Digital goods marketplace compliance

Research steps and summary:Steps taken:1) Performed broad web searches and scraped authoritative sources covering: marketplace facilitator laws, state-by-state taxability of digital goods, federal compliance (INFORM Consumers Act), money-transmission / MSB registration (FinCEN), Wayfair/economic nexus and MTC guidance, state tax developments on digital services and advertising, and practical marketplace compliance topics (seller onboarding/KYC, exemption certificates, privacy/CCPA, ADA/accessibility).

Searches prioritized official sources (state revenue departments, FinCEN, FTC), major tax research groups (Tax Foundation, MTC), and leading compliance vendors and professional services analyses (Avalara, TaxJar, Sales Tax Institute, Morgan Lewis).

I ran multiple targeted searches to capture both high-level policy and specific, actionable guidance (2020–2026 timeframe).Key findings (compressed):- Marketplace facilitator laws: Nearly every U.S. state with a sales tax has enacted marketplace facilitator laws that shift collection/remittance responsibility to the marketplace in many circumstances; details and exceptions vary by state (thresholds, definitions, and whether sellers must still register/file). (Sources: Avalara state-by-state guide; Tax Foundation analysis.)- Taxability of digital goods: States differ widely in whether they tax digital goods (ebooks, streaming, SaaS, digital downloads).

Some states treat specified digital products as taxable, others exempt electronically delivered content; sourcing rules and local jurisdiction complexities add additional burden. State trends through 2024–2025 show an expansion by some states to tax SaaS, digital services, and digital advertising. (Sources: Avalara state-by-state digital products guide; Sales Tax Institute; state guidance samples.)- Nexus and Wayfair impact: After South Dakota v.

Wayfair, states adopted economic nexus thresholds; marketplaces and sellers must track nexus and register where thresholds are met. The Multistate Tax Commission (MTC) and related white papers provide implementation guidance and note variation across states. (Source: MTC, Tax Foundation.)- Federal compliance overlays: The INFORM Consumers Act (effective June 27, 2023) imposes seller-identity verification and reporting obligations on online marketplaces (verify high-volume third-party sellers, maintain/verify seller info, facilitate consumer reporting).

The FTC has issued business-education materials and enforcement notice. (Source: FTC.)- Money transmission / financial compliance: FinCEN requires Money Services Businesses (MSBs) to register; marketplaces that accept and transmit funds, issue stored value, or otherwise facilitate payments must evaluate MSB/money-transmitter risk and state licensing requirements.

State money-transmitter licensing regimes vary and often require separate applications, bonding, and AML/SAR programs. (Source: FinCEN materials.)- Privacy, consumer protection, and accessibility: State privacy laws (CCPA/CPRA and recent laws in many states through 2025–2026) impose notice, data subject rights, and processing obligations that apply to marketplaces collecting personal data.

ADA and consumer protection laws (FTC) also affect marketplace design and marketing practices. New privacy laws continue to broaden the regulatory landscape for B2C and increasingly B2B ecommerce. (Source: ICLG digital business overview; Digital Commerce reporting.)- Practical compliance steps for marketplace operators and sellers (recommended checklist): * Map products and determine state-level taxability for each digital product/service (use SST definitions where applicable). * Track nexus (economic and physical) by state; register where thresholds met. * Determine whether your platform qualifies as a marketplace facilitator in each state; if so, implement collection/remittance flows and reporting. * For non-facilitator platforms, ensure sellers understand their tax obligations; require accurate tax information and collect exemption certificates where applicable. * Implement seller onboarding and KYC consistent with INFORM and AML expectations (collect and verify seller identity for high-volume sellers; maintain records). * Evaluate payments flows for MSB/money-transmitter triggers; consult counsel and FinCEN/state regulators; implement AML/SAR policies where required. * Update privacy policies, data processing agreements, and compliance programs to align with CCPA/CPRA and other state laws. * Address accessibility (ADA) and consumer-protection practices (clear listings, returns, and complaint processes). * Use automation/tax engines, exemption-certificate management, and centralized recordkeeping to reduce operational burden.Sources and supporting excerpts (verbatim excerpts associated with each citation follow):

Research steps and summary:Steps taken:1) Performed broad web searches and scraped authoritative sources covering: marketplace facilitator laws, state-by-state taxability of digital goods, federal compliance (INFORM Consumers Act), money-transmission / MSB registration (FinCEN), Wayfair/economic nexus and MTC guidance, state tax developments on digital services and advertising, and practical marketplace compliance topics (seller onboarding/KYC, exemption certificates, privacy/CCPA, ADA/accessibility).

