1. ​Who is a marketplace provider?


2. When is a marketplace provider required to collect and remit tax?


3. Are all marketplace providers required to collect and remit tax?


4. How do marketplace providers register to collect and remit tax in Wisconsin?


5. Does a marketplace provider file separate sales tax returns for each marketplace seller?


6. Is a marketplace provider required to notify marketplace sellers that it is collecting and remitting tax?


7. Is a marketplace provider required to maintain exemption certificates?


8. Can a marketplace provider claim a bad debt deduction on a sale facilitated on behalf of a marketplace seller?


9. If a marketplace provider charges additional fees for facilitating a sale, what amount is subject to tax?


10. Are marketplace providers required to collect and remit tax on sales of lodging services?


11. Can a marketplace provider request a waiver from collecting and remitting tax?


12. Is there an exception if the marketplace provider only has a distribution facility in Wisconsin?


13. Can a marketplace provider be audited for sales facilitated on behalf of a marketplace seller?


14. Can a marketplace provider that is a remote seller qualify for the small seller exception?


15. Is the marketplace provider required to collect and remit the tax if a marketplace seller is a remote seller that qualifies for the small seller exception?


16. Are marketplace providers required to collect county sales and use taxes?


17. Can a marketplace provider claim the retailer's discount on taxable sales made on behalf of a marketplace seller?


18. What is the effect on Wisconsin purchasers?


19. Is a marketplace provider only required to collect and remit tax on sales facilitated through an online marketplace?


20. Is a marketplace provider required to collect and remit tax on sales facilitated on behalf of a nonprofit organization that qualifies for the occasional sales exemption?


21. Can a marketplace provider sell and ship alcohol beverages to individual Wisconsin consumers?

1. Who is a marketplace provider?

   A marketplace provider is any person who facilitates a retail sale on behalf of another seller by listing or advertising for sale, in any manner, the seller's taxable products or services, and, who directly or indirectly, processes the payment from the purchaser, regardless of whether the person receives compensation or other consideration in exchange for their services.

2. When is a marketplace provider required to collect and remit tax?

   Prior to 2019 Wis. Act 10 taking effect, Wisconsin law provides that a marketplace that sells taxable products on behalf of a third-party seller is liable for Wisconsin sales or use tax on its Wisconsin sales. A marketplace is considered a retailer, as provided in sec. 77.51(13)(c), Wis. Stats., and liable for sales and use tax on taxable sales, unless the marketplace can show the tax was remitted by the third-party seller.
   

   The law change that takes effect on January 1, 2020 (2019 Wis. Act 10), clarifies that a marketplace provider is required to collect and remit Wisconsin sales or use tax on all sales of taxable products and services that the marketplace provider facilitates on behalf of a marketplace seller, as provided in secs. 77.52(3m)(a) and 77.523(1), Wis. Stats, and sec. Tax 11.555, Wis. Adm. Code.
   

   Note: A marketplace provider with no physical presence in Wisconsin (i.e., remote seller) is required to collect and remit Wisconsin sales or use tax on taxable sales made on behalf of a third-party seller on and after October 1, 2018, unless it qualifies for the small seller exception in sec. 77.51(13gm), Wis. Stats. See Remote Sellers – Wayfair Decision for additional information.

3. Are all marketplace providers required to collect and remit tax?

   All marketplace providers are required to collect and remit Wisconsin sales or use tax on all sales of taxable products and services in Wisconsin that are facilitated on behalf of marketplace sellers, as provided in sec. 77.523(1), Wis. Stats., unless the marketplace provider has been granted a waiver under sec. 77.52(3m)(b) or (c), Wis. Stats.

   See the answer to Question #11 for information on waivers for marketplace providers.

4. How do marketplace providers register to collect and remit tax in Wisconsin?

   Marketplace providers can register to collect and remit Wisconsin's sales or use taxes through either of the following methods:

   • Register directly with Wisconsin Department of Revenue – To register only for Wisconsin, use Wisconsin's online registration system. See the department's Common Questions for Sales and Use Tax Permits for additional information.
   
