North Dakota’s marketplace facilitator sales tax law, explained
by March 9, 2024
Please note: This blog was originally published in 2019. It’s since been updated for accuracy and comprehensiveness.
The state of North Dakota requires marketplaces to collect sales tax on behalf of sellers on online marketplaces like Amazon and eBay.
This means that if you sell on a platform like Amazon, then Amazon will collect sales tax from your North Dakota buyers on your behalf, and remit it to the state.
But as usual, there are always a few wrinkles here when it comes to e-commerce sales tax.
This post will explain what online sellers need to know about the North Dakota marketplace facilitator law, and answer your frequently asked questions.
Overview of the North Dakota marketplace facilitator law
North Dakota’s marketplace facilitator law states that marketplace facilitators in North Dakota collect sales and use taxes (and all applicable city and county local option taxes) on North Dakota sales made on its marketplace if the marketplace’s taxable sales into the state exceed $100,000 in the current or prior calendar year.
Quick facts about the North Dakota marketplace facilitator law
- Effective date: October 1, 2019
- Threshold: North Dakota’s marketplace facilitator law states that marketplace facilitators in North Dakota collect sales and use taxes (and all applicable city and county local option taxes) on North Dakota sales made on its marketplace if the marketplace’s taxable sales into the state exceed $100,000 in the current or prior calendar year.
- State law information: Read the full text of the North Dakota Marketplace Facilitator Law
- Marketplaces that have adopted this law:
Frequently asked questions about marketplace facilitator laws
What exactly is a marketplace facilitator in North Dakota?
A marketplace is a physical or electronic place where one or more marketplace sellers sell or offer for sale tangible personal property or other products or services subject to North Dakota sales or use tax. Examples of a physical or electronic place are a store, booth, internet website, catalog, television or radio broadcast, or a dedicated sales software application.
A marketplace seller is a retailer that sells or offers for sale tangible personal property or other products or services subject to North Dakota sales or use tax through a marketplace that is owned, operated, or controlled by a marketplace facilitator.
Online sales platforms like Amazon and eBay are considered marketplace facilitators under North Dakota law.
Does this mean I can stop collecting North Dakota sales tax?
Marketplace facilitators required to register and collect sales and use taxes in North Dakota must certify to each marketplace seller that it will collect and remit all state and local sales and use taxes.
A marketplace seller that received written certification from the marketplace facilitator is no longer liable for tax on sales made through that marketplace. If a marketplace seller has a valid North Dakota sales and use tax permit, the seller should not report sales made through a marketplace if the facilitator has certified its responsibility to collect and remit tax.
Marketplace facilitator laws only cover marketplaces. The state still requires that merchants collect sales tax from buyers via sales channels where the marketplace facilitator laws do not apply.
Does this mean I can cancel my North Dakota sales tax permit?
No, marketplace-only sellers should not cancel their sales tax permits.
Do I still need to file a North Dakota sales tax return?
When a marketplace facilitator receives its North Dakota sales and use tax permit, the facilitator will be assigned a return filing frequency. North Dakota sales and use tax returns must be filed on the assigned filing frequency even if there are no sales or tax to report.
Be cautious here. If you are registered for a sales tax permit and do not file, the state can assess penalties even though you don’t have any sales tax to remit! We have, unfortunately, talked to too many sellers who have found this out the hard way when a tax penalty bill arrives.
What do I do with any North Dakota sales tax I have already collected?
If you have already collected North Dakota sales tax from buyers, it is vital that you remit that amount to the state. The only way to get in serious criminal trouble in sales tax is to collect sales tax from buyers on the state’s behalf but keep it in your own pocket.
Does TaxJar handle this for me?
Yes.
TaxJar AutoFile handles North Dakota sales tax automatically
TaxJar AutoFile automatically compiles your sales tax data the way the state of North Dakota wants it filed. For example, many states, North Dakota included, want sellers to break down their sales tax collected interstate (sales originating in North Dakota sent to another state) and intrastate (sales made from North Dakota to North Dakota.)
If a marketplace has collected sales tax on your behalf, TaxJar reports that directly to the state so that the state is aware you have met your sales tax obligations.
If you currently AutoFile your North Dakota sales tax returns, you don’t need to do a thing. It’s handled!
TaxJar reports give you all the info you need to file manually
If you prefer to file manually, your TaxJar Reports also reflect what the North Dakota Office of State Tax Commissioner wants to see on your tax return.
Also don’t worry that you will double pay. TaxJar accounts for sales tax collected on your behalf, and only shows you the amount you owe to the state out of your pocket.
Further reading on North Dakota sales tax and marketplace facilitator laws:
- TaxJar’s Marketplace Facilitator FAQ
- State by State: Marketplace Facilitator Laws Explained
- North Dakota Sales Tax Guide for Businesses
