                                 CODE OF VIRGINIA

TAX COLLECTIBLE FROM MARKETPLACE FACILITATORS; &#8220;MARKETPLACE
FACILITATOR&#8221; DEFINED (§ 58.1-612.1)

A. As used in this chapter:
			&#8220;Marketplace facilitator&#8221; means a person that contracts with a
marketplace seller to facilitate, for consideration and regardless of whether
such consideration is deducted as fees from transactions, the sale of such
marketplace seller&#8217;s products through a physical or electronic marketplace
operated by such person. &#8220;Marketplace facilitator&#8221; does not include
a payment processor business appointed by a merchant to handle payment
transactions from various channels, such as credit cards and debit cards, and
whose sole activity with respect to marketplace sales is to handle transactions
between two parties. &#8220;Marketplace facilitator&#8221; does not include a
platform or forum that exclusively provides internet advertising services,
including any advertisements that may list products for sale, so long as such
platform or forum does not also engage directly or indirectly through one or
more commonly controlled persons, as defined in subsection D of &#xA7; 58.1-612,
in the activities described in subsection C.
			&#8220;Marketplace seller&#8221; means a person that is not a commonly
controlled person, as defined in subsection D of &#xA7; 58.1-612, to a
marketplace facilitator and that makes sales through any physical or electronic
marketplace operated by such marketplace facilitator, even if such seller would
not have been required to collect and remit sales and use tax had the sale not
been made through such marketplace.

B. The tax levied under this chapter shall be collectible from all persons that
are marketplace facilitators that have sufficient contact with Virginia to
require registration under subsection C.

C. A marketplace facilitator shall be deemed to have sufficient activity within
the Commonwealth to require registration under § 58.1-613 if it meets at least
one requirement in each of subdivisions 1, 2, and 3:

   1. It engages, either directly or indirectly, through a commonly controlled
   person as defined in subsection D of &#xA7; 58.1-612 in any of the following
   activities:
   				a. Transmitting or communicating an offer or acceptance between a
   purchaser and a marketplace seller;
   				b. Owning or operating the infrastructure, whether electronic or physical,
   or technology that brings purchasers and marketplace sellers together; or
   				c. Providing a virtual currency that purchasers are allowed or required to
   use to purchase products from the marketplace seller;

   2. It engages in any of the following activities with respect to a marketplace
   seller&#8217;s products:
   				a. Payment processing;
   				b. Fulfillment or storage;
   				c. Listing products for sale;
   				d. Setting prices;
   				e. Branding sales as those of the marketplace facilitator; or
   				f. Providing customer service or accepting or assisting with returns or
   exchanges; and

   3. It establishes economic nexus through either of the following activities:
   				a. Facilitating sales in Virginia that, in the aggregate, generate more
   than $100,000 in gross revenue, or other minimum amount as may be required by
   federal law, for such marketplace facilitator. A marketplace facilitator may
   exceed this threshold based on sales for either the previous or current
   calendar year. In determining the amount of a marketplace facilitator&#8217;s
   gross revenues, the sales made by all commonly controlled persons, as defined
   in subsection D of &#xA7; 58.1-612, shall be aggregated; or
   				b. Facilitating 200 or more separate retail sale transactions, or other
   minimum amount as may be required by federal law, in the Commonwealth in the
   previous or current calendar year. In determining the total number of retail
   sales transactions attributable to a marketplace facilitator, the sales made
   by all commonly controlled persons, as defined in subsection D of &#xA7;
   58.1-612, shall be aggregated.

D. 1. A marketplace facilitator shall be considered a dealer for purposes of
this chapter and shall collect the tax imposed by this chapter on all
transactions that it facilitates through its marketplace.

   2. No marketplace seller shall collect sales and use tax on a transaction made
   through a marketplace facilitator&#8217;s marketplace.

   3. Notwithstanding the provisions of subdivisions 1 and 2, the Department
   shall allow for a waiver from the requirements of subdivisions 1 and 2 if a
   marketplace facilitator demonstrates, to the satisfaction of the Commissioner,
   that either (i) all of its marketplace sellers already are registered dealers
   under &#xA7; 58.1-613 or (ii) the marketplace seller has sufficient nexus to
   require registration under &#xA7; 58.1-613 and that collection of the tax by
   the marketplace facilitator for such marketplace seller would create an undue
   burden or hardship for either party. If such waiver is granted, the tax levied
   under this chapter shall be collectible from the marketplace seller. The
   Department shall develop guidelines that establish (a) the criteria for
   obtaining a waiver pursuant to this section, (b) the process and procedure for
   a marketplace facilitator to apply for a waiver, and (c) the process for
   providing notice to an affected marketplace facilitator and marketplace seller
   of a waiver obtained pursuant to this subdivision.

E. A marketplace facilitator shall be relieved from liability, including
penalties and interest, for the incorrect collection or remittance of sales and
use tax on transactions it facilitates or for which it is the seller if the
error is due to reasonable reliance on (i) an invalid exemption certificate
provided by the marketplace seller or the purchaser; (ii) incorrect or
insufficient information provided by the Commonwealth; or (iii) incorrect or
insufficient information provided by the marketplace seller or purchaser
regarding the tax classification or proper sourcing of an item or transaction,
provided that the marketplace facilitator can demonstrate it made a reasonable
effort to obtain accurate information from the marketplace seller or purchaser.
The relief from liability afforded to the marketplace facilitator pursuant to
this subsection shall not exceed the total amount of tax due from the
marketplace facilitator on the incorrect transaction independent of any
penalties or interest that would have otherwise applied. Any deficiency
resulting from incorrect information provided by the marketplace seller or as
the result of an audit shall be the liability of the marketplace seller.

F. A marketplace facilitator is the sole entity subject to audit by the
Department for sales and use tax collection for all transactions facilitated by
the marketplace facilitator unless (i) the marketplace facilitator can
demonstrate that its failure to collect the proper tax was due to incorrect
information provided by the marketplace seller or (ii) the marketplace seller is
subject to a waiver granted pursuant to subdivision D 3.

G. If a marketplace facilitator lacks physical presence in the Commonwealth and
has both facilitated and made direct sales into the Commonwealth, both types of
sales shall be considered in determining whether it has established economic
nexus.

H. When a marketplace seller that is not otherwise required to register for the
collection of the tax under any of the provisions contained in subdivisions C 1
through 9 of &#xA7; 58.1-612 makes both direct sales and sales on a marketplace
facilitator&#8217;s marketplace, only the marketplace seller&#8217;s direct
sales shall be considered in determining whether the marketplace seller is
required to register for the collection of the tax under subdivision C 10 or 11
of &#xA7; 58.1-612.

I. No class action shall be brought against a marketplace facilitator in any
court of the Commonwealth on behalf of customers arising from or in any way
related to an overpayment of sales and use tax collected on sales facilitated by
the marketplace facilitator, regardless of whether such claim is characterized
as a tax refund claim. Nothing in this subsection shall affect a
customer&#8217;s right to seek a refund on an individual basis.

HISTORY: 2019, cc. 815, 816, 854.