In June 2018, a US Supreme Court decision ruled that physical presence in a state was no longer required for a state to impose sales tax obligations on retailers. Simply put, if a company does business in a state via an online business, it can be required to collect taxes.
With this ruling, Marketplace Facilitator and Remote Seller laws are rapidly becoming more common across the United States and are imposing changes in how taxes work online. We know that tax changes can be confusing, so we’d like to outline what we’re doing to handle tax collection on Discogs. As always, our goal is to make it as easy as possible for you to run your business.
How Does The New Tax Law Affect You?
Starting July 1, Discogs is implementing a sales tax calculation on transactions where the buyer is located in the US. In states governed by Marketplace Facilitator (MPF) laws that apply to Discogs, this sales tax will be required, and Discogs will be responsible for collection and remittance. In other states, sellers who qualify under the Remote Seller laws, will need to make their own determination of whether or not to apply sales tax to transactions. Please consult a tax advisor to better understand your specific tax situation.
To help sellers with managing US state sales taxes, Discogs is launching a new feature where you can view MPF states as well as toggle on/off additional states where you determine it is necessary to add sales tax. You will be able to find the new tool in your seller settings starting July 1.
How can I learn more?
For more information on these new tax requirements, please reference our help article and consult with your tax advisor.
Thank you for being an important part of the Discogs community!