Web Content Viewer

Marketplace Facilitators

Marketplace Facilitator

Pursuant to Am. Sub. H.B. 166, beginning September 1, 2019 (at the earliest), a marketplace facilitator with substantial nexus will be treated as the seller of all sales facilitated by the marketplace facilitator. As such, a marketplace facilitator with substantial nexus is required to register for a seller’s use tax license, collect tax from consumers, file returns with the Department, and remit the appropriate tax on all taxable retail sales made into Ohio that are facilitated by the marketplace facilitator.

What is a Marketplace Facilitator?

A marketplace facilitator is an entity, or an affiliate of an entity, that owns, operates or controls a marketplace (either physical or electronic) and facilitates the sales on that marketplace. An entity that only provides advertising services is not a marketplace facilitator.

Note: There is nothing in the statute that states that the new definition of a marketplace facilitator supersedes any previous definition of vendor or seller. These changes made to the Ohio statutes merely enhance Ohio’s collection abilities and may even overlap with previous definitions in statute.

What is a Marketplace Seller?

A seller who makes sales of goods or services to a consumer in Ohio facilitated by a marketplace facilitator, regardless of whether the seller has substantial nexus of its own or is a retailer with a physical presence in Ohio.

What is an Electronic Marketplace?

An electronic marketplace includes, but is not limited to, any of the following:

  • Digital Distribution Services
    • This term of art (and digital distribution platforms) are usually associated with music delivery services. As Ohio taxes specified digital products (which includes digital audio works), there may be significant services and platforms that will meet the definition of an electronic marketplace.
  • Digital Distribution Platforms
  • Online Portals
    • This provision will provide for many websites that offer for sale goods and services to meet the definition of an electronic marketplace.
  • Application Stores
  • Computer Software Applications
    • This provision will provide for many downloaded applications to individuals’ phones to meet the definition of an electronic marketplace.
  • In-app Purchase Mechanisms

What does it mean to Facilitate Sales?

A marketplace facilitator can facilitate (or enable) sales in several ways:

  1. First, a marketplace must be selling a taxable good that will be stored, used or consumed in Ohio or a service of which the benefit is received in Ohio. This excludes lodging by a hotel.
  2. Next, a marketplace facilitator must (directly or indirectly) do any of the following:
    • Advertise the taxable good or services;
    • Communicate the offer or acceptance of the sale;
    • Provide the infrastructure that connects the marketplace seller to the consumer;
    • Provides for fulfillment or storage services;
    • Sets the price of the sale;
    • Provides for customer service that assists in taking orders and organizing returns or exchanges of the goods or services;
    • Identify or brand the sale of goods or services as the marketplace facilitator’s sale; or
    • Provides the software development or R&D services of the aspects above;
  3. Finally, a marketplace facilitator must also (directly or indirectly) do any of the following:
    • Collect the price;
    • Provide for payment processing services;
    • Collect payment in connection with a third party and transmit that payment to the marketplace seller, regardless of whether the marketplace facilitator compensation or consideration for the service; or
    • Provide virtual currency.

A marketplace facilitator must do at least one activity from each of the three points above to be considered “facilitating” a sale on behalf of a marketplace seller.

Economic Presence Standard

Effective August 1, 2019*, Ohio law adopted a nexus standard that requires any marketplace facilitator without a physical presence in Ohio to obtain an Ohio seller’s use tax license, collect, and pay the applicable tax if the marketplace facilitator meets one or both of the following criteria in the current calendar year or the previous calendar year:

  • The marketplace facilitator has aggregate gross receipts into Ohio exceeding $100,000, including sales made on behalf of one or more marketplace sellers; or
  • The marketplace facilitator has an aggregate of 200 or more separate transactions into Ohio, including sales made on behalf of one or more marketplace sellers.

A marketplace facilitator must include transactions made on its own behalf and transactions facilitated on behalf of their marketplace sellers when making the determination as to whether the economic thresholds apply.

* The statute regarding a marketplace facilitator allows a period of 30 days from when the economic presence standard is met to be required to collect and remit tax so the earliest a marketplace facilitator is required to collect and remit Ohio tax is September 1, 2019.

