Multistate Tax Commission Addressing Marketplace Facilitator Laws

The Supreme Court’s June 2018 Wayfair decision qualifies as historic, so it’s no surprise the ruling’s countless impacts and implications continue to play out in state legislatures and within state departments of revenue (DOR) 13 months after it was published. At last count, all but four states have so far taken actions in response to Wayfair.

While much of this activity has focused on adjusting existing sales tax laws and/or implementing new rules concerning Wayfair’s shift to economic nexus, states are also putting forth new statutes regarding the collection and remittance of sales tax by marketplace facilitators. These statutes do vary, which is a problem that has motivated the Multistate Tax Commission’s (MTC) Uniformity Committee to reconvene a workgroup to examine this lack of uniformity (and many related issues) and then engage with state DORs, taxpayers and professional service providers. I’ll be participating in the meetings of the Uniformity Committee’s Wayfair Implementation and Marketplace Facilitator workgroup – the first is slated for Aug. 6 – and will provide updates here. (Vertex is advocating for uniformity, as well as clear rules and definitions so both facilitators and sellers may efficiently comply with these new marketplace rules).

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The MTC is an intergovernmental state tax agency whose mission is “to achieve fairness by promoting compliance and consistent tax policy and practice, and to preserve the sovereignty of state and local governments over their tax systems.” The MTC’s Uniformity Committee was formed to help the commission achieve its fairness and consistency objectives by:

  1. Identifying areas in need of greater simplicity, fairness, and consistency;
  2. Encouraging greater voluntary compliance through taxpayer education and enhanced tax enforcement; and
  3. Fostering communication among state tax administrators, taxpayers, and tax practitioners.

The Wayfair Implementation and Marketplace Facilitator workgroup convened last year to examine what state DORs might consider when implementing new marketplace facilitator statutes. That work concluded with the publication last November of a comprehensive whitepaper detailing:

  • How new state laws might treat marketplace facilitators, including the imposition of a tax collection and remittance obligation on those sellers;
  • What issues might arise from having marketplace facilitators collect and remit tax; and
  • What best practices might address those issues.

However, as more states move forward with new marketplace facilitator laws, it has become clear that numerous issues now require additional attention. As such, the MTC Uniformity Committee is hoping to conclude its work in the late fall of 2019 with a whitepaper providing guidance to all interested stakeholders (legislators, DORs, and taxpayers) by the beginning of the 2020 legislative calendar.

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Michael J. Bernard, Chief Tax Officer – Transaction Tax at Vertex Inc. Vertex's Chief Tax Office (CTO) provides insight regarding the impact of tax regulations, policy, enforcement, and emerging technology trends on global tax department operations.

Michael J. Bernard

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Michael Bernard is the Chief Tax Officer of Transaction Tax. In his role, he provides insight and thought leadership around tax department operations, U.S. indirect tax, tax risk management, and tax policy, as well as emerging tax trends. He is an executive-level tax attorney with a diverse portfolio of experience in corporate tax, administration, and finance, including a substantive knowledge of U.S. and international tax laws.

Prior to joining Vertex, Michael was in various tax leadership roles at Microsoft Corporation for 28 years, the most recent being Senior Director – Tax Counsel. Michael led teams in the following functional areas: direct and indirect tax controversy, sales and use, business license, property, tax IT, SOX, and telecommunications. He also co-led a corporate taxpayer advocacy group with the Washington Department of Revenue and was a Director on the Board of the Washington Research Council. Michael has also testified before administrative and lawmakers at both the federal and state level.

Michael earned both a J.D. and a Bachelor of Science in Business Administration from Creighton University. He is a part-time lecturer of Law in the LLM program at the University of Washington School of Law. Michael also served on the board of directors, executive committee, and chaired committees for The Tax Executives Institute (TEI) for nearly 25 years.

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