Don't Want to Collect Sales Tax? Sell on Jet.com
- December 11, 2015 | Suzanne Kearns
Jet.com has big plans in the ecommerce market -- the innovative retail site is attempting to change the face of ecommerce shopping via "smart carts," which offer progressively lower pricing as new items are added.
It is also establishing a novel relationship with its ecommerce sellers to take sales tax payment off their plates, a move that may well prove attractive to online businesspeople who are tired of handling such logistics.
What Is Jet.com's Plan?
Jet.com intends to complete with Amazon Prime by offering deep and ever-increasing discounts. The site also offers free shipping on orders of at least $35 and a commitment to offer the lowest price available online (backed up by a widget on the site that shows prices for the same item at other sites).
Jet's owner, Marc Lore, used to run Diapers.com, which Amazon bought in 2011 for $545 million. After the sale, Lore went on to work for Amazon for two years, so he knows well what he's up against.
But how can a new kid on the e-block possibly convince ecommerce sellers to try its platform when Amazon offers them so much? One major way is by offering to take the sales tax burden off of sellers completely.
What About Sales Tax?
One of Jet’s biggest draws for ecommerce sellers is the announcement that its retail “partners” do not have to collect sales tax when making sales through the site. As you know, when you sell on Amazon, either individually or via Fulfillment by Amazon, you are responsible for collecting sales tax in every state where you or Amazon has nexus. That can be confusing, and it has caused a lot of ecommerce sellers to have nexus in states where they have no physical presence.
But Jet changed all that in an instant with its tax policy. The company announced that it is to be considered the seller of record for all of its buyers. That means Jet.com sellers will sell their products to Jet, which will in turn sell them to consumers.
To make it official, Jet provides sellers with resale exemption certificates so Jet can buy products from sellers tax-free. Jet will be the one to collect tax on all sales and remit those taxes to the proper authorities. According to Jet, the site has nexus in Kansas, Nevada, New Jersey, New York, and Utah.
If you want to expand your ecommerce reach to Jet.com customers, you can apply to become a Jet “partner” and start selling your goods on the site...without having to worry about sales tax.