Avalara > Blog > Ecommerce > 5 Things Every Amazon Merchant Should Know About Product Tax Codes

5 Things Every Amazon Merchant Should Know About Product Tax Codes

  • Feb 26, 2015 | Ryan O'Donnell

If you're planning to sell products through Amazon, your going to want to learn to use the Amazon Seller Central dashboard to set up products, tax settings, and other key pieces of the online merchant puzzle.

Amazon offers Product Tax Codes (PTC) sellers can use when setting up their online account. At first glance, these tax codes can be intimidating, but they are intended to make your life as an online merchant more simple.

Here are five key aspects of PTC every Amazon seller needs to understand.

  1. PTC are intended to help merchants set up taxability rules quickly and easily. That's right, what you may have thought of as another layer of complexity is intended to make managing your inventory more simple. It does this by predefining the tax rules associated with a specific product category and offering tax guidance around common product that fall into these categories.
  2. All PTC categories have items that are included and items that are excluded. In keeping with the desire to simplify taxability, Amazon wisely choose to call out products that are included and products that are excluded from defined categories. This makes it easy for sellers offering common goods.
  3. Amazon Sellers can review state-by-state tax rules within a PTC. Consider Product Tax Codes as a research tool. If you are interested in gaining a better understanding of the tax rules within a given state for a product you are selling, that information is available.
  4. PTC can be overridden at the offer level. Sellers are never bound to a Product Tax Code. If you want to offer a specific tax situation for a special offer, Amazon allows you to override an assigned PTC from your account dashboard.
  5. Amazon offers two overarching PTC for "tax everything" and "tax nothing". If, after all we've mentioned, you find yourself thinking, "I'm not interested in getting into such granularity", you can simply tax everything (PTC code, A_GEN_TAX) or tax nothing (PTC code, A_GEN_NOTAX) by choosing the appropriate general Product Tax Codes Amazon has set up. However, beware of the fact that you may (or may not) be collecting sales tax where you need to be.

Taking the time to understand the Amazon Seller Central system when you get started can set you on the path to success in managing your tax liability. We advise all Amazon sellers to familiarize themselves with their administrative dashboard and to clear up any points of uncertainty early in the life of their online business. Refer to our Guide to Amazon Seller Central taxes to get started.

File Amazon sales tax returns quickly and easily

Amazon is just one of over 700 sales tax filing integrations Avalara offers online sellers.

Learn More

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Ryan O'Donnell
Avalara Author Ryan O'Donnell

Why automate

Increase the accuracy of your tax compliance with up-to-date rates and rules with our cloud-based tax engine.