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

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