Beginning on July 1, 2019, “marketplace facilitators” must register and collect Indiana sales tax on behalf of their sellers for transactions into Indiana. In some cases, marketplace facilitators may also need to collect County Innkeepers Tax (CIT) and Food and Beverage (FAB) taxes.
Marketplace facilitators are businesses or people who: (1) own, operate, or otherwise control a “marketplace;” and (2) facilitate a retail transaction. Marketplaces can be either physical or electronic. The seller’s products may include tangible personal property, specified digital products, rooms, lodgings, or accommodations, or enumerated services.
A “marketplace” means a business that is:
- Listing, making available, or advertising products.
- Transmitting or otherwise communicating an offer or acceptance of a retail transaction of products between a seller and a purchaser.
- Providing or offering fulfillment or storage services for a seller.
- Setting prices for the seller’s products.
- Providing or offering customer service to a seller or a seller’s customers, or accepting or assisting with collecting and taking orders, returns, or exchanges of products sold by a seller.
- Branding sales as those of the marketplace facilitator.
Marketplaces facilitate transactions when they do any of the following on behalf of a seller:
- Collect the sales price or purchase price of the seller’s products.
- Provide access to payment processing services, either directly or indirectly.
- Charging, collecting, or otherwise receiving fees or other consideration for transactions made on its electronic marketplaces.
The term “marketplace facilitator” does not include a payment processor business that is appointed by a merchant to handle payment transactions from various channels (including credit cards and debit cards).
Unlike most other businesses, marketplace facilitators should not use INBiz at this time. Marketplace facilitators should complete and submit Form BT-1 — Business Tax Application to DOR in order to register for sales tax was well as CIT and FAB taxes (as applicable). Marketplace facilitators should not register directly with counties that self-collect CIT.
Marketplace facilitators should list all adopting counties and municipalities from which it picks-up food and beverages in Box #2, Section D on Form BT-1. This differs from the instructions for caterers requiring the listing of delivery locations. Marketplace facilitators are required to file a monthly return in INTax for each adopting county or municipality listed in Box #2 regardless as to whether they facilitated any food and beverage sales from that locality for that month.
When registering to file CIT returns, marketplace facilitators do not need to register separately for each adopting county. DOR will automatically register marketplace facilitators for all adopting counties once the initial registration is complete. However, marketplace facilitators are only required to file a CIT return in INtax for only the counties and periods in which the marketplace facilitator conducted a transaction in that county.
Indiana’s current sales tax rate is 7%. For more information, including FAB and CIT tax rates, please see the following documents in DOR’s Tax Library.
- Sales Tax Information Bulletin #89: Registration, Collection, and Remittance Requirements for Remote Sellers and Marketplace Facilitators
- Sales Tax Information Bulletin #11: Application of Sales Tax to Restaurant Owners Including Fast Food Operations and Caterers
- Sales Tax Information Bulletin #29: Sales of Food
- Commissioner’s Directive #30: Local Food and Beverage Taxes
- Departmental Notice #40: County Innkeeper’s Taxes
- Information Bulletin #41: Sales Tax Application to Furnishing of Accommodations