Sales Tax Update on Bonanza

Hello, Bonanzlers! Shelly here, with an update on everyone's favorite topic - taxes! As you are aware, many states have added Marketplace Facilitator Provisions to their sales tax laws. This means that Bonanza has sales tax nexus in those states, and is thereby responsible for calculating, collecting, and remitting tax for all sales made to buyers located in those states.

What is sales tax nexus? Sales tax nexus is the connection between a seller and a state that requires the seller to collect and remit tax on sales made to buyers in that state.

As a business owner selling on Bonanza, you are responsible for collecting taxes when applicable. However, thanks to a partnership with TaxCloud, Bonanza will collect and remit sales tax on seller's behalf for all transactions where the buyer is located in the following states:

Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington D.C., Washington State, West Virginia, Wisconsin, and Wyoming

We recommend all sellers consult a tax professional in their state to determine their tax obligations. In this page and throughout our site, Bonanza is not acting as a tax advisor and is not able to provide tax advice, but we do want to keep you updated about recent law changes that impact our site.

How is this different from how Bonanza has handled sales tax in the past?

Until these changes were enacted in 2019, Bonanza as a marketplace did not collect sales tax. Sellers had an option to set up sales tax rules in the Payments & Purchases tab of their booth, but we’ve always left it up to the seller to determine which tax rules apply to their business. Sellers were then responsible for remitting the tax funds to the relevant state. This process will remain unchanged for all states except for the ones named above. You are welcome to create tax rules in your booth for all other states. Any tax rules created for the above-listed states will be overridden at checkout so that the tax is collected by Bonanza.

How will this impact checkout?

If your buyer is located in one of the states listed above, Bonanza will collect tax on the transaction. Our partner, TaxCloud, will calculate the tax amount based on the type of product, the buyer’s location, and the location from which the item is shipped. The buyer will send a payment for the item(s), shipping (if applicable) and tax to the seller’s payment account. Bonanza will then remove the tax portion of the payment, generally displayed as a “Partner fee” on the payment receipt.

It’s likely that other states will enact Marketplace Facilitator Provisions, which will then require Bonanza to collect tax on additional transactions. We will notify sellers on our Sales Tax and Bonanza page. We’re working closely with our partners at TaxCloud to ensure we use the most up-to-date tax rates and regulations. Bonanza sellers are also welcome to use TaxCloud to manage their individual sales tax collection and remittance. Learn more about using TaxCloud for your business.

We have worked hard to ensure this change in tax law would transition smoothly for all sellers. If you have any specific questions not on our Sales Tax and Bonanza page just drop a note to [email protected].