A marketplace facilitator is required to collect North Dakota sales and use taxes, as well as local taxes, on North Dakota sales made on its marketplace.
- Marketplace facilitators with physical nexus in North Dakota are required to collect and remit sales and use tax.
- Marketplace facilitators without physical nexus in North Dakota must have taxable sales exceeding $100,000 in the current or prior calendar year before they are required to collect and remit sales and use tax.
A marketplace facilitator is responsible for collecting North Dakota tax if it meets the following criteria:
- Contracts with sellers to facilitate for consideration the sale of a seller’s product through a marketplace.
- Engages, directly or indirectly, in one or more of the following activities:
- Transmitting or otherwise communicating the offer or acceptance between the buyer and seller
- Owning or operating the electronic or physical technology or infrastructure that brings the buyers and sellers together
- Providing a virtual currency that buyers are allowed or required to use to purchase products from the seller
- Conducting research and development activities related to contracting with sellers to facilitate the sale of their products through a marketplace
- Participates in one or more of the following activities, directly or indirectly, with respect to the marketplace seller's products:
- Payment processing services
- Fulfillment or storage services
- Listing products for sale
- Setting prices
- Branding sales as those of the marketplace facilitator
- Taking orders
- Advertising or promotion
- Providing customer service
- Accepting or assisting with returns or exchanges
A marketplace facilitator does not include a payment processor business chosen by a seller to handle payment transactions, such as credit or debit cards, and whose sole activity with the marketplace sales is to handle payment transactions between the seller and the purchaser.
Note: Sales tax is calculated based on the North Dakota location where the sale is delivered. Refer to our Local Sales Tax Rate Locator to determine the correct tax rate.
If you have questions about whether you qualify as a marketplace facilitator or your responsibilities as a marketplace seller, please contact our Sales Tax Compliance Section at 701-328-1246 or email@example.com.
A marketplace is a physical or electronic place where one or more marketplace sellers sell or offer for sale tangible personal property or other products or services subject to North Dakota sales or use tax. Examples of a physical or electronic place are a store, booth, internet website, catalog, television or radio broadcast, or a dedicated sales software application.
A marketplace seller is a seller that sells or offers for sale tangible personal property or other products or services subject to North Dakota sales or use tax through a marketplace that is owned, operated, or controlled by a marketplace facilitator.
A marketplace facilitator without physical nexus in North Dakota, that reaches the $100,000 threshold for the first time in the current calendar year must register and begin collecting tax within 60 days after reaching the threshold or on January 1 of the following calendar year, whichever is earlier. To determine whether the $100,000 threshold is met, the marketplace facilitator includes all taxable sales made through the marketplace, including those sales made on its own behalf.
A marketplace facilitator making or facilitating sales to North Dakota purchasers, including sales made on behalf of marketplace sellers, is a seller required to obtain a North Dakota Sales and Use Tax Permit and to collect tax if the facilitator:
- Has a physical presence within North Dakota, or
- Has no physical presence within North Dakota, but makes more than $100,000 in taxable sales through the marketplace in the current or prior calendar year. Taxable sales include all taxable sales of products or services through the marketplace on behalf of all sellers.
Certification to Marketplace Sellers
Marketplace facilitators required to register and collect sales and use taxes in North Dakota must certify to each marketplace seller that it will collect and remit all state and local sales and use taxes.
A marketplace seller that received written certification from the marketplace facilitator is no longer liable for tax on sales made through that marketplace. If a marketplace seller has a valid North Dakota sales and use tax permit, the seller should not report sales made through a marketplace if the facilitator has certified its responsibility to collect and remit tax.
When a marketplace facilitator receives its North Dakota sales and use tax permit, the facilitator will be assigned a return filing frequency. North Dakota sales and use tax returns must be filed on the assigned filing frequency even if there are no sales or tax to report.
Sales tax permit holders file through ND TAP and will receive an email notification when each electronic return is available to be filed.