Q) What is economic nexus?
A) Economic nexus laws apply to any business
that makes sales into states in which they have no physical presence but meet
the state’s sales and/or transactions thresholds.
Q) What is a Marketplace?
A) A Marketplace is any physical or
electronic presence, including but not limited to a store, booth, Internet
website, catalog, television or radio broadcast, or a dedicated sales software
application, where a marketplace seller sells or offers for sale tangible
Q) What is a Marketplace Facilitator?
A) A Marketplace Facilitator generally
includes businesses that facilitate retail sales by providing infrastructure
(i.e. listing the product on the Marketplace, communicating offer acceptance of
a retail sale, providing the physical or electronic Marketplace, etc.) or
support (i.e. customer service, fulfillment or storage services, etc.) for
retail sales to occur; AND collecting the sales price, processing payments, or
receiving compensations from the retail sale.
**Marketplace Facilitators include, but are
not limited to, consignment stores, auctions, food
delivery services such as “Uber Eats” and online Marketplaces.
Q) What is a Marketplace Seller?
A) A person who has
an agreement with a Marketplace Facilitator and makes retail sales of tangible
merchandise through a Marketplace owned, operated, or controlled by a Marketplace
Facilitator. **A Marketplace Seller can also be a remote seller, if they
make direct sales into Nevada in addition to those made through a Marketplace.
Q) What is a Remote Seller?
A) A “remote seller” is a seller that does not
have a physical presence or that had no other legal requirement to register and
collect the applicable sales or use taxes in the state. The United States
Supreme Court ruled in South Dakota v. Wayfair on June 21, 2018, that states
can require remote sellers to collect and remit the applicable sales or use tax
on sales delivered to locations within their state – regardless of whether the
seller has a physical presence in the state. Consistent with the Wayfair
decision, Nevada has adopted regulations that establish requirements for remote
sellers that make sales into Nevada effective 10/1/18.
**A Remote Seller can
also be a Marketplace Seller if, in addition to their direct sales into Nevada,
they also sell merchandise through a Marketplace. For more information please
Q) When does a Marketplace Facilitator
or Marketplace Seller establish economic nexus?
Marketplace Facilitator, Marketplace Seller or remote seller’s combined sales
are used to determine if the sales threshold is met through all sources, to
include non-Marketplace (direct retail sales) and Marketplace Nevada sales. Effective October 1, 2019, the Marketplace Facilitator, Marketplace Seller
and/or the Remote Seller (no physical presence), must register to collect and remit sales tax on all of its
facilitated Nevada retail sales and its direct Nevada retail sales when its
total of all such sales exceeds $100,000 or 200 separate transactions in the
preceding or current calendar year.
Please note: Nevada’s new rules went into effect October 1, 2018 for
Remote Sellers (South Dakota v. Wayfair). Once a remote seller hits the
threshold described above (>$100,000 in sales or 200 or more transactions
for delivery into Nevada in the previous or current calendar year), they must
register by the first day of the calendar month that begins at least 30
calendar days after they hit the threshold. Sales tax must be collected
beginning with sales on that date but does not need to be collected on sales
made prior to that date. For example, if a remote seller has already met
threshold on October 1, 2018, they must register and begin collecting sales tax
on sales by November 1, 2018.
Q) How is a Remote Seller different from an In-State
A) Unlike Remote Sellers, In-State Sellers
have a physical presence (nexus) in Nevada, such as in-state stores, offices,
warehouses, employees/representatives located in or coming into the state and
inventory stored in Nevada. A business with physical presence must register,
collect, remit and report ALL their sales regardless if they do not meet the
Q) What are “direct sales”?
A) Direct sales are any sales made by the
seller directly to Nevada consumers. These “sales” do not include Nevada retail
sales made through a Marketplace Facilitator.
Q) Who must register?
A) Any person, including a Marketplace Facilitator
or a Marketplace Seller that is actively engaged in selling tangible personal
property and has a physical presence or economic nexus in this state, including
an out of state business that stores its inventory in a third-party’s
fulfillment center in Nevada, is
required to register with the Nevada Department of Taxation to collect and
remit Nevada sales and use tax.
Q) How does one determine if
they have a filing obligation beginning October 1, 2019 for the short period,
October 1 through December 31, 2019?
A) The Marketplace
Facilitator, Marketplace Seller or Remote Seller should total its Nevada sales
from January 1, 2018 through December 31, 2018 as well as the total Nevada
sales from January 1, 2019 through September 30, 2019. If in either year the
sales exceed $100,000 or 200 transactions, they are required to register and
collect sales tax starting on the first day of the first calendar month that
begins at least 30 calendar days after they exceeded the sales threshold, which
would be November 1, 2019.
Q) When must I register?
A) The Marketplace Facilitator,
Marketplace Seller or Remote Seller must collect Nevada sales tax starting on
the first day of the first calendar month that begins at least 30 calendar days
after the Marketplace Facilitator, Marketplace Seller or Remote Seller meets or
exceeds the Nevada retail sales threshold. They must collect the tax through the
end of the calendar year in which the sales threshold was met or exceeded as
well as the entire next calendar year. If the Marketplace Facilitator,
Marketplace Seller or Remote Seller that is registered fails to meet or exceed
the sales threshold at any point in the second year, they are not
required to collect and remit the tax in year three. They do not need to collect
the tax; however, they still need to file a return to report their total sales
in column A and exempt them out in column B.
If the Marketplace Facilitator, Marketplace Seller
or Remote Seller meets or exceeds the sales threshold at any point in year three,
they must begin collecting Nevada sales tax on the first day of the first calendar
month that begins at least 30 calendar days after the seller met or exceeded
the sales threshold.
Q) Does a Marketplace Facilitator need to file a separate sales tax
returns for all sales made on behalf of the Marketplace Sellers they facilitate?