   
   • Register through Streamlined Sales Tax – To register for multiple states, including Wisconsin, submit a single application through the Streamlined Sales Tax Registration System. There is no fee to complete and submit this online registration. Upon completion of the registration, the marketplace provider will be registered to collect and remit sales and use tax in all 24 Streamlined member states, or the marketplace provider can pick and choose which of the member states it needs to be registered. Additional information is provided on the Streamlined Sales Tax Registration webpage and in the Streamlined Sales Tax Registration System FAQs.
   
   

   A marketplace provider may use a Certified Service Provider (CSP) to perform its sales or use tax responsibilities when registering through the Streamlined Sales Tax Registration System. CSPs are certified under the Streamlined Sales and Use Tax Agreement to perform all the marketplace provider's sales tax functions, other than the marketplace provider's obligation to remit tax on its own purchases. A CSP is designed to allow a business to outsource most of its sales tax administration responsibilities. If a remote seller registers through the Streamlined Sales Tax Registration System and contracts with a CSP to perform its sales and use tax functions (i.e., CSP Services), the CSP will file monthly sales and use tax returns on behalf of the marketplace provider. See the CSP FAQs for more information.

5. Does a marketplace provider file separate sales tax returns for each marketplace seller?

   No. A marketplace provider reports its sales, and the sales made on behalf of all of its marketplace sellers, on its own sales tax return.

6. Is a marketplace provider required to notify marketplace sellers that it is collecting and remitting tax?

   A marketplace provider is required to notify the marketplace seller that it is collecting and remitting Wisconsin sales or use tax, as provided in sec. 77.523(2), Wis. Stats. Wisconsin law does not prescribe a form or method required to provide such notification. However, the notification to the marketplace seller must indicate that the marketplace provider is collecting and remitting Wisconsin sales and use tax on all taxable sales in Wisconsin.

7. Is a marketplace provider required to maintain exemption certificates?

   A marketplace provider is required to obtain and maintain fully completed exemption certificates (S-211E, Form S-211, or Form S-211-SST) from purchasers claiming an exemption from Wisconsin sales or use tax for sales facilitated on behalf of a marketplace seller (sec. 77.52(14)(c), Wis. Stats., and sec. Tax 11.555(6)(b), Wis. Adm. Code). The marketplace provider is also required to obtain and maintain exemption certificates when the marketplace provider is making sales in Wisconsin on its own behalf to purchasers claiming an exemption.

8. Can a marketplace provider claim a bad debt deduction on a sale facilitated on behalf of a marketplace seller?

   A marketplace provider is allowed to claim a bad debt deduction on a sales transaction if it collects and remits Wisconsin sales or use tax on behalf of the marketplace seller, and either the marketplace provider or marketplace seller is eligible to claim the deduction under section 166 of the Internal Revenue Code for the worthless amount of the transaction (sec. 77.585(1g), Wis. Stats., and sec. Tax 11.555(6)(c), Wis. Adm. Code). A marketplace provider shall claim the bad debt deduction on its Wisconsin sales and use tax return for the period in which the marketplace provider or marketplace seller writes off the amount as uncollectible in its books and records and such amount is eligible to be deducted as a bad debt for federal income tax purposes.

   Note: If a marketplace provider claims a bad debt deduction on a transaction, the marketplace seller may not claim the bad debt deduction on that same transaction. See the answer to Marketplace Seller Common Question #8 for information on a bad debt deduction for marketplace sellers.

9. If a marketplace provider charges additional fees for facilitating a sale, what amount is subject to tax?

   A marketplace provider is required to collect and remit Wisconsin sales and use tax on the entire amount charged to a purchaser, including any amount charged by the marketplace provider for facilitating the sale, as provided in sec. 77.52(3m)(a), Wis. Stats.

10. Are marketplace providers required to collect and remit tax on sales of lodging services?

    A marketplace provider is required to collect and remit Wisconsin sales and use tax on all sales of taxable products and services, including sales of lodging services that it facilitates on behalf of a marketplace seller, unless the marketplace provider has been granted a waiver from collecting and remitting the tax by the department.

