2023 UPDATE - Do Amazon Sellers Need to Worry About Sales Tax?
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- Опубликовано: 16 июл 2024
- Do Amazon sellers need to worry about sales tax? This video covers exactly what responsibility Amazon sellers have to calculate, collect, and remit sales tax.
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Yesss! This is what I have been searching the internet for. Thank you so much
Glad to help!
I appreciated this video. The ambiguity of sales tax filing through FBA has been quite daunting for me, especially when most things on the web are either outdated (pre-marketplace facilitator laws) or just bad advise.
I'm so glad we could help you. Thanks for letting us know. :)
this was a great great video thanks for all the answers :)
You're welcome.
This is a fantastic video. It's clear and easy to understand your explanations. Thank you for providing this information.
You're very welcome! I'm glad it was helpful for you. :)
you make everything so clear! thank you!
Glad it was helpful!
I recently start watching your vlogs, its truly worth watching and helping.
Glad you like them!
@@LedgerGurus i need to register my S Corp at SAM to have UEI, look forward to see your vlog and understand what documents must be ready before putting first step.
Thank you, this has been great!
Glad you enjoyed it!
Thank you very much
You are welcome
Excellent video. Thanks.
You're welcome. We're glad it was helpful to you.
very valuable video
Glad it was helpful!
Informative
Glad to help.
AWESOMENESS 🎉☝🏼❤️👏🏼🤩👍🏼
Thanks!!
Hi! Thank you for your content! Would please make a separate, more detailed video and explain better about Wisconsin and Pennsylvania which have an income tax liability. What does this term even mean? I do have very little inventory stored in those states and very minimal sales, maybe $200 per quarter in both. Because sales are so little, i haven't filed sales tax in WI and PA yet. How will this income tax liability impact me? Thank you
You need to dig a little and find out if WI and PA consider having inventory in their state as a big enough connection to give you a sales tax liability. I know you asked about income tax, but we don't deal with income tax at all, only sales tax. You may have to call the state department of revenue and ask someone about your situation. Or you can schedule a sales tax consultation with one of our sales tax experts. calendly.com/ledgergurus-sales-tax/?RUclips&
Very informative, thank you.
Do states count marketplace sales on Amazon toward the nexus status threshold?
Say I have 0 sales tax implications from Amazon, but I generate enough sales in a state via Amazon then decide to make one non-marketplace sale directly to a customer. Will I have effectively put myself over the threshold where I'd need to register, collect, report, and remit sales tax to that state?
Does this vary from state to state?
Good question. Technically, yes, you would need to register, collect, and remit. But we also believe in the concept of risk management. There is a cost to being sales tax compliant, and there are fees and penalties associated with not being compliant. You, as the business owner, get to decide whether the risks of not complying are worth the potential costs. We actually have a section in our sales tax courses about this very thing. Sometimes it makes sense to go ahead and be compliant. Sometimes it doesn't. That's up to you.
This has been a topic that is very difficult to get clarity from AMZ, so thank you! I need to file with my state and was trying to find a report to find a breakdown by state so that I know how much to report to my state, but are you saying I file 0 because AMZ has filed under them?
There are a few exceptions but generally that is correct.
Hi, very good information and super easy to digest. Q: Do you folks have a list of the states that required you to file or report sales taxes because your inventory is in Amazon warehouse there even if yoLLC is registered in other state? my case is FL LLC and Product is in Indiana.
We don't, but here are a couple links that may help you: www.avalara.com/us/en/learn/guides/state-by-state-physical-presence-nexus-guide.html and www.linkedin.com/pulse/nexus-state-because-presence-inventory-amazon-leon-granovsky-cpa/
Hello. Thank you for all your videos! I just have a couple of questions. 1. What if I have some sales thru ebay and poshmark but the big portion of what I sell is on amazon, how do I file sales tax return for all 3 marketplace facilitator? 2. Just confirming if my understanding is correct that I don't need to file sales tax return for items I haven't sold yet (but bought within the fiscal year)?
No, you only file sales tax on items you've sold. And I think I answered your second question in the comment for the other video you commented on.
thanks great video! i didnt quite get the end about the income tax how is that connected to sales tax ??
Just that some states now consider having physical and/or economic nexus as enough of a presence to justify charging income tax from online sellers, even if they don't reside in the state. I don't have specific states right here, but you can look it up.
