What is a marketplace facilitator law, and does it apply to me?

A marketplace facilitator law requires the marketplace platform (not you, the seller) to collect and remit sales tax on transactions made through that platform. Every state with a sales tax has one. If you sell on Amazon, Etsy, or Walmart Marketplace, those platforms are already collecting on your behalf in all covered states.

What these laws don’t do is the part most sellers miss.

What the law actually requires

Before marketplace facilitator laws existed, sellers were individually responsible for collecting sales tax in every state where they had nexus, including on their Amazon and Etsy sales. States found this nearly impossible to enforce at scale, and most sellers weren’t complying.

Marketplace facilitator laws shifted that burden. Instead of chasing individual sellers, states now require large platforms to collect and remit on behalf of everyone selling through them. The platform (called the “facilitator”) is responsible for knowing the correct tax rate in each jurisdiction, applying it at checkout, collecting it from the buyer, and remitting it to each state.

For sellers, this means: your sales through a covered marketplace are handled by the marketplace, automatically, in every state.

Which marketplaces are covered

Most major platforms are covered in all states with facilitator laws:

• Amazon: all states with a sales tax
• Etsy: all states with a sales tax
• eBay: all states with a sales tax
• Walmart Marketplace: all states with a sales tax
• TikTok Shop: all states with a sales tax
• Target Plus: all states with a sales tax

The specific threshold that triggers facilitator status varies by state, typically $100,000 in sales or 200 transactions through the platform, but every major national marketplace clears that bar in every state.

Shopify is not itself a marketplace facilitator for your storefront. When you run your own Shopify store, you’re selling directly to customers, not through a marketplace. Shopify doesn’t collect or remit tax on your behalf for those sales.

All 45 states with a sales tax have enacted these laws

There are 45 states (plus Washington D.C.) that have a general sales tax. As of 2025, every one of them has a marketplace facilitator law in effect. Alaska, Delaware, Montana, New Hampshire, and Oregon have no statewide sales tax and no facilitator law.

For sellers: there is no state with a sales tax where your Amazon or Etsy sales are your collection responsibility. The marketplace handles it everywhere.

What facilitator laws don’t cover

This is where sellers get into trouble. Marketplace facilitator laws cover a narrow thing, transactions completed through that marketplace. They don’t:

Your sales on other channels

If you sell $300K through Amazon and $100K through your own Shopify store, Amazon handles the Amazon side. Your Shopify sales are entirely your responsibility in every state where you have nexus. Amazon’s collection does nothing for them.

This is the most common multi-channel compliance gap. Sellers see Amazon collecting and assume they’re covered. They’re covered on Amazon. Their own site is a separate obligation.

Your registration status

Marketplace collection doesn’t register you in any state. It doesn’t create or cancel a permit. If you have nexus in a state (for any reason) and you sell on any channel besides a covered marketplace, you need a permit in that state. The permit doesn’t exist automatically because Amazon is collecting on your Amazon sales.

Physical nexus created by FBA inventory

If Amazon stores your inventory in a fulfillment center in a state, you have physical nexus in that state. Physical nexus creates a registration obligation regardless of marketplace collection.

A seller with FBA inventory in Ohio needs to be registered in Ohio and collecting on their own-channel sales there, even though Amazon is collecting on their Amazon sales in Ohio. These are two separate relationships with the state.

Related: If Amazon already collects sales tax, do I still need to register?

Your economic nexus threshold

In most states, your marketplace sales still count toward your economic nexus threshold, even though the marketplace is collecting the tax. Crossing the threshold via marketplace sales can create a nexus obligation for your own-channel sales in that state.

Example: You have $110K in Etsy sales in Pennsylvania and $20K in direct website sales in Pennsylvania. Etsy handles the Etsy side. But you’ve crossed Pennsylvania’s $100K threshold, creating economic nexus. Your $20K in direct sales are now taxable, and you need a permit to collect on them.

Related: Do Amazon and Etsy sales count toward my state nexus threshold?

Does this apply to you?

Yes, if you sell through any covered marketplace. Your marketplace transactions in all 45 sales-tax states are handled by the platform.

Whether you have additional obligations depends on three questions:

1. Do you have physical nexus anywhere? FBA inventory, employees, offices, or trade show activity in a state creates registration obligations beyond marketplace collection.
2. Do you sell on any channel besides a covered marketplace? Your own website, wholesale, direct-to-consumer sales, all require you to collect and remit independently in states where you have nexus.
3. Have you crossed the economic nexus threshold in any state through marketplace sales? If so, you may have a registration obligation for your direct sales in that state even if you thought you were covered.