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Marketplace Facilitator Required to Collect Sales Tax
RALEIGH, NC – Beginning February 1, 2020, North Carolina takes the final step towards sales tax parity for all merchants who sell to North Carolina consumers by collecting sales tax on sales made through marketplace facilitators. The North Carolina Retail Merchants Association (NCRMA) has spearheaded this campaign since 1992 and commend the North Carolina General Assembly, the North Carolina Department of Revenue and Governor Cooper for their efforts and support. NCRMA issued the following statement from Andy Ellen, president and general counsel.
“For 25 years, since the US Supreme Court ruled in the Quill case that a business must have a physical presence in a State to be required to collect and remit sales tax to the State, NCRMA has stood firm in our belief that regardless of where a sale occurs, a sale is a sale and sales tax should be applied to every sale made to a North Carolina consumer. Mainstreet retailers that employ your neighbors, pay property tax and support the little league team and high school band have long been required to collect sales tax that online stores did not, putting them at an automatic disadvantage. In 2018, the Court’s decision in Wayfair provided States the ability to ‘level the playing field’ between remote internet retailers and brick and mortar retailers.”
After the Wayfair decision, the North Carolina Department of Revenue (NC DOR) immediately began implementing the law based on the Wayfair decision. On November 1, 2018, the NC DOR began requiring businesses that have over $100,000 in transactions or over 200 transactions in a year to begin collecting and remitting sales tax in North Carolina.
In November 2019, a new state law was passed requiring sales tax to be collected and remitted by marketplace facilitators such as Amazon, eBay and Etsy. The law officially goes into effect on February 1, 2020 and sets the same conditions for marketplace facilitators as other out of state businesses. A marketplace facilitator will be considered a retailer if it has over $100,000 in transactions or over 200 transactions in a year and will be required to collect and remit sales tax in North Carolina.
“Since the Quill decision in 1992, there were many ups and downs with federal legislation that would have required collection of sales tax by all out-of-state retailers,” said Ellen. “Tomorrow, when marketplace facilitators are required to collect sales tax, our brick and mortar retailers will finally be on a level playing field with all retailers and can compete on price and customer service with any business.”
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About the North Carolina Retail Merchants Association
The North Carolina Retail Merchants Association (NCRMA) is a nonprofit trade association organized in 1902 to improve the business climate for retailers in North Carolina. Over 100 years later, NCRMA remains the voice of the retail industry for North Carolina. NCRMA represents the interests of individual merchants before the General Assembly and serves as a vital link to state government. Its credibility lies in its longevity and commitment to serving the ever-changing needs of its members. The Association’s membership includes more than 25,000 stores from across the state whose business represents 75 percent of North Carolina’s retail sales volume. NCRMA serves both large and small retailers from multi-state chains to local “mom and pops” and all types of merchants including antique, apparel, art, automotive, book, carpet, department, drug, electronics, floral, furniture, grocery, hardware, jewelry, paint and variety stores. For more information, visit https://www.ncrma.org/.