Thank you! 1) Does Amazons responsibility to remit on behalf of their sellers apply internationally? (for example to European VAT?) 2) if a seller is interested in advertising in foreign marketplaces (through Amazon) is there anything to be aware of (apart from reporting income to your home state/country)? Do you have a video about selling internationally? 😊
We don't deal with any international taxes, only US-based taxes. The videos and info we have is for international sellers selling into the US.
Hello, first of all, thank you so much for your informative videos, they are extremely helpful in providing guidance in these complicated tax issues.
I have a bit of an interesting situation and I was wondering if you may have the answer. I created my Amazon Seller account as a Sole Proprieter (meaning without an LLC, just my social etc..) with the intention of eventually switching it over to an LLC.
So like i had planned, i went ahead and created my New York State LLC (my home state) and got a certificate of authority (a sales tax permit).
I HAVE YET TO switch over my amazon seller account to the LLC entity but I have garnered about 400-500$ worth of sales on the platform on my (sole proprieter-non LLC) account.
I know in a couple days is the deadline which I must file the sales tax return for my NY LLC (even though it's technically 0 gross sales since i never operated a business under the LLC yet..
What would you reccomend I do in this situation?
1. Should I file the 400-500$ dollars worth of gross sales under the Sales Tax Return for the LLC that i had created even though my amazon account is not linked to it as of yet?
2. Should I just file the gross sales of the LLC as 0$ and not file anything regarding the sales on my amazon account?
3. Is there a way to file as a sole proprieter (non-llc) for those 400-500$ worth of sales and is this even advisable to do with such a low amount of sales?
Sorry if this is a bit confusing but i really appreciate all the help you can give, thanks.
In addition, I've checked and seen that I only have grossed about 120$ worth of sales for New York, my home state. (of which sales tax was obviously taken off by amazon).
This is a pretty complicated question. I suggest you schedule a sales tax consultation with one of our sales tax experts. They'll help you get the answers you're looking for. You can schedule that here - calendly.com/ledgergurus-sales-tax/.
If my report shows that i have inventory in Wisconsin but my sales into Wisconsin have been zero since day one, do i still need to register and file in WI?
Yes. www.avalara.com/us/en/learn/guides/state-by-state-physical-presence-nexus-guide.html#:~:text=Businesses%20are%20required%20to%20register%20with%20the%20Wisconsin%20Department%20of,representatives%20trigger%20a%20sales%20tax
Thank you so much for the info. Just wanted to verify the following.
1. I just opened my fba business under my SS, do you advice for me to open an LLC or other type of business structure to get the most tax benefits or protections?
2. I am located in IL do I need to get a license here? Literally this is my first month I have only sold 2-5 items.
3. Can I get tax resale exception certificate if my business is under my SS or do I need to open LLC?
4.Do you have any videos on income tax filings for business set up as sole proprietorship?
1. We actually did a webinar recently with our tax partners about how to structure a business for the most tax benefits. You can find that here - ruclips.net/video/MQ7Gi1Yaqy0/видео.html
2. You do need to register in the state where you live because you have physical presence there. For more information on nexus, go here - ledgergurus.com/sales-tax-nexus/
3. Each state is different for exemption certificates, but in general, you don't need an LLC to get one. If you want to learn more about exemption certificates, you can do that here - ruclips.net/video/DlrTfzKoDQU/видео.html and here - ruclips.net/video/Cn-vsd4HlTE/видео.html.
4. We don't do anything with income tax, just sales tax.
Hi!
Very informative indeed.
I am a self publishing author an Amazon kdp. But i reside in the middle east (Oman). So what I understand from this video is that Amazon takes care of all tax liabilities right? So i dont need to worry about any taxes-is that correct? There is no income tax on individuals in my country as of now.
Also, what about the sales tax for other similar online platforms that have US as the marketplace bland myself living in the middle east? For example the print on demand platforms like redbubble, teepublic, etc and many such more
Amazon, and other marketplaces such as Walmart, Etsy, and eBay, all have to abide by these rules in the US. You'll have to check if the other platforms you mentioned are considered marketplaces or not. And yes, marketplaces are responsible to collect and remit sales tax for all transactions on their platform.
hi, I was wondering for the following scenario: let's say we sell on Amazon and Shopify and fulfill via a print provider. We are located in FL, and have a FL resale certificate, and filled out the MTC and SST and submitted to the print provider. Would we still ever need to ever register in the states and file a return for the states that use the MTC/SST forms, if their economic Nexus is reached by Shopify orders? or for Amazon orders? Or we would not need to register/file returns in those states since they accept out of state (Florida) resale certificates via the MTC form, and we would still only need to file a return only for FL? Thank you!
