The Fulfilled by Amazon program allows you to sell to customers worldwide without storing your inventory. Instead, you send it to Amazon, which keeps it in one of their warehouses and ships your products out as orders come in. While some sellers see this as a grey area, several states believe that storing your merchandise at an Amazon warehouse can help you establish nexus in that state. It is essential to know about Amazon FBA seller Taxes.
Amazon has warehouses in more than half of the states in the United States, so this is no minor concern. What is the location of your inventory? Is this a sign that you have nexus? If you want to comprehend your tax obligations completely, you’ll need to answer those questions. The Fulfilled by Amazon (FBA) program allows you to sell to customers worldwide without storing your inventory. Instead, you send it to Amazon, which keeps it in one of their warehouses and ships your products out as orders come in.
Essential things you should know about Amazon FBA seller taxes
While some sellers see this as a grey area, several states believe that storing your merchandise at an Amazon warehouse can help you establish nexus in that state. Amazon has warehouses in more than half of the states in the United States, so this is no minor concern.
Amazon will collect and remit sales tax in some states on your behalf.
You will have to tell them to collect in some cases, and you have to remit yourself. Amazon collects and pays sales tax on behalf of FBA sellers in states with marketplace facilitator legislation. Essentially, as a powerful platform for third-party sellers, these regulations require the corporation to manage some of the sales tax obligations for those vendors.
Even if Amazon collects and remits sales taxes, you will still need a sales tax permit or license in each state or jurisdiction, as well as filing returns. Similar legislation is being considered in several states; in Alabama and Minnesota, it has already passed and is set to take effect next year. If you have nexus in a state without a marketplace facilitator statute, you’ll need to set up your Amazon account so that your sales are appropriately taxed. In some cases, Amazon will collect sales tax but not remit it on your behalf. Ignoring sales tax may save you some time today, but it will cause you more problems in the future.
Final thoughts
People start businesses for various reasons, but one of them isn’t to deal with sales taxes. The good news is that you don’t have to worry about sales tax compliance on your own. TrustFile was created specifically for Amazon merchants like you. It seamlessly interacts with the Amazon platform — and any others you use — ensuring that all of your data is accessible when preparing and filing sales tax returns. We also offer online filing and a comprehensive FBA Inventory Report. Many sellers, not only on Amazon but also on other sites, believe they are exempt from paying sales tax. Experts certainly don’t advise vendors to collect sales tax if they aren’t required to do so.
