Sales Tax Registration

Register for sales tax accounts in any United States jurisdiciton.

Sales Tax Nexus Determination

Find out where you are required to collect sales and use tax in jurisdictions across the nation. 

Sales Tax Return Filing

Affordable sales tax return filing for any business type and size.

Audit Assistance

We can help you through the audit process, keeping your rights intact and potentially reducing the amount of tax, penalty, and interest assessed. 

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Amazon Sales Tax

Get to know Amazon sales tax basics

Amazon Seller Central is a website that enables business owners to sell merchandise through the Amazon marketplace. In addition to providing a platform to business owners, Amazon also provides the ability to store and ship products through Amazon warehouses. This is called Fulfillment by Amazon, or FBA for short. Amazon currently has over 1 million sellers worldwide.

Sales and Use Tax on Amazon

Each e-commerce platform has its own rules and practices regarding sales tax collection and remittance. For example, on Shopify, sales tax is collected but not remitted. It is the responsibility of the seller to pay each jurisdiction the sales tax it owes. Amazon’s sales tax rules are different.

On Amazon, sales taxes are collected and remitted to the jurisdictions on behalf of the seller. This takes a huge burden off the seller, since they do not have to calculate individual tax rates in every state, city, township or county in the U.S. Additionally, they do not have to determine what items are taxed in each of these locations. For instance, some municipalities do not have a tax on clothing while others do. Further, items such as scarves may be considered clothing in some places and accessories in another, meaning sometimes sales tax is paid and sometimes it is not.

Additionally, there are aspects of sales and use tax services that Amazon does not handle. For instance, Amazon does not determine economic nexus. Economic nexus requires sellers to pay taxes under certain circumstances, such as how many sales they make in other jurisdictions and how much these sales are worth. Taxes must also be paid if your goods are stored in an Amazon fulfillment center in another state or area. Amazon does make it easier to make an economic nexus determination for storing goods by providing sellers with fulfillment reports, which inform sellers as to where there goods are being stored and shipped from.

While there are many benefits to using the Amazon platform, it’s the sales tax services that Amazon doesn’t supply that sellers should be concerned about. For instance, before you can collect sales taxes in another jurisdiction, you need to obtain a business license there, which is a service Amazon cannot help you with. Further, you do not need a sales tax registration if you do not meet the economic nexus threshold. Amazon does not report when nexus is triggered by your sales. Our sales tax firm can keep an eye on this for you, and we can also offer e-commerce business registration assistance.

Please keep in mind that these are only examples, and there may be other e-commerce sales tax compliance issues that sellers must address when working with Amazon.

For help with sales and use tax, compliance review services, e-commerce business registrations, sales tax filing, economic nexus determinations and much more, contact us.

 

Big. Small. Online. Offline. Tax Nexus for Everyone.

As a seller, it is crucial to be aware of the Amazon Seller Sales Tax and deductions. Well, it is nothing new since “sales tax” implies to every retailer out there – be it big or small; offline or offline. However, Amazon and FBA Taxes for sellers might be a little complicated than it is for other retailers.

 

What is Sales Tax Nexus for Amazon Sellers?

Amazon Sales Tax and nexus issues are one of the most intimidating challenges constantly faced by Amazon sellers. Every so often, an Amazon seller runs jeopardy of violating a tax nexus. The tax nexus concerning an individual Amazon seller’s business pertains to account details, for instance, the location of the FDA warehouse, along with the affiliates of the business listed in a particular state. Whether you’re running your Amazon store from a physical presence in the US or not, you still need to treat tax nexus as a potential risk, an amazon Seller can stir the pot if they rake in a certain volume of sales in any US city.

 

The Sales Tax Struggle is Real as an Amazon Seller

For starters, due to the nature of the Amazon FBA Sales Tax, the setting up of an FBA business calls into effect sales tax nexus relating to several states. Amazon And State Taxes returns is a comparatively easier issue to deal with for Amazon sellers who aren’t into FBA. The location of warehouses and offices is obviously known and consequently, the applicable tax nexus is easily determined. The setup of Amazon’s tax sales collection program is a considerably rigorous affair that throws off many candidates at multiple points. The interface and instructions on the Amazon seller central tax settings page frequently come off as demanding and intricate. The complexity of the setting interface results in making many users end up forgetting to specify vital details, for instance, the city, county, or state where the business operates physically. One intricate segment of the tax settings is the section which necessitates the seller to identify the appropriate tax code for all merchandise being sold.

Straighten Out Your Tax Liabilities

Are you an Amazon seller living in the United States? Then you’re probably aware that tax time is approaching. In fact, Amazon just released the 1099-K forms just some time ago.

The repercussions of violating any tax code concerning the Amazon State Sales Tax befalls only the seller, with Amazon entirely acquitted. It, consequently, goes without saying that every Amazon seller is accountable for the local tax nexus pertinent to their Amazon business.

Marketplace Responsibility

Some online platforms used for selling products are considered Marketplace Facilitators. This means that the platform is responsible for collecting and remitted sales tax. This removes the responsibility to collect and remit sales tax as a seller on those platforms. Amazon is considered a Marketplace Facilitator and therefore they collect and remit sales taxes for all marketplace facilitator jurisdictions. 