    2019 Wis. Act 10 reverses the effect of the decision in Orbitz, LLC vs. Wisconsin Department of Revenue, (Wisconsin Court of Appeals, District IV, February 11, 2016) and requires marketplace providers that sell lodging services to collect and remit sales or use tax on the entire amount charged to a purchaser, including any amount charged by the marketplace provider for facilitating the sale, as provided in sec. 77.52(3m)(a), Wis. Stats.

    Note: A marketplace provider that facilitates sales of lodging services may also be liable for certain taxes related to lodging services, including premier resort area taxes, local exposition taxes, and municipal room taxes. See Question #16 and Homeowners and Individuals Selling Short-Term Lodging for additional information.

11. Can a marketplace provider request a waiver from collecting and remitting tax?

    A marketplace provider may submit an application (Form S-102) to the department requesting a waiver from collecting and remitting Wisconsin sales or use tax if its only activities are facilitating sales of products or services on behalf of marketplace sellers that are operating under a hotel, motel, or restaurant brand name shared with the marketplace provider, as provided in sec. 77.52(3m)(b), Wis. Stats. The waiver may be granted if the department is satisfied that the marketplace seller will collect and remit the tax on the entire amount charged to the purchaser. See sec. Tax 11.555(4), Wis. Adm. Code.
    

    Note: The department may grant waivers to other types of marketplace providers, as provided in sec. 77.52(3m)(c), Wis. Stats., if there is evidence that the marketplace seller will reliably collect and remit the tax to the department.

    The application must identify the name and address of all marketplace sellers that the marketplace provider is requesting the waiver, along with each marketplace seller's Wisconsin sales or use tax permit number and any other information necessary to ensure the entire amount of tax will be collected and remitted by the marketplace seller. The department can require the marketplace provider to resubmit updated information at any time and if requested, the marketplace provider has 60 days from the written notice to supply the requested information.

    If a waiver is granted, each marketplace seller will be notified by the marketplace provider and/or the department that the marketplace provider has been granted a waiver from collecting and remitting Wisconsin sales or use tax by the department. The notification will identify the marketplace provider that has been granted the waiver and it will indicate that the marketplace seller is liable for the tax on the entire sales price charged to the purchaser for taxable products and services in Wisconsin through that marketplace provider.

12. Is there an exception if the marketplace provider only has a distribution facility in Wisconsin?

    2019 Wis. Act 10 repeals the exception in the law under sec. 77.51(13b), Wis. Stats., that certain retailers are not required to collect Wisconsin sales or use tax on sales made on behalf of third-party sellers if the retailer or one of its affiliates operates a distribution facility and has no locations (i.e., storefront) in which customers take possession of products. Additional information on the exception is provided in the July 2015 Special Edition of the Wisconsin Sales and Use Tax Report.

13. Can a marketplace provider be audited for sales facilitated on behalf of a marketplace seller?

    Only the marketplace provider can be audited and held liable for Wisconsin sale or use tax on sales facilitated on behalf of a marketplace seller, unless (1) the marketplace provider has been granted a waiver from collecting and remitting the tax by the department, or (2) the marketplace provider can demonstrate that the error in collecting and remitting the tax is due to insufficient or incorrect information provided by the marketplace seller.

14. Can a marketplace provider that is a remote seller qualify for the small seller exception?

    A marketplace provider with no physical presence in Wisconsin (i.e., remote seller) that makes or facilitates sales of taxable products and services in Wisconsin is required to register and collect Wisconsin sales or use tax unless it qualifies for the small seller exception in sec. 77.51(13gm), Wis. Stats. In determining if a marketplace provider qualifies for the small seller exception, the annual gross sales amount and number of transactions include sales into Wisconsin made by the marketplace on its own behalf or on behalf of other sellers.

    Note: Effective February 20, 2021, the small seller exception was amended to remove the number of transactions threshold.

    See Remote Sellers – Wayfair Decision for additional information.

15. Is the marketplace provider required to collect and remit the tax if a marketplace seller is a remote seller that qualifies for the small seller exception?

    A marketplace provider is required to collect and remit Wisconsin sales or use tax on sales of taxable products and services that it facilitates on behalf of a marketplace seller, regardless of whether the marketplace seller is a remote seller (i.e., has no physical presence in Wisconsin) that qualifies for the small seller exception.

