Marketplace Fairness Act Compliance

How soon will I have to comply?

Online retailers who do not qualify for the Small Seller Exception (described below) will be required to collect sales tax starting the first day of the calendar quarter that is at least 180 days after the date of the enactment of the Marketplace Fairness Act. On this date (which could be as early as July 1, 2014), sales tax collection will be required on all sales shipped to the 23 states that are "Full Members" of the Streamlined Sales and Use Tax Agreement (SSUTA).

A Full Member State is a state that is in compliance with the Streamlined Sales and Use Tax Agreement through its laws, rules, regulations, and policies.

An Associate Member State is a state that is in compliance with the Streamlined Sales and Use Tax Agreement except that its laws, rules regulations and policies to bring the state into compliance are not in effect but are scheduled to take effect no later than 12 months after becoming an associate member.

To qualify for the Small Seller Exception a retailer must have less than $1,000,000 of total remote sales (in the United States) within the preceding calendar year.

A Remote Sale means a sale of goods or services to customers in a state where a seller does not have adequate physical or economic presence to establish nexus.

SSUTA Full Member States:
  • Arkansas
  • Georgia
  • Indiana
  • Iowa
  • Kansas
  • Kentucky
  • Michigan
  • Minnesota
  • Nebraska
  • Nevada
  • New Jersey
  • North Carolina
  • North Dakota
  • Ohio
  • Oklahoma
  • Rhode Island
  • South Dakota
  • Utah
  • Vermont
  • Washington
  • West Virginia
  • Wisconsin
  • Wyoming
SSUTA Associate Member States:
  • Tennessee
SSUTA States
SSUTA states
Associate Member States
Full Member States
As of January 1, 2014

Remaining states seeking authority require sales tax collection from remote retailers must enact state legislation to either:

  • Implement the provisions of the SSUTA. After achieving Full Member status, that state will get collection authority on the first day of the calendar quarter that is at least 90 days after achieving Full Member status, or
  • Implement the minimum simplification requirements described in the MFA. After enacting such legislation, collection authority will begin six months after the date of enactment, no earlier than the first day of the following calendar quarter.

How do I comply?

Managing the sales tax collection obligations for retailers has already been considered and planned for in the Streamlined Sales and Use Tax Agreement. Specifically, the SSUTA Governing Board oversees a certification process that includes the testing and verification of software and/or services to ensure compliance with the terms and mechanics of the SSUTA, but also with all other applicable state and local laws related to sales tax. During the certification process, each state independently tests every aspect of a Certified Service Provider (CSP) system. Under SSUTA, a CSP must "perform all the seller's sales and use tax functions, other than the seller's obligation to remit tax on its own purchases."

There are currently six Certified Service Provider platforms available to help retailers achieve compliance. Which one will be right for your organization will depend upon your organizations accounting, point-of-sale, and commerce platform.

SSUTA Certified Service Providers (in alphabetical order)
CompanyProductSoftwareService
Accurate Tax Enterprise TaxTools
Avalara AvaTax
CCH SpeedTax
Exactor Exactor
FedTax TaxCloud
Taxware Taxware