If the print provider accepts the MTC/SST form then you only need to register and file in FL.
I have noticed that some FBM orders I send to customers do not show any taxes charged from Amazon.. should I be worried about this? These are states like Wisconsin and South Carolina very random states.
This could be a taxability issue but it's hard to say without knowing more about the products being sold and your setup I'd suggest you schedule a consultation with one of our sales tax experts so you can dive in deep and get all your questions answered. calendly.com/ledgergurus-sales-tax/?RUclips&
Thank you for great video. Please clarify this:
I am selling on Amazon and my entity is from Texas. I am confused when you mention about Pennsylvania and Wisconsin has income tax liability.
Do I have to file income tax in those state if I am leave in Texas?
If have income tax liability what is that that mean as to report?
We can give you more individualized help through a consulting call. You can schedule one here: ledgergurus.com/ecommerce-accounting-services/sales-tax/
do you have any videos on dealing with sales tax on online sales from your own site but fulfilled by Amazon?
Not specifically, but if you're selling from your site, you're still responsible for sales tax if you've got nexus in a state. This video will explain in more detail - ruclips.net/video/iLcCFWXZXCA/видео.html&pp=gAQBiAQB
Question- for 'affiliate nexus' is that related to affiliate links like Amazon associate?
Here's a good article about that: www.taxconnex.com/blog-/understanding-affiliate-nexus-and-other-forms-of-physical-presence
In CA it says we’re not required to register with CDTA for a sellers permit since Amazon is the marketplace facilitator. Can you confirm this?
We can't confirm this but if the state is telling you not to register, then I would trust the state and not worry about registering. Just make sure to keep that documentation where the state said they didn't need to register in case the state ever comes back. Or you could call the state again and get another opinion.
If i open a non US resident LCC in sales tax free state, do i still have to file sales tax in the state where my LLC is located.
Secondly do i have to file income tax in my home country only or do i have to file it in US as well?
If you do not have physical or economic nexus in a state, you do not need to collect or remit sales tax. For more information, watch our free masterclass - ledgergurus.thinkific.com/courses/the-uncomplicated-truth-about-sales-tax?RUclips&
For your second question, that is a question for your tax accountant as we do not do anything with income tax.
1) Im an international seller and I have registered an LLC in wyoming and I have a registered agent there and an office address which is the registered agents address for receiving documents. Does that qualify for physical nexus?
2) Does having nexus in one of the sst states enough to qualify for applying for the sst?
1. No, just having a registered agent does not create physical nexus. The transaction count and sales amount will create nexus. If you have any employees, inventory, business properties, etc., then you need to register in WY.
2. Yes, it is enough to qualify.
The thing I'm stuck on is, my residential state is MA. My LLC is out of wyoming with a Wyoming. My amazon store will operate under the wyoming LLC. Do I need a sales tax permit in either state, both, or none?
Yes, you need one in both because you have physical presence in MA and your "business is located" (physical nexus) in WY. You will need to collect sales tax in MA and WY after being registered.
Hello! Hoping you can help with my situation. I currently operate my business within IL as an Amazon seller as well as a wholesaler to other Amazon sellers. 1) My first question would be that while Amazon collects and remits sales tax, does that economic nexus still apply making me have to report sales tax to those states? 2) Regarding my wholesale operation, I sell to mostly people with resale certificates making them tax-exempt, would I have to register with their state to collect sales tax to make me able to accept the resale certificate? 3) My final question is for the people who don't have a resale certificate, since my operation is still under the same LLC as my Amazon store, do those sales get mixed towards my Amazon sales making me have to file economic nexus on them? Thank you!
The best way to get detailed answers to these questions is to schedule a sales tax consultation with one of our experts - calendly.com/ledgergurus-sales-tax/
Hi 2 questions your answer is highly appreciated.
I am selling bracelets and choosen A_GEN_TAX.Is that alright?
I see that Sales Tax Report for 5 states that amazon is not collecting sales taxes it seems like seller is responsible. Do I need to do anything?
