Whether you sell at an online marketplace or at a brick and mortar store, sales tax is a part of life for most retailers. If you’re an Amazon FBA seller, sales tax preparation and filing is a bit more complex than it is for average retailers. This can be an even more overwhelming experience if you’re just starting out. We created this Amazon FBA sellers sales tax guide to help you understand the basics of sales tax and make the process less stressful for third-party retailers like yourself.
FBA Sellers Sales Tax Guide
When Do You Need to Collect Sales Tax
As an FBA seller, it’s your obligation to obtain sales tax in states where your selling meets two criteria: sales tax nexus and product taxability. By knowing both you’ll be in a good position to know when and if you are responsible to obtain taxes from your customers.
What is Sales Tax Nexus
Sales tax nexus is also referred as your “significant connection” to a state. If you have sales tax nexus in a state that requires sales tax collection, then you have to charge sales tax to your customers in that state – regardless of where the product is shipped from.
While you automatically get a sales tax nexus in your home state, you can also create nexus in other states. One of the ways that this can happen is when you store inventory for sale in the state. As an Amazon FBA seller, it’s important that you are aware of this. By storing your FBA inventory in Amazon’s warehouse, you immediately have sales tax nexus in a state.