Tag Archives: Taxes

Sales Tax and Amazon FBA: Have We All Been Getting It Wrong?

Alex Knight interviews attorney Paul Rafelson about US sales tax for Amazon FBA sellers, and the MTC’s amnesty. Should you opt in?

As you may have seen, sales tax is a rather hot topic for Amazon sellers at the moment, following the Multistate Tax Commission’s decision to hold a US sales tax amnesty for online sellers.

With the October 17th deadline looming, there is much debate about whether Amazon sellers are even liable for sales tax, and whether they should make a voluntary disclosure under this amnesty. This week, I spoke to Paul Rafelson, a state and local tax attorney, to get his opinions on both of these topics.

What Paul said surprised me, as it was very different to the orthodox view of FBA and sales tax. Ultimately, he believes that Amazon sellers who fulfill their orders using FBA may not be liable for sales tax at all. His contention is that sales tax “nexus”, usually the key consideration for Amazon FBA sellers, is actually irrelevant, because Amazon itself is the “retailer” under sales tax law and should be responsible for collecting sales tax themselves.

We also talked about the MTC amnesty, which Paul believes Amazon sellers should not comply with because, in his opinion, it is a bad policy, based on a weak understanding of the realities of selling on Amazon. He also fears that if sellers comply, they could be hit with further taxes, such as income tax and franchise tax, and end up crippled by a huge compliance burden.

You can watch the full interview with Paul above, and we’ve also included a full transcript of the conversation.

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Selling on Amazon in the EU? Your VAT Obligations Explained

Claire Taylor demystifies Amazon’s European fulfillment options and their VAT implications – including the new Pan-European FBA

This post is by Claire Taylor, CEO of SimplyVAT.com – a company which helps ecommerce businesses trade across borders in compliance with complex European VAT legislation.

Amazon is steadily implementing its amazing vision to be the greatest online shopping marketplace for millions of customers across Europe. It now offers access to EU customers through five marketplaces: Germany, UK, Spain, Italy and France. It has 31 distribution centers in seven countries and is constantly looking to increase this number.

Amazon wants its sellers to access the huge mature ecommerce market within the EU, which last year grew 12% to a staggering €500 billion. There are 96 million online shoppers in the EU spending an average of €1,500 per year. It’s a great opportunity for sellers to access new markets, increase profits and ensure sustainable online retail businesses!

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Sales Tax Nexus for Online Sellers: Amazon FBA, 3PLs and More

This post is by Mark Faggiano, Founder and CEO of TaxJar, a service that helps more than 5,000 online sellers with sales tax calculation, reporting and filing. TaxJar offers a free 30-day trial.

If you are an online seller in the USA, you’re probably well aware that you are required to collect sales tax from buyers in your home state. But, as with just about anything to do with tax, it gets a little more complicated than that.

This post provides the fundamentals for sales tax nexus for online sellers, including what creates nexus, and what that means when it comes to collecting sales tax from your customers.

It covers the impact of using Amazon FBA (and other third-party fulfillment services) on sales tax nexus, how to determine whether a fulfillment service gives you nexus, and what to do if it does.

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US Sales Tax Holidays: What Online Sellers Need to Know

Sales Tax Holidays 2016 State Map

This post is by Jennifer Dunn, Chief of Content at TaxJar. Throughout her writing career, she has specialized in demystifying tricky income and sales tax concepts for business owners. Connect with Jennifer at @TaxJarJenn.

“Tax-free weekend.” “Severe weather preparedness holiday.” Depending on what part of the country you’re in, you may see sales tax holidays crop up in your state from time to time. As a buyer, they can be a great way to save a few bucks on school supplies or a new, more energy-efficient washing machine.

But as an online seller, sales tax holidays can present a major headache. If buyers are buying school supplies from your out-of-state online store during the tax-free weekend, they’re going to expect a tax-free purchase. If you aren’t prepared, you may end up with some unhappy customers.

But before we get to how online sellers should handle sales tax holidays, let’s back up. What’s the deal with sales tax holidays anyway?

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US Sales Tax for European Online Sellers: The Essential Guide

US Flag Maze

This post is by Emma Scotton, Director and Founder at independent ecommerce consultancy KnowGlobal. KnowGlobal offers advice and support to online businesses, both large and small, on all aspects of their ecommerce offering. They help clients grow their businesses both domestically and at an international level.

Ecommerce is booming and businesses are increasingly fighting for a share of the lucrative global market by looking at ways to take their online business cross-border.

The US market makes for a particularly attractive option, with US consumers expected to spend $327 billion online in 2016. Moreover, the number of web shoppers in the US is expected to grow by 15% this year to 192 million and each shopper will be spending more on average, up 44% from 2012 to $1,738 per year.

What’s more for marketplace sellers is that global marketplaces are expected to own nearly 40% of the online retail market by 2020, providing a viable and rewarding route to new markets for businesses of all sizes.

In the rush to expand, however, merchants can overlook areas of international business that are unfamiliar. Ensuring you support international payments and have a logistics network capable of fulfilling orders is important, but with new opportunities come new complexities, particularly when meeting the challenge of sales tax compliance in the United States.

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