Where is my Amazon FBA Inventory Triggering Nexus?
- May 24, 2015 | Ryan O'Donnell
A common question we hear from Amazon sellers is, "Where does the FBA program give me sales tax nexus?" The answer is ever changing as Amazon continues to invest in new warehouses. As an Amazon seller participating in the Fulfillment by Amazon program (FBA) program, you'll want to stay on top of where you have a responsibility to collect sales tax. But...how?
You can begin by reviewing the states in which Amazon has active fulfillment centers. At this point in time, Amazon acknowledges warehouses in the following states: Arizona, California, Delaware, Indiana, Kansas, Kentucky, Nevada, New Hampshire, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Washington. However, new warehouses are being added all the time as Amazon invests heavily in faster delivery so don't assume those are the only states you'll ever have to consider when reviewing your sales tax exposure due to participation in the FBA program.
The next point to be aware of is that of materiality. As you've likely read on our blog many times, just because you have product stored in an Amazon fulfillment center, that doesn't mean you have to rush out and register your business to collect sales tax in that state. Determining when is the right time to begin collecting sales tax is a more complicated question that requires sellers to review their growth as well as their tolerance for risk.
Which FBA Warehouses are Storing Your Products?
In order to determine in which states Amazon has stored your goods, you'll need to determine the actual warehouses in which your inventory is stored. Amazon makes this information available within the Inventory Event Detail Report, available to all Amazon sellers.
To generate this report from within your Amazon Seller Central account, follow the steps listed below.
Step 1: Log into your Amazon Seller Central account.
Step 2: In the top menu, click on REPORTS > Fulfillment.
Step 3: In the leftmost menu, under "Inventory", click on "Show More..." and then click on "Inventory Event Detail".
Step 4: On the Inventory Event Detail page, click on the "Download" Tab.
Step 5: Set the appropriate Event Date and click "Download" to begin generating the report.
Transferring Amazon Data to Spreadsheet
Once your Amazon Inventory Detail Report is ready, you can download it and open it in any modern spreadsheet program (Excel, Google Sheets, or Apple Numbers are good options). Once you have the report opened, you should see something like the image below.
See the "fulfillment-center-id" column? That is what you care about. Each Amazon Fulfillment Center (warehouse) has its own unique ID. By reviewing the IDs listed, you can determine where your products are being stored. Not familiar with the warehouse IDs listed? Review our list of Amazon warehouse locations and you'll be set.
State Sales Tax Liability Report
Now that you know the states your goods are being stored in, you need to understand your sales to those states. You can accomplish this by reviewing your Amazon sales through the Seller Central dashboard or by importing your sales into Avalara TrustFile. We will provide you with a free state-by-state sales tax liability report. Use this along with the spreadsheet you created to understand how participating in FBA has impacted your sales tax exposure.