16. Are marketplace providers required to collect other taxes?

    Marketplace providers must collect any applicable county and city (effective January 1, 2024) sales and use tax. See Wisconsin's Sales Tax Rate Chart.

    A marketplace provider may also be required to collect the following taxes administered by the department:

    • Premier Resort Area Taxes – Publication 403
    • Local Exposition Taxes – Publication 410
    • State Rental Vehicle Fee – Publication 202, Part 11.C.
    
    

    Premier resort area taxes – A marketplace provider must collect and remit premier resort area taxes to the department on sales facilitated on behalf of a marketplace seller that is classified under one of the Standard Industrial Classification (SIC) codes listed in the common questions for premier resort area tax, if the sales take place in a premier resort area.

    Municipal room tax – A marketplace provider that sells lodging services in Wisconsin may be liable for municipal room tax if the lodging is furnished in a municipality that administers a municipal room tax. Beginning October 1, 2021, a marketplace provider making sales subject to municipal room tax, must report the room tax directly to the municipality using the uniform municipal room tax return, Form RT-200. See Municipal Room Taxes, for more information.

17. Can a marketplace provider claim the retailer's discount on taxable sales made on behalf of a marketplace seller?

    A marketplace provider that is collecting and remitting Wisconsin sales or use tax is allowed the Wisconsin's retailer's discount, as provided in sec. 77.61(4)(c), Wis. Stats. In order to claim the retailer's discount, the return for the reporting period must be timely filed and paid by the marketplace provider. See the department's Common Questions for Retailer's Discount.

18. What is the effect on Wisconsin purchasers?

    The law has not changed with regards to purchasers. Purchasers owe use tax on the storage, use, or consumption of taxable products and services in Wisconsin, unless they can show an invoice from the seller with Wisconsin taxes properly collected and paid. As a result of 2019 Wis. Act 10, purchasers in Wisconsin may see an increased number of invoices from marketplace providers showing charges for Wisconsin sales and use tax.

19. Is a marketplace provider only required to collect and remit tax on sales facilitated through an online marketplace?

    A marketplace provider is required to collect and remit Wisconsin sales or use tax on all taxable sales facilitated on behalf of a marketplace seller, including taxable sales facilitated through a physical or electronic marketplace operated by the marketplace provider. For example, a convenience store that facilitates sales of taxable admissions at its physical location on behalf of a marketplace seller is required to collect and remit tax on such admissions.

20. Is a marketplace provider required to collect and remit tax on sales facilitated on behalf of a nonprofit organization that qualifies for the occasional sales exemption?

    Yes. The marketplace provider is required to collect and remit Wisconsin sales or use tax on taxable sales it facilitates on behalf of a nonprofit organization. Although the nonprofit organization's own sales may be an exempt occasional sale under sec. 77.54(7m), Wis. Stats., and sec. Tax 11.555(6)(e), Wis. Adm. Code., the exemption does not apply or extend to the marketplace provider.

    See the answer to Marketplace Seller Common Question #11 for information on occasional sales for nonprofit organizations.

21. Can a marketplace provider sell and ship alcohol beverages to individual Wisconsin consumers?

    A marketplace provider cannot sell and ship alcohol beverages directly to Wisconsin consumers, unless the marketplace provider manufactures and bottles wine and holds a wine direct shipper's permit under sec. 125.535, Wis. Stats. Permitted wine direct shippers must pay Wisconsin sales/use and excise taxes on the sale of wine that is shipped directly to Wisconsin consumers (sec. 139.035, Wis. Stats.).

Applicable Laws and Rules

This document provides statements or interpretations of the following laws and regulations enacted as of January 4, 2024: Subchapter III of Ch. 77, Wis. Stats., and sec. Tax 11.555, Wis. Adm. Code.

Laws enacted and in effect after this date, new administrative rules, and court decisions may change the interpretations in this document. Guidance issued prior to this date, that is contrary to the information in this document is superseded by this document, according to sec. 73.16(2)(a), Wis. Stats.