Louisiana Court of Appeals Finds Marketplace Facilitators Liable for Sales Tax as Dealers

Friday, January 11th, 2019

Online shopper orders goods from an e-commerce website.

The Louisiana Court of Appeals has recently addressed the sales tax liability of marketplace facilitators. A company sold its own inventory and the inventory of third-party retailers through its website.

The company argued it was not liable for sales made by third-party retailers on its website because the company never had title or possession of the property being sold and never transferred title or possession of the property. In other words, the company was not the seller in those transactions.

Under Louisiana law, the dealer must collect sales tax from the consumer. Any dealer who fails to collect sales tax is liable for the tax and must pay the tax itself. The court found that the term "dealer" included a wider group of people than "seller." A dealer included those who engaged in regular or systematic solicitation of a consumer market.

The court determined that the company was a marketplace facilitator that facilitated transactions, assumed risk of loss, performed payment processing services, and helped third-party retailers reach new customers. As a result, the company was engaged in regular or systematic solicitation of a consumer market, and was a dealer under Louisiana law.


About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

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