Marketplace Facilitator Act

Revenue and Taxation Code Division 2, Part 1, Chapter 1.7 deals with the Marketplace Facilitator Act under the Sales and Use Tax Laws.” Article 1 deals with general provisions and definitions. Section 6040 names this chapter.

Section 6041 defines the following terms: “marketplace,” “marketplace facilitator,” and “marketplace seller.”

Section 6041.1 explains that newspapers, internet websites, and other entities that advertise tangible personal property for sale, refer purchasers to the seller by telephone, internet link, or other similar means to complete the sale, and do not participate further in the sale are not facilitating a sale under this chapter.

Section 6041.5 defines the following terms: “delivery network company,” “delivery services,” “local merchant,” and “local product.”

Section 6041.6 defines the following terms: “option accessory,” “passenger vehicle rental,” “rental company,” and “vehicle rental broker.”

Article 2 deals with registration and collection. Section 6042 provides that a marketplace facilitator is considered the seller, retailer, and dealer for each sale facilitated through its marketplace for purposes of determining whether the marketplace facilitator is required to register with the department.

Section 6043 states that a marketplace facilitator that is registered with the department or required to register with the department and that facilitates a retail sale of tangible personal property by a marketplace seller is the retailer selling or making the sale of the tangible personal property sold through its marketplace for purposes of this part.

Section 6043.1 specifies that a marketplace facilitator that is registered with the department or required to register with the department and that facilitates a retail sale of tangible personal property by a marketplace seller is the retailer or dealer or both for purposes of collecting and remitting any fee imposed on the consumer in regards to that retail sale.

Section 6044 states that, for purposes of determining the total combined sales of tangible personal property for delivery in this state, a marketplace facilitator is required to include specified sales of tangible personal property for delivery in this state.

Section 6045 requires a marketplace seller to register with the department for retail sales made on its own behalf and not facilitated through a registered marketplace facilitator.

Article 3 deals with marketplace facilitator relief.

Section 6046 states that, if the marketplace facilitator demonstrates to the satisfaction of the department that the marketplace facilitator has made a reasonable effort to obtain accurate and complete information from an unrelated marketplace seller about a retail sale and that the failure to remit the correct amount of taxes or fees imposed under this part, or under any other law that imposes a fee, was due to incorrect or incomplete information provided to the marketplace facilitator by the unrelated marketplace seller, then the marketplace facilitator is relieved of liability for the taxes or fees for that retail sale.

This section does not apply with regard to a retail sale for which the marketplace facilitator is the retailer selling or making the sale of the tangible personal property on its own behalf or if the marketplace facilitator and marketplace seller are related. Where a marketplace facilitator is relieved of liability for the taxes or fees on a retail sale under this section, the marketplace seller is the retailer for that retail sale.

Section 6047 provides that a marketplace facilitator is relieved of the taxes or fees on retail sales facilitated through its marketplace if the marketplace facilitator demonstrates to the satisfaction of the department all of the four specified actions. To the extent that a marketplace facilitator is relieved of liability for collection of sales and use tax or any other fee administered, the marketplace seller for whom the marketplace facilitator has facilitated the retail sale is also relieved of liability.

The department may determine the manner in which a marketplace facilitator or marketplace seller must claim the liability relief provided in this section. The liability relief provided under this section cannot exceed the specified percentage of the sum of all sales and use tax and any other fee administered due on sales facilitated by a marketplace facilitator for marketplace sellers, which sales does not include sales by the marketplace facilitator or persons related to the marketplace facilitators: