Marketplace FAQ's 2019

     

    What's Changed?
    Recently enacted legislation requires marketplace facilitators to register with Maine Revenue Services (MRS) and to collect and remit Maine sales and use tax on all sales facilitated through their marketplace, effective October 1, 2019.  A marketplace facilitator is considered a retailer for each sale of tangible personal property or taxable service for delivery into this State that the marketplace facilitator facilitates on or through its marketplace, including those they facilitate for sellers not required to register for Maine sales and use tax.

    Definitions

    What is a "marketplace"?
    A "marketplace" is a physical or electronic location, including stores, booths, internet websites, or dedicated software applications, where tangible personal property or taxable services are offered for sale.

    Who is a "marketplace facilitator"?
    A "marketplace facilitator" is a business or person who facilitates retail sales by providing or operating a marketplace.  A marketplace facilitator lists, advertises, stores, or processes orders for tangible personal property or taxable services for sale by marketplace sellers and engages in one or more of the following activities:

    • Transmits or otherwise communicates an offer by the marketplace seller to potential buyers, or transmits or otherwise communicates an acceptance between the customer and the marketplace seller;
    • Collects payment from the customer and transmits that payment to the marketplace seller; or
    • Fulfilment or storage services, customer service, or assisting or accepting returns or exchanges with respect to the marketplace seller's tangible personal property or taxable services.

     

    Who is a "marketplace seller"?
    A "marketplace seller" is any person or business that sells tangible personal property or taxable services through a marketplace operated by a marketplace facilitator.

    Who is a "remote seller"?
    A "remote seller" is a seller without substantial physical presence in Maine who sells tangible personal property or taxable services into Maine.  Remote sellers include marketplace sellers.

    How is a remote seller different from an in-state seller?
    Unlike remote sellers, in-state sellers have a physical presence in Maine, such as in-state stores, employees, inventory, or representatives.

    What are "Maine sales"?
    "Maine sales" include all of a seller's sales of tangible personal property or taxable services delivered in or into the State, including sales exempt of tax.  In the case of a marketplace facilitator, "Maine sales" includes the sales by marketplace sellers that are facilitated by the marketplace facilitator and delivered into Maine and the sales made for delivery into Maine directly by the marketplace facilitator.

    What is a "separate transaction"?
    Each invoice generated from a Maine sale is considered a separate transaction.  For example, an invoice that has multiple products is considered one transaction.  A deposit made in advance of a sale is not a separate transaction.

    Determining Maine Sales Tax Registration Requirements

    Is a remote seller required to register for sales tax in Maine?
    Remote sellers have been required to register for Maine sales and use tax since July 1, 2018, provided the remote seller exceeds one of these thresholds:

    • The seller's gross sales from delivery of tangible personal property or taxable services into Maine in the previous calendar year or current calendar year exceeds $100,000; or
    • The seller sold tangible personal property or taxable services for delivery into Maine in at least 200 separate transactions in the previous calendar year or current calendar year.

     

    Is a marketplace facilitator required to register for sales tax in Maine?
    All marketplace facilitators with a substantial physical presence in Maine are required to register for and collect Maine sales and use tax.

    A marketplace facilitator without substantial physical presence in Maine is required to register to collect and remit Maine sales and use tax if:

    • The marketplace facilitator's gross sales from delivery of tangible personal property or taxable services into Maine in the previous calendar year or current calendar year exceeds $100,000; or
    • The marketplace facilitator sold or facilitated sales of tangible personal property or taxable services for delivery into Maine in at least 200 separate transactions in the previous calendar year or current calendar year.

     

    For the purposes of these measurements, the marketplace facilitator's gross sales and total number of transactions include sales facilitated on behalf of marketplace sellers and any direct sales made by the marketplace facilitator.
    Are marketplace sellers required to register for sales tax in Maine?
    A marketplace seller with a physical presence in the State of Maine is required to register for Maine sales and use tax regardless of their volume of sales.

    A marketplace seller with no physical presence in the State of Maine that only sells tangible personal property or taxable services through a marketplace, and the marketplace facilitator has provided a written statement to the marketplace seller of the marketplace facilitator's responsibility to collect the tax, is not required to register for the collection of Maine sales and use tax.

    A marketplace seller that has no physical presence in the State of Maine but makes sales into Maine both directly and through a marketplace may need to register as a remote seller, if the marketplace seller's direct sales into the State of Maine exceed $100,000 or 200 separate transactions in the previous or current calendar year.  Once registered, the marketplace seller must collect sales tax on all sales of tangible personal property or taxable services made into the State of Maine directly by the seller.

    When a marketplace facilitator collects tax on a Maine sale on behalf of a marketplace seller, does that sale count towards the marketplace seller's threshold?
    No; only the direct Maine sales by a marketplace seller are counted towards the $100,000 or 200 transaction thresholds for such a marketplace seller.

