What is a Marketplace Facilitator Law?
A Marketplace Facilitator law is a law enacted by a state that places the burden to calculate, collect, and remit proper sales tax on the third party marketplace instead of the seller. In non-Marketplace Facilitator states, the burden will still fall on the seller (usually the restaurant) to calculate, collect, and remit proper sales tax.
What states have enacted Marketplace Facilitator Laws?
As of October 2019, over 30 states in the United States have enacted these laws. For details on whether Marketplace Facilitator Laws apply to your state, please reference your specific state legislature.
Do Rails partners qualify as Marketplace Facilitators?
Depending on the state, food delivery marketplaces qualify as marketplace facilitators. For more information regarding whether a particular marketplace partner is considered a marketplace facilitator, please contact the partner directly.
How does Olo handle tax?
The only information Olo has regarding tax is from the POS which we rely on brands to keep updated. Olo does not store information regarding taxable or non-taxable menu items, item level tax rates, or item level attributes such as whether an item is hot or cold. Olo recommends always keeping the tax rates up to date in the POS system for proper reporting.
For questions related to sales tax for Rails orders in Marketplace Facilitator states, please contact the Rails marketplace partner directly.
How do I know if the marketplace is paying the taxes?
This information should be available through the invoice you receive from the Rails partner. Olo doesn’t have visibility into that document and this information is not included in your Olo invoice. For more information about what you are or are not responsible for, please contact your 3rd party marketplace account manager directly.
Do I have to remit sales taxes or will the marketplace do that?
This depends on a few things. If you’re in a state where the marketplace facilitator laws have gone into effect, you may not have to remit the taxes directly and the marketplace may handle the tax payments on your behalf. To ensure you understand what you are or are not responsible for, please contact your 3rd party marketplace account manager directly.