption Request - Buyer
  5. Briefly describe why you are tax exempt in the body of the message.

As a Seller:

GunBroker.com will calculate and bill you for the sales tax due on each of your items sold to buyers in the GunBroker.com MPF States. This tax calculation will be based on the Ship To address on the order. The calculation will include sales tax for the item plus any additional taxes imposed by that state on other things such as shipping or handling.   

For sales of items on January 1, 2021 and afterwards that are shipped to GunBroker.com MPF States, you will be billed by us for sales tax amounts in addition to your GunBroker.com fees (see below under “How will this process flow?”).  If you do not use the GunBroker.com immediate checkout process, please see below under “What if I don’t use the GunBroker.com immediate checkout process for my sales?” for additional important instructions.

What if I am an individual and not a company or business?

The Marketplace Facilitator Laws require GunBroker.com to collect and remit sales tax on all sales by its sellers into GunBroker.com MPF States, regardless of whether the seller is an individual, a company or a business, and regardless of the seller’s location or its total sales into that state.  The only exception to this is for tax-exempt sellers (see below under “What if my account is a charity or tax-exempt?”) or tax-exempt buyers.

How will this process flow?

GunBroker.com will capture and record the sales tax related to each order being shipped to a GunBroker.com MPF State. For sellers using the GunBroker.com immediate checkout process, those amounts will be added to the amount collected by you from the buyer.  GunBroker.com will then bill and collect these sales tax amounts from you in the same manner as we bill and collect your monthly GunBroker.com fees, via your payment method on file. GunBroker.com will remit the amounts collected to each state as the Marketplace Facilitator.

What if I don’t use the GunBroker.com immediate checkout process for my sales?

The GunBroker.com immediate checkout process has the advantage of ensuring that the necessary sales taxes for sales into GunBroker.com MPF States is added to the amount collected from the buyer.  If you do not use the GunBroker.com immediate checkout process, you will need to add the sales tax for the GunBroker.com MPF States to your own checkout process and collect these amounts from your buyers in those states, because GunBroker.com will be billing and collecting these amounts from you.

Will I have access to sales tax information?

Yes. GunBroker.com plans to provide the ability for you to download your sales tax information as part of this process. The download will contain information about the order, ship to destination (used for tax calculation) and the tax amount.

Will I have to change my listings?

No. On January 1, 2021 the GunBroker.com checkout process will begin calculating sales tax on all orders. No changes to your listings will need to be made. Existing tax information on your listings will be overridden for the GunBroker.com MPF States. Other states will calculate based on the information you supply.

How will tax calculation work?

For each order, GunBroker.com will check to see if the ship to address is in a GunBroker.com MPF State. If it is, GunBroker.com will calculate the sales tax due for the order. If the address is in any other state, GunBroker.com will use your tax information, if provided by you (including by notations in your listings or through TaxCloud), to determine the appropriate tax.  If you have not provided information about a particular non-GunBroker.com MPF State, no additional sales tax will be added.

What if I am a TaxCloud user?

TaxCloud is a third party service provider that facilitates sales tax calculations for its account holders. If you are a TaxCloud user, we will use your TaxCloud account settings to calculate the sales taxes due for states other than GunBroker.com MPF States. The universal settings for all GunBroker.com sellers will continue to be used for sales into GunBroker.com MPF States.

How will this impact the sale tax filings I submit to states?

If you are already collecting sales tax for GunBroker sales into one of the GunBroker MPF States, you should no longer do so. States with MFP laws force the marketplace, not you, to collect and remit sales tax.

Sales tax requirements and regulations vary by state. GunBroker.com suggests you consult a tax accountant or tax attorney for guidance in these matters.  

Will this change how my fees are calculated?

No. GunBroker.com fees will continue to be assessed on the sale price of the item. The collection of state sales tax will not change your GunBroker.com fees. GunBroker.com is not assessing Final Value Fees on sales tax.

What if my account is a charity / tax exempt?

If your sales are exempt from tax, you must submit your tax exemption documentation to GunBroker.com for review. After review, your account will be set up as tax-exempt seller. To submit your exemption please do the following:

  1. Send an email to SiteInfo@gunbroker.com
  2. Attach your tax exemption documentation.
  3. Send it from the email address used on your GunBroker.com account.
  4. Use the email subject: Sales Tax Exemption Request - Seller
  5. Briefly describe why you are tax exempt in the body of the message.

For more details about Marketplace Facilitators:

We are providing the links below to publicly-available sources of guidance for you on the Marketplace Facilitator Laws.  If you make use of the information there, you understand that they have not been reviewed for correctness by GunBroker.com and may not be relied upon as tax or legal advice to you in your particular situation.  You should obtain any such advice from your own accountant or other tax advisor.

https://www.avalara.com/us/en/learn/guides/state-by-state-guide-to-marketplace-facilitator-laws.html

https://www.taxconnex.com/blog-/top-marketplace-facilitator-questions-answered

https://quaderno.io/blog/us-marketplace-facilitator-sales-tax-laws-everything-you-need-to-know/

https://www.google.com/search?hl=en&q=why+do+marketplace+facilitators+have+to+collect+sales+tax

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