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Marketplace Facilitator and State Sales Taxes (December 2022)

Community Manager

To comply with state and local law, Upwork will begin to collect and remit applicable sales and use taxes from clients starting in mid-December. We emailed all who may be subject to these tax laws.


One tax is the marketplace facilitator sales tax. Clients pay this tax on payments made to freelancers, and the rate will vary depending on where the client lives. The other tax is state sales tax, which will be applied to the fees that clients pay on Upwork.


Many US states have recently enacted laws that shift the traditional sales and use tax obligation from the seller to the third-party service provider operating the marketplace (which is Upwork). As a result, Upwork is required by law to collect sales and use tax on taxable sales (including services) made through its marketplace and to report and remit that tax to the state taxing authority.   


For more information, visit our support section for sales tax.