BR :)
Those 5 states do not have state sales tax laws, which is why Amazon doesn't collect there. However, some of them have local sales tax laws, and you'll need to pay attention to those. Here's a good article about it: smartasset.com/financial-advisor/states-with-no-sales-tax
Hi! Thank you for creating these videos! Can you confirm I am understanding this correctly: I live in PA and have an LLC there - I am solely on Amazon FBA -- I have a sales and use tax permit for PA which requires me to report and remit quarterly -- I would put $0 every quarter since Amazon will take care of this as per Marketplace Laws. If my Amazon FBA inventory is being stored in various states, I should apply for sales tax permit in each of these states, since I have a physical presence -- but would still put $0 on the report because as per law Amazon is taking care of it. Not all states (such as, Delaware) would have me apply since they do not have sales tax, but a state such as Washington does consider Amazon inventory (FBA) physical presence, so apply and fill in $0. Is that all correct, and if so what is the advantage of having businesses apply for sales permit if returns are always $0?
That IS correct. It's not an advantage, but it is the law.
@@LedgerGurus Do I need to register my business or just get a sales tax permit for where I have physical nexus? Are you exempt from registering with Secretary of State?
@@GeorgeJuleYou'll register for a sales tax permit in states where you have physical nexus. I'm not sure what you mean by registering with the secretary of state.
I have a question. I'm not US nor Canada resident. I have a multi-member LLC in Wyoming as partnership. With company funds, I'm buying products from Amazon US market and then sell these products in Amazon Canada market. Do I need to pay federal income tax to USA from the profit I gain from Amazon ? Thanks for any help
We do not do income tax, and so are unable to advise on this question. I suggest you ask your tax accountant.
How about Puerto Rico? My Taxjar account indicates that I own some tax to Puerto Rico. Do I need to register with Puerto Rico and file and remit tax there, or does Amazon takes care of that as well?
Yes, they should. You can check by looking at your sales tax report to be sure. It'll tell you which orders have sales tax being remitted by Amazon and which ones you're responsible for. This video will show you where to find that - ruclips.net/video/n7xfob7ICPE/видео.html
As the owner of a single-member LLC in Florida, but not residing in the USA, and selling on Amazon, DO I need to file zero tax bcz i have checked in tax report c that their were no obligation on seller in terms of tax bcz all the tax was under market facilitator section. do i need to file zero tax now ?
I'd suggest calling the Florida Department of Revenue to talk to someone about your unique situation specifically. floridarevenue.com/Pages/contact.aspx
do you need to register your business as a foreign entity or just apply for a sales tax permit if you have inventory in an amazon warehouse? I am soon to have inventory stored in a NJ warehouse and the website to apply was confusing. It seemed to want me to register my business as a foreign entity if I had inventory there?
Are you a foreign entity or do you live in the US? There are different things that foreign companies have to do before they can register for sales tax permits. You can watch more about that here - ruclips.net/video/kJi6Zr0nHQM/видео.html. Otherwise, you can just apply for a sales tax permit in that state. You'll still just be filing $0 returns since Amazon will be collecting and remitting everything for you.
@@LedgerGurus no I live in NH. I didn't know if I needed to register my business as a foreign entity in each state for sales tax. or if it is just a separate sales tax permit? The NJ application had an option for either a remote seller with non physical presence (amazon warehouses counted as physical presence) or to register the business (which seemed geared towards NJ residents not out of state).
@@itssimplysharon No, you won't register as a foreign entity because you are US-based. You'll need to register your business for a sales tax permit when you have a physical presence there. The good thing is, though, that as long as you are only selling on Amazon or other marketplaces, you won't be responsible for remitting sales tax. You'll probably just need to file $0 returns. You can find a video we did on this subject here - ruclips.net/video/BlxgcWxPgt8/видео.html
do you need a sellers permit to have an amz seller account in california? i heard you did not need one. Do i need a re seller permit as well?
If you are located in California, then you should register for a sellers account. If you haven't reached nexus you don't need to register yet. The reseller permit will come when you register.
is sale tax deductible when filing tax returns under "taxes and licenses"? thanks
No, because it's not income. It's money that's being collected in behalf of the state and then remitted back to them. We just published this video about gross v net revenue and reference this very thing - ruclips.net/video/AMyb2WREIBc/видео.html&lc=UgyEhJuxsz1ro1Tpoxh4AaABAg.
Do i need to show full gross in my home state or just of the state m in?