    How do I register as a retailer in Maine?
    Registration may be done electronically on MRS's website at:
    https://www5.informe.org/cgi-bin/online/suwtaxreg/index.

    If the applicant is a marketplace facilitator:

    • The applicant must check the "marketplace facilitator" box.
    • If the marketplace facilitator makes no sales of its own and only facilitates sales for marketplace sellers, then the marketplace facilitator would need one tax registration number.
    • If the marketplace facilitator makes direct sales as well as facilitates sales on behalf of marketplace sellers, the marketplace facilitator is advised to obtain separate sales tax account numbers for reporting their direct and facilitated sales.  If both types of sales are done by the same entity, the two accounts may be reported under a single consolidated return.

    If the applicant is a marketplace seller or remote seller, the applicant would require one sales tax registration number.

    Is there a fee to register for Maine sales and use tax?
    No.

    Can I register through the Streamline Sales Tax Registration System?
    No.

    Filing Returns; Other Responsibilities

    How does a marketplace facilitator report the sales tax?
    A marketplace facilitator is considered a retailer for each sale of tangible personal property or taxable services for delivery in Maine that the marketplace facilitator facilitates on or through its marketplace.

    The marketplace facilitator is responsible for collecting and remitting sales tax in the same manner as any other retailer in this State, as well as all obligations imposed by the Maine sales and use tax laws, including timely filing and payment of tax returns, recordkeeping requirements, etc.

    A marketplace facilitator shall provide a written statement to a marketplace seller, attesting that the marketplace facilitator will collect and remit sales tax on all taxable sales facilitated on behalf of that marketplace seller.

    How does a marketplace facilitator report sales made through its marketplace for marketplace sellers?
    If the marketplace facilitator only facilitates sales on behalf of marketplace sellers, the sales of all of its marketplace sellers should be reported under one single tax registration number.

    If the marketplace facilitator also makes direct sales of tangible personal property or tangible services for delivery into Maine, the marketplace facilitator should have a separate sales tax account number on which to report facilitated sales.  If both types of sales are done by the same entity and have the same FEIN or SSN, the two accounts may be reported under a consolidated return.

    How does a marketplace seller report sales facilitated by a marketplace facilitator?
    A marketplace seller that is registered for the collection of Maine sales tax would include sales facilitated through a marketplace facilitator in its gross sales with any direct sales made into Maine.  Sales facilitated by a marketplace facilitator that has provided written statement to the marketplace seller that explicitly states the marketplace facilitator is collecting and remitting the sales tax on all taxable sales facilitated for the marketplace seller will be included in the marketplace seller's exempt sales.

    If a marketplace seller does not have such a written statement and is registered to collect the Maine sales tax, the marketplace seller would be required to collect the tax on all sales facilitated through the marketplace.

    How do I file returns and make payments?
    Sales and use tax returns can be filed through MRS's IFile electronic filing program, available on the MRS website, www.maine.gov/revenue, then click "Electronic Services."

    How often are sales tax returns required to be filed?
    Generally, every retailer with an average tax liability of $600 or more each month must file a monthly tax return.  Rule 304, "Sales Tax Returns and Payments", establishes the filing frequencies for all sales and use tax return filers.  MRS rules may be viewed on the MRS website at www.maine.gov/revenue/rules/homepage.html.

    If all of my sales are exempt, am I still required to file returns, reporting zero tax due?
    Yes.

    Other Marketplace Questions

    What information must a marketplace facilitator communicate to a marketplace seller?
    A marketplace facilitator shall provide to marketplace sellers a written statement in which the marketplace facilitator explicitly provides that the marketplace facilitator will collect and remit sales tax on all taxable sales facilitated for the marketplace seller.

    Are marketplace sellers responsible for the tax on their Maine sales when those sales are facilitated by a marketplace facilitator?
    No.  If the marketplace seller is registered with the State of Maine for their direct sales, and the marketplace seller has received a written statement from a marketplace facilitator in which the marketplace facilitator states the facilitator is responsible for collecting the sales tax on any sales they facilitate for the marketplace seller, the marketplace seller may include the facilitated sales in their exempt sales for the reporting period.

    Are marketplace sellers and marketplace facilitators subject to sales and use tax audits by Maine Revenue Services?
    Yes, marketplace sellers and marketplace facilitators are subject to audits like any other business in Maine.

    What resources are available for information regarding Maine sales and use tax?
    Further information is available on the MRS website at: www.maine.gov/revenue/salesuse/salestax/salestax.html.

    Our Taxpayer Service Center for sales tax assistance can be reached at (207) 624-9693, Monday through Friday, 9:00 a.m. to 4:00 p.m., state holidays excepted.