EP 8: Sales Tax Collection Updates for Amazon.com with Peter Mantell

Amazon announced 10 new states they will be automatically collecting sales tax

As of October 1st Amazon will be automatically collecting and remitting sales tax in 10 additional states.  This has left many Amazon retailers confused on how this will affect them going forward.   In this episode, Peter Mantell of Ampersand Accounting shares some general recommendations for retailers as they adjust to this new development for some states with large sales tax implications for Amazon sellers.

Note: Nothing in this episode should be taken as specific tax or legal advice.  Contact your licensed professional to identify the next best steps for your state.  The purpose of this podcast is solely that you have the information to work with tax and legal professionals for your company.

Do I still need to file in states Amazon is collecting sales tax?

The answer to that question is really, it depends.  Some states still want sellers to remit a filing, even if Amazon is collecting and remit the actual tax.  Some states, like Texas, have said that since they don’t feel selling on Amazon creates a nexus for retailers they are allowing sellers to de-register.

If you are continuing to file in that state you would simply mark your Amazon sales as exempted sales.

What types of sellers on Amazon need to think about sales tax compliance?

Not all products being sold on Amazon will put the seller at a potential sales tax liability.  On platforms and programs that Amazon is the seller of record (Vendor Central, KDP, etc) those vendors do not have any potential sales tax liability from those Amazon sales.   If you are the seller of record, then you should talk with a SALT tax professional to discuss potential sales liability.   Overall:

No potential sales tax liability: Vendor Central, Sold By Amazon, Kindle/CreateSpace

Potential sales tax liability: Seller Central (with the exception of Sold By Amazon)

Other Areas Discussed

We also discussed considerations before going to register with the remaining states that Amazon is not currently collecting, California back taxes, and economic vs physical nexus.

Amazon’s Actual Announcement

Amazon’s announcement around this happened on Seller Central.  Here is an excerpt of that announcement:

Tax collection for orders shipped to the states of AZ, CA, CO, ME, MD, MA, NV, ND, TX, UT – Effective October 1, 2019

Based on changes to Arizona, California, Colorado, Maine, Maryland, Massachusetts, Nevada, North Dakota, Texas, and Utah State tax laws, Amazon will begin calculating, collecting, and remitting sales and use tax for all orders shipped to customers in these states on October 1, 2019.

Your existing tax calculation settings, order details, and payments reporting will update automatically to reflect this change. Changes to your tax settings or seller account are not required based on the state law changes. However, you may consider working with your tax advisor to determine if your business has any other ongoing tax remittance or reporting obligations.

Answers to common questions are available in the Marketplace Tax Collection FAQ.

Which States Is Amazon Collecting and Remitting for As of October 1st, 2019

StateEffective DateState Resource
ArizonaOctober 1, 2019Link
CaliforniaOctober 1, 2019Link
Colorado*October 1, 2019Link
MaineOctober 1, 2019Link
MarylandOctober 1, 2019Link
MassachusettsOctober 1, 2019Link
NevadaOctober 1, 2019Link
North DakotaOctober 1, 2019Link
TexasOctober 1, 2019Link
UtahOctober 1, 2019Link
OhioSeptember 1, 2019Link
ArkansasJuly 1, 2019Link
IndianaJuly 1, 2019Link
KentuckyJuly 1, 2019Link
New MexicoJuly 1, 2019Link
Rhode IslandJuly 1, 2019Link
VirginiaJuly 1, 2019Link
West VirginiaJuly 1, 2019Link
WyomingJuly 1, 2019Link
VermontJune 6, 2019Link
IdahoJune 1, 2019Link
New YorkJune 1, 2019Link
South CarolinaApril 29, 2019Link
NebraskaApril 1, 2019Link
District of ColumbiaApril 1, 2019Link
South DakotaMarch 1, 2019LinkCertificate of Collection
AlabamaJanuary 1, 2019Link
IowaJanuary 1, 2019Link
ConnecticutDecember 1, 2018Link
New JerseyNovember 1, 2018Link
MinnesotaOctober 1, 2018Link
OklahomaJuly 1, 2018Link
PennsylvaniaApril 1, 2018Link
WashingtonJanuary 1, 2018Link

 

One Response

  1. Terry King September 25, 2019

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