Can you please restate your question? I'm not sure what you're asking.
hi there and thank you for all your really really informative videos. I have a question.. i am about to start with amazon FBA, i am located in Germany and i will sell just on Amazon USA.. ( registered as sole proprietorship) my products will be shipped direct to USA amazon warehouse and from there , sold and shipped in the USA costumers..My german tax consultant suggest me to get in contact with USA tax agency for what concern tax compliance/ tax collection and invoices ( how have to be written an invoice)... can you help me understand if he is right or is enough that amazon collect and remit sales taxes in USA for sellers? Thank you sincerely in advance
I suggest you watch our free Masterclass to get super clear on how Amazon handles taxes in the US - ruclips.net/video/iLcCFWXZXCA/видео.html
Dear we are selling in canada and USA we have USA llc company so how pay sale tax ?
Watch this video - ruclips.net/video/iLcCFWXZXCA/видео.html
Thank you so much. I am an non resident alien. I have a llc reg in wyoming and sell exclusively on amazon. So, I have to do nothing about sales tax right?
Not at this point.
How much total do you pay on renewal for wyoming llc..
@@abdulrabb1616 we don't handle that kind of thing, so you'll have to ask someone else.
I am from Pakistan and recently made a non us resident llc in Virginia for doing amazon fba wholesale only. i read somewhere that there is state income tax of around 2-5 %..will i be liable to pay state income tax also? Should i be worried about this..plz answer❤
We don't work with income tax at all. You'll have to ask your tax accountant about that.
Hello Dear we have USA LLC in Wyoming state as a foreigner national we are selling our products only on amazon USA and Amazon Canada as a amazon fba seller we have not physically living in USA OR CANADA so in my case are we need to file sale tax in USA and Canada ? please help me out thanks
No, Amazon is taking care of it for you.
hello, i am an overseas Amazon Seller only sell my own private label products in the US marketplace. Recently I want to expand to wholesale products and I went on and call IRS and got an EIN. Now my question is which state should I apply the resale certificate? As an foreign company, do I have to apply all 50 states for resale certificate since I am using FBA and they might ship the wholesale products into all different state warehouse? Please advice thanks
In answer to your second question, no. Do not apply to all 50 states for sales tax permits. You only need to do that where you have nexus, and that's not even completely necessary when you're selling solely through Amazon. That's because Amazon is a marketplace and is required by state laws in the US to collect and remit on behalf of sellers.
In answer to what state to apply the resale certificate, that depends on a number of factors. You may want to schedule a sales tax consultation with one of our sales tax experts to get more specific information for this. You can schedule that here - calendly.com/ledgergurus-sales-tax/.
@@LedgerGurus Thanks for the quick reply. In my research I learned that while we are using FBA warehouse, the inventory is already consider as "nexus", and while Amazon distribute my products to all over the US, that means I have nexus in all 50 states? But as you mentioned is not necessary, I think you mean Amazon acts as the market facilitator so there is no need to register for Sales Tax? However I also learned that there are 9 states that requires me to register and file for Sales Tax due to economic and physical nexus, this means I only need to register in these 9 states for the resale certificate? thanks
How can I get in contact with you? Can I call you or zoom? I need help with reporting on CDTFA.
You can schedule a sales tax consultation with one of our sales tax gurus - calendly.com/ledgergurus-sales-tax/
i have issue my wife’s amazon account was shut down because of dropshipping now i didnt know that u cant open 2 accounts on one adress my account shut down is there any other option
I don't know. You'll have to contact Amazon directly.
Dear we are living in pakistan
We just make foreigner llc company in wyoming for doing amazon FBA bussiness in USA and canada
We not physicall live in wyoming we just buy address and hier registered agent for creat the llc company in wyoming
So my question is who collect and pay the sale tax in USA and Canada if we we only sell product on amazon and we use amazon FBA services only in USA and Canada
I'm only familiar with the laws in the US, but according to those laws, Amazon is responsible to collect and remit sales tax for you in the US. You'll have to contact a Canada accounting company to learn the Canadian rules. For more information on US sales tax and how it is handled by Amazon and other marketplace facilitators, watch this video - ruclips.net/video/iLcCFWXZXCA/видео.html
Dear can we need to file zero sale tax report in wyoming? because my LLC and my registered agent have wyoming address ?
Because we did registered company in USA
But we ARE living in pakistan
Yes, this video is about California, but the principle is the same in Wyoming - ruclips.net/video/BlxgcWxPgt8/видео.html