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Idaho H.B. 239 Would Require Remote Sellers and Marketplace Facilitators to Collect Sales Taxes

H.B. 239 was introduced unanimously in the Idaho House Revenue & Taxation Committee on March 5, 2019.

The Bill would impose a sales tax collection obligation on any retailer without a physical presence in Idaho that has more than $100,000 in cumulative gross receipts from sales delivered into Idaho in the previous or current calendar year.

It would also require "marketplace facilitators" to collect and remit tax for all "marketplace sellers". This collection requirement would apply to any marketplace facilitator with a physical presence in Idaho (such as a warehouse or distribution center), as well as any remote marketplace facilitator that has more than $100,000 in combined sales into the state (its own and those by its sellers).

As provided within the Bill, "the term "marketplace facilitator" means a person that contracts with sellers to facilitate for consideration, including the deduction of fees from a transaction, the sale of the seller's products through a physical or electronic marketplace operated by the person, and engages:

(1) Directly or indirectly, through one (1) or more affiliated persons, in any of the following:

(a) Transmitting or otherwise communicating the offer or acceptance between the buyer and seller;

(b) Owning or operating the infrastructure, electronic or physical, or the technology that brings buyers and sellers together;

(c) Providing a virtual currency that buyers are allowed or required to use to purchase products from the seller; or

(d) Software development or research and development activities related to any of the activities described in subsection (2) of this section, if the activities are directly related to a physical or electronic marketplace operated by the person or an affiliated person; and

(2) In any of the following activities, with respect to the seller's 2 products:

(a) Payment processing services;

(b) Fulfillment or storage services;

(c) Listing products for sale;

(d) Setting prices;

(e) Branding sales as those of the marketplace facilitator;

(f) Taking orders;

(g) Advertising or promotion; or

(h) Providing customer service or accepting or assisting with returns 11 or exchanges."

Taxing remote sales and requiring marketplace facilitators to collect sales tax on all marketplace transactions is expected to generate $30 million in sales and use tax revenue for the state in fiscal year 2020, and $34.5 million in fiscal year 2021.

If enacted, it would take effect July 1, 2019.

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