Small Retailers Face More Marketplace Taxes This Holiday Season

December 23, 2019, 9:45 AM UTC

Small retailers are seeing the biggest impact to date from state sales taxes on online transactions during this holiday season.

More than 40 states tax out-of-state sellers once they exceed a certain number of online sales. 33 states plus Washington, D.C., collect taxes from retailers that don’t meet sales thresholds by charging online marketplaces like Amazon.com Inc. or Etsy Inc. with collecting taxes on behalf of their sellers.

The holiday season can be especially busy for small retailers that rely end-of-the-year gift sales. These sales can be substantial: more than 142 million U.S. consumers bought products online ...

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