Marketplace facilitators without a physical presence in North Dakota might be considered retailers with sales and use tax duties if they:
– facilitate sales of property or services that are subject to North Dakota sales tax; and
– meet North Dakota’s economic nexus threshold.
A marketplace facilitator would be considered a retailer for each sale it facilitates on its forum for a marketplace seller.
Economic Nexus Thresholds
Remote sellers must collect North Dakota sales and use tax if, during the previous or current calendar year:
1. the seller’s sales into North Dakota exceed $100,000; or
2. the seller makes sales for delivery into North Dakota in 200 or more separate transactions.
North Dakota might eliminate the 200-transaction threshold, under previously reported legislation introduced in the Senate. (TAXDAY, 2019/01/14, S.17)
Initiation of Tax Duties
Marketplace facilitators exceeding the sales threshold would have to obtain a permit. They must also collect tax during the following calendar year or 60 days after meeting the threshold, whichever is earlier.
Marketplace facilitators would not have to collect or remit tax under this legislation on sales made before October 1, 2019.
Relief from Liability
Marketplace facilitators would be relieved of liability for failure to collect and remit tax under certain circumstances, including if they:
– require sellers to provide information;
– make an effort to obtain information from the seller about a retail transaction;
– relied on incorrect or insufficient information provided by the seller; and
– are not affiliated with the marketplace seller.
S.B. 2338, as introduced in the North Dakota Senate on January 21, 2019