Note – Any person or business that has a physical presence in Ohio and makes taxable retail sales must be registered with the Department. These minimum thresholds do not apply to any business with a physical presence in Ohio.

Collection, Filing, and Remitting Requirements


Ohio law requires any out-of-state person or business, including a marketplace facilitator, making or facilitating retail sales of tangible personal property or taxable services into Ohio to register for a seller’s use tax license once substantial nexus is met. A marketplace facilitator should register for a separate seller’s use tax account to collect and remit Ohio tax for third-party sales they facilitate through the marketplace. A marketplace facilitator should also maintain a seller’s use tax account for its own sales to Ohio consumers. Registration is available through the Ohio Business Gateway or the Streamlined Sales Tax Project.

Ohio Business Gateway — Marketplace facilitators may obtain a seller’s use tax license immediately through the Ohio Business Gateway (Gateway). Businesses must first establish an account with Gateway before using it to request a seller’s use tax license.

Streamlined Sales Tax Registration System – Marketplace facilitators may register for multiple states, including Ohio, by submitting a single application through the Streamlined Sales Tax Registration System.

When completing a registration form, business owners will need to know where their company falls within the North American Industry Classification System (NAICS). Click here for a partial list of NAICS codes. For more information on NAICS, visit the U.S. Census Bureau. Please note – a marketplace facilitator should choose NAICS code 454110 (electronic shopping & mail order houses) on the seller’s use tax registration that will be used to report third-party sales.

Effective Date

Collection, filing, and remitting requirements for marketplace facilitators begin on the first day of the first month that is at least 30 days after the marketplace facilitator establishes substantial nexus and applies prospectively from that date.

Example – A marketplace seller who makes its 200th transaction into Ohio on December 15, 2019 must begin collecting and remitting tax on taxable sales made to Ohio customers beginning February 1, 2020. The first sales tax return is due March 23, 2020 based on the dates in this example.

Return Filing/Payment

Due Dates for Monthly Returns

Monthly sales tax returns are due by the 23rd of the following month from the period filed.

Example – August 1 through August 31 return is due September 23rd.

Filing Sales Tax Returns

A marketplace facilitator who facilitates third-party sales as well as direct sales to Ohio consumers should maintain two seller’s use tax accounts and file a return for each account. Separate records for direct sales versus facilitated sales should be maintained.

All returns must be filed electronically. Taxpayers may file returns through the Ohio Business Gateway. Alternatively, taxpayers can contract with a Certified Service Provider (CSP) to file the Simplified Electronic Return (SER) through Streamlined Sales Tax.For more information on Streamlined Sales Tax, please visit their website.

A marketplace facilitator that has substantial nexus is deemed to be the seller and is liable for all sales made by the marketplace facilitator on behalf of one or more marketplace sellers.

Payment of Sales Tax

Taxpayers have several options for remitting the tax collected from customers.

ACH Debit – is available through the Ohio Business Gateway. This is also known as payment by "electronic check."

Credit Card - The Department offers credit card payment options in cooperation with ACI Payments Corporation. Credit card payments may be made via phone, Internet, or the Ohio Business Gateway. For more information, please click here.

* A convenience fee does apply.

ACH Credit - The Department also offers taxpayers the option of remitting tax by ACH credit. Taxpayers interested in this option must first register with the Treasurer of State at eft.tos.ohio.gov. Please call (877) 338-6446 for more information.

Destination Sourcing

Ohio retains origin sourcing for most sales of tangible personal property made by Ohio vendors to Ohio consumers. See ST 2009-03 - Sales and Use Tax: Sourcing – Issued December 2009; Updated July 2020 for additional information. However, R.C. 5741.05 requires marketplace facilitators to source sales they facilitate (other than sales of titled motor vehicles, titled watercraft, or titled outboard motor) to the location where the consumer receives the property or service that is sold.

Other Resources

Please call the Department at 1-888-405-4039 to obtain more information on substantial nexus and/or marketplace facilitator statutes.

Additional Resources

Additional Resources