Sales Tax Changes for Bonanza

Hello, Bonanzlers! Recently, several states have added Marketplace Facilitator Provisions to their sales tax laws.

What is a marketplace facilitator? A marketplace facilitator is a business or organization that contracts with third parties to sell goods and services on its platform and aids retail sales of at least $250,000 during a 12-month period.

That's us! This means that Bonanza has sales tax nexus in those states, and is thereby responsible for calculating, collecting, and remitting tax for all sales made to buyers located in those states.

What is sales tax nexus? Sales tax nexus is the connection between a seller and a state that requires the seller to collect and remit tax on sales made in that state.

As a business owner selling on Bonanza, you are responsible for collecting taxes when applicable. However, as of June 17, 2019, Bonanza will collect and remit sales tax on seller's behalf for all transactions where the buyer is located in Alabama, Iowa, New Jersey, and Washington State. This is thanks to a partnership with TaxCloud.

We recommend all sellers consult a tax professional in their state to determine their tax obligations. In this page and throughout our site, Bonanza is not acting as a tax advisor and is not able to provide tax advice, but we do want to keep you updated about recent law changes that impact our site.

How is this different from how Bonanza has handled sales tax in the past?

Until these changes were enacted, Bonanza as a marketplace did not collect sales tax. Sellers had an option to set up sales tax rules in the Payments & Purchases tab of their booth, but we’ve always left it up to the seller to determine which tax rules apply to their business. Sellers were then responsible for remitting the tax funds to the relevant state. This process will remain unchanged for all states except for the ones named above. You are welcome to create tax rules in your booth for all other states. Any tax rules created for Alabama, Iowa, New Jersey, or Washington State will be overridden at checkout so that the tax is collected by Bonanza.

How will this impact checkout?

Historically, Bonanza has not been a party in transactions. Transactions have taken place strictly between the buyer and the seller, with the assistance of third-party payment providers (PayPal, Amazon Pay, or Stripe). Now, Bonanza needs to step in and collect sales tax during checkout. If your buyer is located in Alabama, Iowa, New Jersey, or Washington State, Bonanza will collect tax on the transaction. Our partner, TaxCloud, will calculate the tax amount based on the type of product, the buyer’s location, and the location from which the item is shipped.

What do I need to do to ensure my items can be purchased successfully?

1. Authorize Bonanza to collect taxes.

If you accept payments through PayPal, you will need to authorize Bonanza to collect the tax amount as a fee. For new sellers, this will be an automatic step in the booth activation process. For existing sellers, you can reauthorize your account here or in your booth settings.

If you accept payments through Amazon Pay, you will need to authorize Bonanza to collect the tax amount as a fee. For new sellers, this will be an automatic step in the booth activation process. For existing sellers, you can reauthorize your account here or in your booth settings.

If you accept payments through Stripe, no additional action is necessary, but please note that Bonanza will be collecting the tax amount as a fee when applicable.

2. Ensure you have specified the address from which your items ship.

The origin of the shipment is required in order to calculate the tax. You can add or edit that address here or in your booth settings.

3. Let us know how you manage your shipping costs.

There are two ways in which shipping costs can be taxed. The tax rate depends on whether the buyer is charged the exact cost of the shipment, or if the seller is using flat rate shipping or other methods that involve marking up the shipping cost. You will need to let us know which method you use so we can collect the correct amount of tax on your orders. You can add or edit that setting here.

You must take these actions on your account by June 17, 2019 or your booth may be placed on hold, or you may incur additional fees. 

Looking ahead

It’s likely that other states will enact Marketplace Facilitator Provisions, which will then require Bonanza to collect tax on additional transactions. We will notify sellers as soon as possible when these changes take effect. We’re working closely with our partners at TaxCloud to ensure we use the most up-to-date tax rates and regulations. Bonanza sellers are also welcome to use TaxCloud to manage their individual sales tax collection and remittance. Learn more about using TaxCloud for your business. We will continue to expand our integration with TaxCloud, making it easier for sellers to manage their tax collection — stay tuned for updates!


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