Recent court rulings, such as South Dakota v Wayfair, and newly enacted legislation have vastly changed the sales tax landscape in America. In addition to the expanded nexus rulings allowing states to assess tax based on an economic presence rather than a physical presence, many states have also created an obligation for marketplace facilitators to collect and remit sales tax on behalf of the third party merchants that operate through their platforms.

What is a Marketplace Facilitator?

The definition of a Marketplace Facilitator varies by jurisdiction, but in general, a Marketplace Facilitator is broadly defined as any person (or business entity) that facilitates a sale for a third party seller through an online marketplace or platform by both offering the items for sale and collecting the proceeds of the sale from the purchaser.

What deals are affected?

Third party sales of goods through Groupon’s marketplace platform (also referred to as “Groupon Goods Marketplace” (formerly “Groupon Stores”)) are subject to marketplace facilitator tax collection. Although many states limit the scope to sales involving tangible personal property, certain states have expanded the scope of their laws to include services and there is a possibility that other Groupon business lines will be affected in the future. 

What will Groupon be responsible for?

Groupon will be responsible for calculating sales tax at the point of order, collecting the sales tax from the customer, and ultimately remitting the sales tax to the appropriate taxing authority. Groupon will be responsible for maintaining its own books and records to support these transactions.

What are the merchants responsible for?

In marketplace states (listed below), the merchant will not be responsible for collecting tax as Groupon will automatically collect on their behalf. For any other jurisdiction, the merchant is responsible for updating their tax nexus settings in their corresponding Avalara account. Through Groupon’s partnership with Avalara, merchants will have the ability to collect tax on their marketplace sales through Groupon’s platform. The merchant will still be ultimately responsible for remitting the tax to the applicable taxing authorities.

Groupon will be responsible for the calculation, collection and remittance of sales tax in the following states:

• Alabama - January 1, 2019

• Arkansas - July 1, 2019

• Arizona - October 1, 2019

• California - October 1, 2019

• Colorado - October 1, 2019

• Connecticut - December 1, 2018

• District of Columbia - April 1, 2019

• Florida - July 1, 2021
  

• Georgia - April 1, 2020
  

• Hawaii - January 1, 2020

• Idaho - June 1, 2019

• Illinois - January 1, 2020

• Iowa - January 1, 2019

• Indiana - July 1, 2019

• Kansas - July 1, 2021
  

• Kentucky - July 1, 2019

• Louisiana - July 1, 2020
  

• Maine - October 1, 2019

• Massachusetts - October 1, 2019

• Maryland - October 1, 2019

• Michigan - January 1, 2020
  

• Minnesota - October 1, 2018

• Mississippi - July 1, 2020
  

• Missouri - January 1, 2023
  

• Nebraska - April 1, 2019

• Nevada - October 1, 2019

• New Jersey - January 1, 2019

• New Mexico - July 1, 2019

• New York - June 1, 2019

• North Carolina - February 1, 2020
  

• North Dakota - October 1, 2019

• Ohio - August 1, 2019

• Oklahoma - January 1, 2019

• Pennsylvania - January 1, 2019

• Rhode Island - June 27, 2019

• South Carolina - November 1, 2018

• South Dakota - March 1, 2019

• Texas - October 1, 2019

• Tennessee - October 1, 2020
  

• Utah - October 1, 2019

• Vermont - June 1, 2019

• Virginia - July 1, 2019

• Washington - January 1, 2019

• West Virginia - July 1, 2019

• Wisconsin - January 1, 2020
  

• Wyoming - July 1, 2019

Please note that this list is subject to change without notice.

While Groupon is committed to helping our merchants understand the tax changes, merchants should contact a legal, tax or other professional adviser to understand the specific reporting requirements placed on your business.