Marketplace Facilitators and Marketplace Sellers Frequently Asked Questions

Yes. A marketplace facilitator engaged in business in North Carolina is required to collect and remit sales tax on behalf of all its marketplace sellers. A marketplace facilitator must collect and remit the tax even if the marketplace seller:

• has a physical presence in North Carolina;
• does not have a physical presence in North Carolina;
• is registered as a retailer in North Carolina;
• is not registered as a retailer in North Carolina;
• would have been required to collect and remit sales and use tax had the sales not been made through a marketplace; or
• would not have been required to collect and remit sales and use tax had the sales not been made through a marketplace.

February 1, 2020.

The most common examples of a person engaged in business in North Carolina are the following:

• a person with a physical presence in North Carolina; or
• a remote seller who has gross sales in excess of $100,000 sourced to North Carolina in the previous or current calendar year, including sales as a marketplace seller and marketplace-facilitated sales. 

Under North Carolina law, a marketplace facilitator or marketplace seller is considered engaged in business by doing any of the following:

• Maintaining, occupying, or using permanently or temporarily, directly or indirectly, or through a subsidiary or agent, by whatever name called, any office, place of distribution, sales or sample room, warehouse or storage place, or other place of business in this state, or permanently or temporarily, directly or through a subsidiary, having any representative, agent, sales representative, marketplace facilitator subject to the requirements of G.S. § 105-164.4J, or solicitor operating or transacting business by mobile phone application or other applications in this state. The fact that any corporate retailer, agent, or subsidiary engaged in business in this state may not be legally domesticated or qualified to do business in this state is immaterial.
• Maintaining in this state, either permanently or temporarily, directly or through a subsidiary, tangible personal property or certain digital property for the purpose of lease or rental.
• Making a remote sale, if one of the conditions listed in G.S. § 105-164.8(b) is met. Refer to the Remote Sales webpage for additional details.
• Shipping wine directly to a purchaser in this state as authorized by G.S. § 18B-1001.1.
• Making marketplace-facilitated sales subject to the requirements of G.S. § 105-164.4J.

Generally, no. However, if the marketplace seller is engaged in business in this state and sells through a marketplace facilitator that is not engaged in business in this state, the marketplace seller would be responsible for collecting and remitting sales and use tax on such sales. Refer to the Remote Sales webpage for additional details.

It depends.

For sales made through a marketplace facilitator engaged in business in North Carolina, the marketplace seller is not required to collect and remit the tax. In this scenario, the marketplace facilitator is responsible for collecting and remitting the sales tax.

For sales not made through a marketplace facilitator engaged in business in North Carolina, the marketplace seller is required to collect and remit tax on all taxable sales sourced to North Carolina.

Yes. A marketplace facilitator that is engaged in business in North Carolina is considered the retailer of each marketplace-facilitated sale it makes and is liable for collecting and remitting the sales and use tax due on all such sales. Refer to the Remote Sales webpage for additional details.

No. A marketplace facilitator engaged in business in North Carolina is the retailer required to collect and remit tax on marketplace-facilitated sales sourced to North Carolina.

Yes. For example, a marketplace facilitator that is engaged in business in North Carolina is required to collect and remit scrap tire disposal tax, white goods disposal tax, dry-cleaning solvent tax, and the 911 service charge for prepaid wireless telecommunications service, as applicable.  Consult your tax professional regarding other types of taxes that may be due in North Carolina.

It depends.

If the marketplace seller is engaged in business in North Carolina, but the marketplace facilitator is not engaged in business in North Carolina, the marketplace seller is required to collect and remit tax on all taxable sales sourced to North Carolina and remit use tax, as applicable.

If the marketplace seller and the marketplace facilitator are both engaged in business in North Carolina, the marketplace facilitator is required to collect and remit the sales tax on behalf of the marketplace seller. A marketplace seller is only required to register and file a return if the marketplace seller has a physical presence in North Carolina and is required to remit use tax.

If the marketplace seller is not engaged in business in North Carolina, the marketplace seller is not required to register and file a return.

If the marketplace seller has met the threshold for remote sellers through its multiple channels or is otherwise engaged in business in North Carolina, the marketplace seller is required to collect and remit sales and use tax on its direct sales sourced to North Carolina. A marketplace facilitator engaged in business in this state is responsible for collecting and remitting sales and use tax on marketplace-facilitated sales. Refer to the Remote Sales webpage for additional details.

Yes, marketplace facilitators or marketplace sellers can register without being engaged in business in the state.

Facilitators and sellers can register directly with North Carolina by using the Department’s online business registration portal or by submitting the appropriate registration application. There is no fee to apply for a certificate of registration in North Carolina. General questions about business registrations may be directed to 1-877-252-3052.

In addition, North Carolina is a member of the Streamlined Sales Tax™ Governing Board, Inc. (“SSTGB”). Facilitators and sellers can register with all 24 Streamlined member states (AR, GA, IN, IA, KS, KY, MI, MN, NE, NV, NJ, NC, ND, OH, OK, RI, SD, TN, UT, VT, WA, WV, WI, and WY) by completing one online application through the Streamlined Sales Tax™ Registration System. There is no fee to complete and submit this online registration form.

A marketplace seller making direct sales and marketplace-facilitated sales should report its sales on the Sales and Use Tax Return, Form E-500, as follows:

Line 1, “North Carolina Gross Receipts” – The seller should report all sales sourced to North Carolina on this line. This includes marketplace-facilitated sales and direct sales.  

Line 2, “Sales for Resale” – The seller should report all sales sourced to North Carolina that were made through a marketplace facilitator engaged in business in the state and direct sales for resale on this line.

Lines 4-12 – The seller should report all sales for which it is responsible for collecting and remitting North Carolina sales and use tax in the taxable “Receipts” column at the applicable rates of sales and use tax. These sales include all taxable direct sales and all taxable marketplace-facilitated sales made through a marketplace facilitator not engaged in business in the state. Marketplace-facilitated sales properly reported on line 2 are not reported on lines 4 through 12. 

No. Sales made on behalf of marketplace sellers and direct sales made by a marketplace facilitator are added together and reported on line 1, “North Carolina Gross Receipts,” and in the taxable “Receipts” column at the applicable rates of sales and use tax on the marketplace facilitator’s return.

Yes. Taxpayers seeking to file a separate return for its marketplace-facilitated sales should register for a second sales and use tax account identification number using the Department’s online business registration portal or by submitting the appropriate registration application.

A marketplace facilitator that is engaged in business in the state is the retailer responsible for maintaining records that establish a marketplace-facilitated sale subject to G.S. § 105-164.4J is exempt from sales and use tax. A marketplace seller is responsible for maintaining records that establish whether a sale the marketplace seller is liable for, such as a marketplace-facilitated sale not subject to G.S. § 105-164.4J, is exempt from sales and use tax.

A marketplace seller is not required to obtain a certificate of exemption for a marketplace-facilitated sale by a marketplace facilitator that is engaged in business in the state. The marketplace seller and marketplace facilitator should maintain any contract or agreement between the parties, the required monthly marketplace facilitator reports, and any other records that establish their sales and use tax liability.

A marketplace seller is responsible for maintaining records that establish whether a sale the marketplace seller is liable for, such as a direct sale or a marketplace-facilitated sale not subject to G.S. § 105-164.4J, is exempt from sales and use tax.

Liability relief is available to a marketplace facilitator only in a specific situation as provided in G.S. § 105-164.4J(d).  Refer to the Marketplace Facilitators and Marketplace Sellers Bulletin for additional details.