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

State Effective Date State Resource
Arizona October 1, 2019 Link
California October 1, 2019 Link
Colorado* October 1, 2019 Link
Maine October 1, 2019 Link
Maryland October 1, 2019 Link
Massachusetts October 1, 2019 Link
Nevada October 1, 2019 Link
North Dakota October 1, 2019 Link
Texas October 1, 2019 Link
Utah October 1, 2019 Link
Ohio September 1, 2019 Link
Arkansas July 1, 2019 Link
Indiana July 1, 2019 Link
Kentucky July 1, 2019 Link
New Mexico July 1, 2019 Link
Rhode Island July 1, 2019 Link
Virginia July 1, 2019 Link
West Virginia July 1, 2019 Link
Wyoming July 1, 2019 Link
Vermont June 6, 2019 Link
Idaho June 1, 2019 Link
New York June 1, 2019 Link
South Carolina April 29, 2019 Link
Nebraska April 1, 2019 Link
District of Columbia April 1, 2019 Link
South Dakota March 1, 2019 LinkCertificate of Collection
Alabama January 1, 2019 Link
Iowa January 1, 2019 Link
Connecticut December 1, 2018 Link
New Jersey November 1, 2018 Link
Minnesota October 1, 2018 Link
Oklahoma July 1, 2018 Link
Pennsylvania April 1, 2018 Link
Washington January 1, 2018 Link

Help Selling on Amazon

Robyn has years of experience helping with Amazon Account Management, Amazon PPC management, and Amazon Listing Management. For more information, contact Marketplace Blueprint today!

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