Sales Tax | Marketplaces
The marketplace collected it. You still report it.
When a marketplace collects and remits on your behalf, those sales still hit your books and still belong on your return, generally reported and then deducted rather than omitted. Settlement files are reconciled against your revenue so the two agree before anything is filed, and so facilitated sales are counted separately where nexus is concerned.
What the system does
Capability, input, output.
| Capability | Input | Output |
|---|---|---|
| Settlement import | Marketplace settlement files | Gross sales, fees, refunds and tax collected, split out rather than booked net |
| Revenue reconciliation | Settlements against your ledger | Differences surfaced per channel and per period, before a return is drafted |
| Facilitated split | Marketplace sales against direct sales | Counted separately, since states differ on how each affects nexus |
| Return treatment | Facilitated sales for the period | Reported and deducted in the states that require it, with the basis recorded |
| Fee and refund handling | Marketplace deductions | Booked as their own lines, so gross revenue is not understated by netting |
| Multi-channel view | Several marketplaces plus your own store | One revenue picture per state, rather than one per platform export |
-
Settlement import
- Input
- Marketplace settlement files
- Output
- Gross sales, fees, refunds and tax collected, split out rather than booked net
-
Revenue reconciliation
- Input
- Settlements against your ledger
- Output
- Differences surfaced per channel and per period, before a return is drafted
-
Facilitated split
- Input
- Marketplace sales against direct sales
- Output
- Counted separately, since states differ on how each affects nexus
-
Return treatment
- Input
- Facilitated sales for the period
- Output
- Reported and deducted in the states that require it, with the basis recorded
-
Fee and refund handling
- Input
- Marketplace deductions
- Output
- Booked as their own lines, so gross revenue is not understated by netting
-
Multi-channel view
- Input
- Several marketplaces plus your own store
- Output
- One revenue picture per state, rather than one per platform export
Marketplace FAQ
What buyers ask.
Amazon collects our sales tax. Why would we file at all?
Because collection and reporting are different obligations. In many states, facilitated sales still have to appear on your return as gross sales and then be deducted, and leaving them off entirely produces a return that does not tie to your revenue. If you also sell direct into that state, you certainly file.
Do marketplace sales count toward nexus?
It depends on the state, which is why they are counted separately here rather than blended. Some states include facilitated sales in the threshold measurement and some exclude them. With the two numbers held apart you can answer whichever way a state asks; with one blended figure you can answer neither.
Our settlement reports never match our books. Is that normal?
It is common, and it is usually netting. Settlements arrive with fees, refunds, chargebacks and promotional adjustments already deducted, so booking the deposit understates both revenue and cost. Splitting the components out is what makes the two reconcile, and it also fixes your margin reporting.
Can it handle several marketplaces plus our own store?
Yes, and that mix is where per-state reporting usually breaks down, because each platform exports a different shape. They are normalised onto one revenue picture per state so the return is drafted from one source rather than assembled from three.
What about tax the marketplace collected but got wrong?
Surfaced as a difference rather than absorbed. Where a facilitator collected on a sale you believe was exempt, or missed one you believe was taxable, that is a conversation to have with the platform and, if it matters, with your advisor. What the system will not do is quietly agree with the settlement file.
Reconcile your marketplace settlements to your books.
Connect your books, free. Settlement files are split into sales, fees and tax, and matched against the revenue in your ledger.