High-volume e-commerce compliance

Federal level rules and requirements include the impact of South Dakota v. Wayfair (2018), which changed sales tax nexus standards, allowing states to require out-of-state sellers to collect sales tax based on economic nexus (sales/transactions thresholds) rather than physical presence.

The INFORM Consumers Act, effective June 27, 2023, mandates online marketplaces to collect, verify, and disclose identifying information for "high-volume third-party sellers" (defined as 200+ transactions and $5,000+ gross revenues on a marketplace in a 12-month period).

This act imposes verification, disclosure, suspension, and data-security obligations on marketplaces, with enforcement by the FTC and state AGs, including civil penalties. For product safety, the CPSC requires manufacturers and importers of certain consumer products to issue General Certificates of Conformity (GCC) based on testing or a reasonable testing program.

GCCs must contain product identification, citations to applicable safety rules, manufacturer/importer identification, contact information for test records, and date and place of manufacture. Sellers and importers are responsible for maintaining test records and ensuring compliance.

The state sales tax and marketplace facilitator landscape has evolved significantly post-Wayfair, with nearly all states adopting economic nexus thresholds. Common thresholds are $100,000 in sales (often with 200 transactions), though larger states like California, Texas, and New York have higher thresholds (e.g., $500,000).

Many states are phasing out the 200-transaction test in 2024–2025, moving to dollar-only thresholds. Marketplace facilitator laws generally require marketplaces to collect and remit sales tax.

However, sellers must still monitor for nexus triggers such as inventory storage (e.g., FBA warehouses), employees, or other physical presence, which can create independent filing obligations. State guidance should be consulted to determine if sellers must still file returns (even zero returns) when marketplaces collect taxes.

Official state Department of Revenue pages and consolidated guides from entities like Avalara, SalesTaxInstitute, Wolters Kluwer, and TaxCloud provide state-level thresholds, effective dates, and registration links.

A practical compliance checklist for high-volume sellers includes: 1. Tracking sales and transactions by buyer state, considering rolling 12-month lookbacks or preceding calendar years.

Federal level rules and requirements include the impact of South Dakota v. Wayfair (2018), which changed sales tax nexus standards, allowing states to require out-of-state sellers to collect sales tax based on economic nexus (sales/transactions thresholds) rather than physical presence.

The INFORM Consumers Act, effective June 27, 2023, mandates online marketplaces to collect, verify, and disclose identifying information for "high-volume third-party sellers" (defined as 200+ transactions and $5,000+ gross revenues on a marketplace in a 12-month period).

This act imposes verification, disclosure, suspension, and data-security obligations on marketplaces, with enforcement by the FTC and state AGs, including civil penalties. For product safety, the CPSC requires manufacturers and importers of certain consumer products to issue General Certificates of Conformity (GCC) based on testing or a reasonable testing program.

GCCs must contain product identification, citations to applicable safety rules, manufacturer/importer identification, contact information for test records, and date and place of manufacture. Sellers and importers are responsible for maintaining test records and ensuring compliance.

The state sales tax and marketplace facilitator landscape has evolved significantly post-Wayfair, with nearly all states adopting economic nexus thresholds. Common thresholds are $100,000 in sales (often with 200 transactions), though larger states like California, Texas, and New York have higher thresholds (e.g., $500,000).

Many states are phasing out the 200-transaction test in 2024–2025, moving to dollar-only thresholds. Marketplace facilitator laws generally require marketplaces to collect and remit sales tax.

However, sellers must still monitor for nexus triggers such as inventory storage (e.g., FBA warehouses), employees, or other physical presence, which can create independent filing obligations. State guidance should be consulted to determine if sellers must still file returns (even zero returns) when marketplaces collect taxes.

Official state Department of Revenue pages and consolidated guides from entities like Avalara, SalesTaxInstitute, Wolters Kluwer, and TaxCloud provide state-level thresholds, effective dates, and registration links.

A practical compliance checklist for high-volume sellers includes: 1. Tracking sales and transactions by buyer state, considering rolling 12-month lookbacks or preceding calendar years.

Separately monitoring marketplace versus direct sales and confirming if marketplace sales contribute to personal thresholds.

Registering for sales tax permits in states where economic or physical nexus is established.

For marketplace users, confirming tax collection and remittance by the marketplace and understanding personal filing obligations, while obtaining documentation of taxes collected.

Properly managing resale certificates and exempt sales by obtaining and maintaining records, adhering to varying state requirements.

Recognizing that inventory storage in a state (e.g., fulfillment centers, 3PLs) typically creates physical nexus, necessitating registration and filing in those states.

Ensuring product compliance with CPSC/FDA/other testing, labeling, GCCs, and documentation.

Adhering to shipping compliance rules for hazardous materials (DOT/PHMSA/IATA) and carrier restrictions.

Complying with applicable state privacy statutes (e.g., California CCPA/CPRA, Virginia CDPA, Colorado CPA) and federal consumer-protection rules (FTC marketing/disclosures, ADA accessibility, PCI-DSS).

Maintaining accurate records for potential state audits and reporting, including sales records, exemption certificates, GCCs, test reports, and marketplace documentation.