Seller Responsibility

Amazon retailers are responsible to collect and remit sales tax on applicable orders for states that haven’t passed Marketplace Facilitator legislation. The platform does not handle the tax collection or the tax settings for sellers for these jurisdictions. Before enabling tax collection for your online store, it’s important to evaluate where you have sales tax nexus and whether your products are taxable in those jurisdictions.

Selling on Another Platform

A seller may have no liability to collect and remit sales tax for most transactions on Amazon because the platform is considered a marketplace facilitator. However, if that online retailer also sells on another platform that is not a marketplace facilitator, such as Shopify, then they are liable to collect and remit sales tax for those transactions. 

Getting Started with Amazon Sales Tax

    1. Complete a thorough sales tax nexus review for both physical nexus and economic nexus.
    2. Register necessary sales tax account.
    3. Obtain sales tax certificates.
    4. Enable sales tax collection on all required platforms for the registered jurisdictions.
    5. File sales tax returns and maintain sales tax account.

Sales Tax Collection

Amazon provides online sellers the option to enable sales tax collection and automatically calcuates the sales tax rates, unless manual rates are opted in. 

  1. In Seller Central, go to the Settings drop-down menu and click Tax Settings.
  2. Skip Step 3 if you are a returning user.
  3. Before proceeding to Step 4, first-time users will want to do the following.
  4. Select a state:
  5. State Tax Registration Number – For each state you select, a valid state tax registration number is required to configuring taxing jurisdictions.
  6. Jurisdictions to tax – Jurisdiction selection tells the system what tax rates to look for when making calculations that Amazon supports.
  7. Shipping & Handling and Gift Wrap taxability – select the box to enable tax calculation.
  8. Optional Custom Rate assignment per state.
  9. Configure a default Product Tax Code (PTC) – A PTC works with your jurisdiction settings and applies tax rules to the tax calculation. The default PTC is used when an offer does not have a PTC assigned to the item offer details. If you do not select a default PTC, an item offer level PTC should be assigned. If neither are assigned, the tax calculation result will be non-taxable using A_GEN_NOTAX value.
  10. Amazon Tax Exemption Program – To enroll in the Amazon Tax Exemption Program, select the box next to ‘Enroll in the Amazon Tax-Exemption Program’.
  11. Once you have configured your tax settings, click Save Settings.

 

While Amazon’s tax calculation services provide a means to determine and apply sales and use taxes to orders, sellers are responsible for reviewing and determining the following:

  • The correct PTC
  • Calculation settings
  • All related information for their products
  • All tax documentation and payments to the appropriate taxing authorities for their transactions except where Marketplace Facilitator Legislation is in effect.

This applies to both Amazon-fulfilled and seller-fulfilled products. If you have additional questions about tax calculation, we suggest seeking assistance from your tax adviser.

Sales Tax Reports

Amazon provides multiple different sales tax report types that include buyer paid sales tax amounts shown on order details, payments, and financial reports in Seller Central. Itemized tax rates and liability are shown at a jurisdictional level in the reports.

 

Sales tax report types

 

Combined sales tax calculation report:

This report reflects tax calculation details that used your tax calculation settings (if any) and applicable marketplace tax collection rules. Tax and regulatory fees in this report include amounts calculated, collected, and remitted by Amazon. Use the sales tax calculation report for taxes paid to you. Do not use this report to remit sales tax.

Sales tax calculation report:

This report reflects tax calculation details that used your tax calculation settings (if any). Tax totals in this report are paid to you with your order earnings, for you to remit to the appropriate tax authority.

Marketplace tax collection report:

This report is for information only, reflecting taxes calculated, collected, and remitted by Amazon for orders destined for a marketplace tax collection jurisdiction. Do not use this report to remit sales tax.

 

Should I Outsource Tax Preparation?

Unless you’re a tax expert (i.e. you’re already a CPA), outsourcing your Amazon and state taxes is one of the best things you can do for your online business. You may have got the hint that setting up Sales Tax on Amazon Seller can not only be complicated but also potentially scary and time-consuming.

And while outsourcing comes with expenses, it not only saves you that much in taxes (and then some) but could possibly even turn owing taxes into getting a refund back.

✓ Identifying Your Tax Liabilities in the Various States

The Amazon stores your inventory in various states’ warehouses which implicates taxes for you. Our Sales Tax filing services identifies where your inventory is being stored, condensing your tax liabilities for you to decide if you want to remit tax there.

✓ Collect the Accurate Amount of Tax

At Sales Tax solutions, we ensure that you’re collecting the right amount of tax based on your merchandise being sold in over 12,000 different tax jurisdictions.

✓ Synchronize Tax Filings from Everywhere

Our synchronous Tax filing, reviewing and preparation services do submission on your behalf everywhere in the U.S.A. We’ve got every corner covered no matter which state or locality you do business in.

✓ Support for Tax-Exempt Entities

We make sure you are not on the hook for Amazon sales tax from purchases made by tax-exempt bodies, for instance, non-profits, churches, and governments.

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