Explanation of Terms – Online Sellers

Economic nexus

As of June 1, 2019, retailers without a physical presence in Idaho (out of-state retailers) must collect Idaho sales tax if their sales in Idaho exceed $100,000 in the current or previous calendar year.

Marketplace facilitators

A marketplace facilitator is a person that provides a marketplace for third-party sellers. You’re a marketplace facilitator if you meet all three of the following criteria:

  1. You contract with third-party sellers to help them sell their products through a physical or electronic marketplace.
  2. You receive consideration for performing the contract (consideration payment, benefit, or even deduction of fees from a transaction).
  3. You engage, directly or indirectly, in any of the following:
    1. With respect to the seller’s product, you:
      1. Provide payment processing services
      2. Provide fulfillment or storage services
      3. List products for sale, set prices, or take orders
      4. Brand sales as those of the marketplace facilitator’s
      5. Advertise, promote, provide customer service (including help with returns or exchanges)
    2. You communicate the offer or the acceptance of the offer between buyer and seller.
    3. You own or operate the infrastructure (physical or electronic) or the technology that brings a buyer together with a seller.
    4. You provide a virtual currency that buyers use to purchase products from sellers.
    5. You or an affiliated person conduct software development or research and development described in section 3.a. (above) if the activities are directly related to a physical or electronic marketplace you operate for third-party sellers.

Physical presence

If you make sales in Idaho, you’re required to collect Idaho sales tax on those sales if you have a physical presence in the state (whether permanent or temporary). This includes:

  • Having an office, warehouse, sales or sample room, or storage place
  • Maintaining a stock of goods
  • Renting or leasing property (other than real property) to a customer who uses the property in Idaho
  • Servicing tangible personal property in Idaho
  • Having a salesman, agent, or representative who comes to Idaho to sell, deliver, install, or take orders. (It doesn’t matter whether the salesman, agent, or representative is your employee or lives in Idaho or another state.)

Presence also can be established by the relationship of one business to another that’s doing business in Idaho. See Idaho Code section 63-3615A.

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