According to a recent article, here are four important sales tax facts that every Amazon FBA online retailer needs to know.
1. The location of inventory creates nexus. If an online retailer transfers to an Amazon Fulfillment Center creates nexus which leads to potential sales tax responsibility fro the FBA online retailer. Simply put, if you have nexus, you will most likely owe sales tax.
2. Amazon has several fulfillment centers across North America, expanding and growing each year. Sellers have tax collection responsibilities in these states that have a sales tax.
3. Once nexus is established in these states, all sales from the online retailer (from all sources, not just through Amazon) become potentially taxable and reportable to that state.
4. Amazon provides a service called “Tax Collection Service” to their FBA retailers that will charge and collect sales tax when ordered through the Amazon process. The online retailer however, through agreement with Amazon, is responsible for set up and maintenance of this service.
It is important for companies to understand where they have nexus and to keep up with taxability and rate changes within those states and subsequent jurisdictions. Vertex Inc. can automate your sales and use tax processes, and we have teamed up with leaders in the industry to help you determine where you have nexus.