A) Yes, the Marketplace Facilitator
will file one return for all its direct sales under one location and a separate
return under a separate location number for all the sales that they facilitate
on behalf of the Marketplace Sellers. **Please note, these locations
cannot be consolidated.
Q) If a Marketplace Seller
has no physical presence in Nevada and meets or exceeds the Nevada retail sales
threshold, but only makes retail sales into Nevada through Marketplaces do they
need to register for a Nevada Sales Tax permit?
A) If all the Marketplace Facilitators
that the seller uses are registered to collect and remit Nevada sales tax, then
the seller does not need to register with the Department of Taxation.
**Please note: If the seller also makes direct sales into Nevada in
addition to those made through the Marketplace and meets the Nevada retail
sales threshold, they must register, collect and remit the Nevada sales tax on
the direct sales made into Nevada.
Q) If I sell through
a Marketplace Facilitator, is there any documentation showing that I am
relieved from collecting the Nevada sales tax and the Marketplace Facilitator
A) Yes, the Marketplace Facilitator
must issue a certificate prescribed by the Departments to all Marketplace Sellers
stating that the Marketplace Facilitator will register, collect, remit and
report all Nevada sales tax. They will also be responsible for being audited on
such facilitated Nevada sales.
Q) What if a Marketplace
Facilitator does not meet the Nevada retail sales threshold?
A) If the Marketplace Facilitator
does not meet the sales threshold, they do not need to register to collect
Nevada sales tax and must notify the Marketplace Seller that is does not meet
the threshold so that the Marketplace Seller can register to collect the Nevada
sales tax if they meet or exceed the Nevada retail sales threshold.
Q) What if I am a Marketplace Facilitator that also makes my own sales through my Marketplace platform?
A) When applying, you will check the "Marketplace Facilitator" box. You will be registered for two locations.
- On the first location, you will report all direct sales, (sales made by your company through store front or personal website, NOT through the Marketplace) if you have no direct sales, please file a zero return.
- On the second location, you will report all sales your company made through your Marketplace as well as all the sales facilitated by you on behalf of your clients using your Marketplace to sell their items.
Q) Can Marketplace Facilitators
“opt out” of collecting the Nevada sales tax on behalf of the Marketplace Sellers
the Marketplace Facilitator and Marketplace Seller can enter into a written
agreement whereby the Marketplace Seller assumes responsibility for the
collection and remittance of the Nevada sales tax for all Nevada retail sales
made by the Marketplace Seller through the Marketplace Facilitator if all of
the following conditions are satisfied:
- The Marketplace Facilitator
enters into this agreement with all Marketplace Sellers that the Marketplace Facilitator
makes or facilitates Nevada retail sales transactions on behalf of those Marketplace
- All Marketplace Sellers
are currently registered with Nevada and hold a Nevada sales tax permit;
- The agreement
specifies that the Marketplace Seller is responsible for collecting, remitting
and reporting the Nevada sales tax on all Nevada retail sales made through the Marketplace
- The Marketplace Facilitator
maintains notification on its website that Nevada sales tax is being collected,
remitted and reported by the Marketplace Seller; and
- The Marketplace Facilitator
provides the agreement to the Department prior to facilitating Nevada retail
sales on behalf of the Marketplace Seller.
Is a Marketplace Facilitator required to maintain exemption
A) The Marketplace Facilitator is responsible for obtaining and
maintaining exemption certificates
when the Marketplace Facilitator makes or facilitates a Nevada retail sale on
behalf of a Marketplace Seller.
Q) Can a Marketplace Facilitator be found
liable for an underpayment after being
audited for sales facilitated on behalf of a Marketplace Seller?
A)Yes, if the Marketplace Facilitator collects, remits and reports the
Nevada sales tax on behalf of the Marketplace Seller and an underpayment has
been found after an audit, the Marketplace Facilitator will ultimately be held
liable unless (1) The Marketplace Facilitator provides proof satisfactory to
the Department that the Marketplace Facilitator has made a reasonable effort to
obtain accurate information from the Marketplace Seller about the Nevada retail
sale; and (2) The failure to collect, remit and report the correct Nevada sales
tax on the retail sale was due to incorrect information provided to the Marketplace
Facilitator by the Marketplace Seller.
Q) Can a Marketplace Facilitator claim a bad
debt deduction on a sale facilitated on behalf of a Marketplace Seller?
A) A Marketplace
Facilitator is allowed to claim a bad debt deduction on a sales transaction if it collects and remits Nevada
sales or use tax on behalf of the Marketplace Seller, and either the Marketplace
Facilitator or Marketplace Seller is eligible to claim the deduction in accordance
with NRS 372.368 and section 166 of the Internal Revenue Code. A Marketplace Facilitator
shall claim the bad debt deduction on its Nevada sales and use tax return for
the period in which the Marketplace Facilitator orMarketplace Seller writes off the amount as
uncollectible in its books and records and such amount is eligible to be
deducted as a bad debt for federal income tax purposes.
a Marketplace Seller need to file a Sales Tax return if a Marketplace
Facilitator is collecting and remitting the sales tax on their behalf?
A) If a
Marketplace Seller has presence in Nevada, they are required to
register, collect, remit and report the
sales tax from all its Nevada sales on a Nevada sales
tax return. They will report any direct sales that are not sold through a
Marketplace and omit the sales that are reported by the Marketplace
Facilitator. If all sales are made through a Marketplace Facilitator, they will
file a zero return.
If a Marketplace Seller has NO physical presence in Nevada
and ONLY sells through a Marketplace Facilitator that is registered to
collect, remit and report the sales tax on the sellers behalf, the Marketplace
Seller does not need to register with the Department or file a Nevada sales tax