Searches prioritized official sources (state revenue departments, FinCEN, FTC), major tax research groups (Tax Foundation, MTC), and leading compliance vendors and professional services analyses (Avalara, TaxJar, Sales Tax Institute, Morgan Lewis).

I ran multiple targeted searches to capture both high-level policy and specific, actionable guidance (2020–2026 timeframe).Key findings (compressed):- Marketplace facilitator laws: Nearly every U.S. state with a sales tax has enacted marketplace facilitator laws that shift collection/remittance responsibility to the marketplace in many circumstances; details and exceptions vary by state (thresholds, definitions, and whether sellers must still register/file). (Sources: Avalara state-by-state guide; Tax Foundation analysis.)- Taxability of digital goods: States differ widely in whether they tax digital goods (ebooks, streaming, SaaS, digital downloads).

Some states treat specified digital products as taxable, others exempt electronically delivered content; sourcing rules and local jurisdiction complexities add additional burden. State trends through 2024–2025 show an expansion by some states to tax SaaS, digital services, and digital advertising. (Sources: Avalara state-by-state digital products guide; Sales Tax Institute; state guidance samples.)- Nexus and Wayfair impact: After South Dakota v.

Wayfair, states adopted economic nexus thresholds; marketplaces and sellers must track nexus and register where thresholds are met. The Multistate Tax Commission (MTC) and related white papers provide implementation guidance and note variation across states. (Source: MTC, Tax Foundation.)- Federal compliance overlays: The INFORM Consumers Act (effective June 27, 2023) imposes seller-identity verification and reporting obligations on online marketplaces (verify high-volume third-party sellers, maintain/verify seller info, facilitate consumer reporting).

The FTC has issued business-education materials and enforcement notice. (Source: FTC.)- Money transmission / financial compliance: FinCEN requires Money Services Businesses (MSBs) to register; marketplaces that accept and transmit funds, issue stored value, or otherwise facilitate payments must evaluate MSB/money-transmitter risk and state licensing requirements.

State money-transmitter licensing regimes vary and often require separate applications, bonding, and AML/SAR programs. (Source: FinCEN materials.)- Privacy, consumer protection, and accessibility: State privacy laws (CCPA/CPRA and recent laws in many states through 2025–2026) impose notice, data subject rights, and processing obligations that apply to marketplaces collecting personal data.

ADA and consumer protection laws (FTC) also affect marketplace design and marketing practices. New privacy laws continue to broaden the regulatory landscape for B2C and increasingly B2B ecommerce. (Source: ICLG digital business overview; Digital Commerce reporting.)- Practical compliance steps for marketplace operators and sellers (recommended checklist): * Map products and determine state-level taxability for each digital product/service (use SST definitions where applicable). * Track nexus (economic and physical) by state; register where thresholds met. * Determine whether your platform qualifies as a marketplace facilitator in each state; if so, implement collection/remittance flows and reporting. * For non-facilitator platforms, ensure sellers understand their tax obligations; require accurate tax information and collect exemption certificates where applicable. * Implement seller onboarding and KYC consistent with INFORM and AML expectations (collect and verify seller identity for high-volume sellers; maintain records). * Evaluate payments flows for MSB/money-transmitter triggers; consult counsel and FinCEN/state regulators; implement AML/SAR policies where required. * Update privacy policies, data processing agreements, and compliance programs to align with CCPA/CPRA and other state laws. * Address accessibility (ADA) and consumer-protection practices (clear listings, returns, and complaint processes). * Use automation/tax engines, exemption-certificate management, and centralized recordkeeping to reduce operational burden.Sources and supporting excerpts (verbatim excerpts associated with each citation follow):