The Arkansas Revenue Legal Counsel ("Counsel") recently determined that a marketplace facilitator had to collect tax on sales made through its marketplace by government body sellers. The facilitator maintained a marketplace in which government agency sellers, such as towns and school districts, could list and sell surplus items to interested buyers. The facilitator allowed sellers access to list their own items and set their own terms and prices.
Arkansas requires marketplace facilitators to collect tax on sales they facilitate on behalf of marketplace sellers if they have economic nexus with the state. A marketplace facilitator achieves economic nexus when its sales into the state exceed $100,000 or 200 separate transactions. A "marketplace seller" is a person that has an agreement with a marketplace facilitator under which the marketplace facilitator facilitates sales for the person. Since "person" includes any legal entity or political subdivision, the Counsel concluded that the marketplace facilitator must collect and remit tax on taxable sales facilitated on behalf of a government body. Only sales in which the facilitator directly or indirectly collects payment from the purchaser are included in the economic nexus threshold calculation.