Guide to Sales Tax Collection in Amazon
Sales tax for Amazon sellers is complex. Especially so if you’re leveraging the Fulfillment by Amazon (FBA) program. We’ve broken down the process into easy to digest chapters that will help you better understand the overall sales tax compliance system. You’ll learn the proper method for collecting, filing, and remitting sales tax from Amazon sales to state and local tax authorities.
Table of Contents
For Amazon sellers, managing sales tax compliance can be a real pain. So much so that many ignore sales tax filing and remittance altogether. In our guide, we'll walk you through the necessary steps to set up sales tax collection within Amazon and cover how to file and pay the sales tax you collect.
The first step in managing sales and use tax compliance on Amazon is to understand the transactional tax process. We'll discuss what it means to be an agent of the state and cover when Amazon sellers do and do not have to worry about sales tax (hint: it's all about nexus).
Fulfillment by Amazon (FBA) offers sellers around the world an easy way to fulfill orders. With warehouses located across the US, Amazon will pick, pack, ship, and manage orders for Amazon sellers.
To collect sales tax on Amazon sales, you'll need to work within your Amazon Seller Central dashboard to set up your tax collection rules. In this chapter, we'll go over the process of getting this done.
Many Amazon sellers have a need to access their transaction data for purposes like determining FBA nexus states, auditing tax exempt sales, and running sales tax reports. We'll show you have to get your Amazon sales data in CSV form.
At this point, you should have your Amazon account collecting sales tax on every taxable sale. Well done! There are a few minor sales tax details to cover before you're ready to be done and we'll do that in this final chapter.