57-39.2-02.3. Marketplace facilitator tax collection requirement

57-39.2-02.3. Marketplace facilitator tax collection requirement

1. For the purposes of this section:

a. "Exemption certificate" means documentation furnished by a buyer to a seller to

claim an exemption from sales tax or use tax. The term includes a resale

certificate or other documentation authorized in section 57-39.2-10 furnished by a

buyer to a seller.

b. "Marketplace" means a physical or electronic place where one or more

marketplace sellers sell or offer for sale tangible personal property or other

products or services subject to tax under section 57-39.2-02.1, regardless of

whether the marketplace seller has a physical presence in this state. A physical or

electronic place includes a store, booth, internet website, catalog, television, radio

broadcast, or a dedicated sales software application.

c. (1) "Marketplace facilitator" means a person that:

(a) Contracts with sellers to facilitate for consideration, regardless of

whether deducted as fees from the transaction, the sale of the seller's

products through a physical or electronic marketplace operated by the

person;

(b) Engages directly or indirectly, through one or more affiliated persons,

in any of the following:

[1] Transmitting or otherwise communicating the offer or acceptance

between the buyer and seller;

[2] Owning or operating the infrastructure, electronic or physical, or

technology that brings buyers and sellers together;

[3] Providing a virtual currency that buyers are allowed or required to

use to purchase products from the seller; or

[4] Software development or research and development activities

related to any of the activities described in subparagraph a, if

such activities are directly related to a physical presence or

electronic marketplace operated by the person or an affiliated

person; and

(c) Engages in any of the following activities with respect to the seller's

products:

[1] Payment processing services;

[2] Fulfillment or storage services;

[3] Listing products for sale;

[4] Setting prices;

[5] Branding sales as those of the marketplace facilitator;

[6] Order taking;

[7] Advertising or promotion; or

[8] Providing customer service or accepting or assisting with returns

or exchanges.

(2) The term does not include a payment processor business appointed by a

merchant to handle payment transactions from various channels, such as

credit cards and debit cards, and whose sole activity with respect to

marketplace sales is to handle transactions between two parties.

d. "Marketplace seller" means a retailer that sells or offers for sale tangible personal

property or other products or services subject to tax under section 57-39.2-02.1,

through a marketplace that is owned, operated, or controlled by a marketplace

facilitator.

2. Notwithstanding any other provision of law, any marketplace facilitator facilitating sales

of tangible personal property or other products or services subject to tax under section

57-39.2-02.1, which does not have a physical presence in this state, is a retailer

subject to chapters 57-39.2 and 57-40.2 and shall remit sales or use tax if the

marketplace facilitator facilitates or makes sales through the marketplace that, when

the sales are combined, meet the threshold amount in section 57-39.2-02.2. A

marketplace facilitator exceeding the sales threshold shall obtain a permit under

section 57-39.2-14, and begin collecting the tax on sales during the following calendar

year or beginning sixty days after the threshold is met, whichever is earlier.

3. A marketplace facilitator shall be considered the retailer of each sale the facilitator

facilitates on its forum for a marketplace seller. Each marketplace facilitator shall:

a. Be required to collect and remit for each sale any tax imposed under chapters

57-39.2 and 57-40.2.

b. Be responsible for all obligations imposed under chapter 57-39.2 as if the

marketplace facilitator was the retailer of the sale.

facilitator shall be considered the retailer of each sale the facilitator

facilitates on its forum for a marketplace seller. Each marketplace facilitator shall:

a. Be required to collect and remit for each sale any tax imposed under chapters

57-39.2 and 57-40.2.

b. Be responsible for all obligations imposed under chapter 57-39.2 as if the

marketplace facilitator was the retailer of the sale.

c. In accordance with the provisions of section 57-39.2-10, keep such records and

information as may be required by the tax commissioner to ensure proper

collection and remittance of tax.

d. 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 under section 57-39.2-02.1 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 under section 57-39.2-11.

e. Be subject to audit by the tax commissioner with respect to all retail sales for

which it is required to collect and pay the tax imposed under chapters 57-39.2

and 57-40.2. If the tax commissioner audits the marketplace facilitator, the tax

commissioner is prohibited from auditing the marketplace seller for the same

retail sales unless the marketplace facilitator seeks relief under subsection 4.

4. A marketplace facilitator is not liable under this section for failure to collect and remit

sales and use tax if the marketplace facilitator demonstrates to the satisfaction of the

department that:

a. 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;

b. 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. If

the marketplace facilitator is relieved of liability under this subsection, the seller

and the purchaser are liable for any amount of uncollected, unpaid, or unremitted

tax; and

c. The marketplace facilitator and marketplace seller are not affiliated. A

marketplace facilitator and a marketplace seller are affiliated if:

(1) Either owns more than five percent of the other; or

(2) Both are subject to the control of a common entity that owns more than five

percent of each.

5. Notwithstanding any other provision of law, the tax imposed under this section may be

refunded under the following conditions:

a. A person qualifying for an exemption under subsection 5, 6, 24, 32, 43, 48, or 52

of section 57-39.2-04 may apply in writing to the tax commissioner on a form and

in the manner as the tax commissioner may prescribe reciting sufficient facts

establishing the exempt status of the sale.

b. The refund is five dollars or more. Qualifying sales may be accumulated for

periods not in excess of one calendar year in order to reach the five dollar limit.

6. A class action may not be brought against a marketplace facilitator on behalf of

purchasers arising from or in any way related to an overpayment of sales or use tax

collected by the marketplace facilitator, regardless of whether such action is

characterized as a tax refund claim.

7. No marketplace facilitator is required to collect or remit sales or use tax under this

section on any sale made before October 1, 2019.