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4 Sales Tax Changes for the Amazon FBA Seller in 2017

  • Jan 11, 2017 | Laura McCamy

The one constant in Amazon’s growing online retail empire is change. If you are an Amazon FBA seller, you’ll want to keep tabs on the latest developments so you aren’t caught off guard by new sales tax obligations.

Here are four changes Amazon FBA sellers can expect in 2017.

New Amazon FBA Seller Nexus

Your merchandise sitting in an FBA warehouse is enough to give you sales tax nexus in most states. Nexus is a physical presence that prompts an obligation to collect and remit sales taxes when you ship an order to a customer in that state.

Ohio, Massachusetts, Minnesota, North Carolina, and Kansas all saw their first Amazon fulfillment center in 2016. Those are new states where Amazon FBA sellers might need to collect sales tax.

In addition, Amazon opened new fulfillment centers in several states with existing FBA locations, including Illinois, California, Pennsylvania, and Texas. These aren’t the only new centers in 2016, but they are the ones of concern to Amazon FBA sellers because these states all have origin-based sales tax rates. This means that the sales taxes are based on the tax rate at the shipper’s location, so the local sales tax rates at these new fulfillment centers could affect your sales tax obligations.

Expect more expansion in 2017. There are already three new fulfillment centers planned in origin-based sales tax states: Illinois and Texas.

New Amazon FBA Seller Tax Rates

Once you have nexus and have to pay sales taxes because of your status as an Amazon FBA seller, the next thing you need to worry about is tax rates. The rates in several FBA states will change for 2017. Expect statewide tax rate changes in Florida, Illinois, Kansas, Minnesota, Washington, and Wisconsin. Keep an eye out for new local rates as well, in California, Georgia, and Nevada.

New Amazon FBA Seller Click Through Nexus

Your status as an Amazon FBA seller can give you affiliate or click through nexus, even if you have no physical presence in a state. Quite a few states already have click through nexus laws, including California and New York. Click here for a complete list. In 2016, four states passed new click through nexus laws: Louisiana, South Dakota, Oklahoma, and Washington. As an Amazon FBA seller, Washington is the one that should concern you the most, since that is the only state with an Amazon fulfillment center.

In addition, several states have pending click through nexus bills that could be passed into law in 2017, including four that are home to fulfillment centers: Minnesota, Illinois, Ohio, and Massachusetts.

Sales Tax Changes for 2017

2017 will see tobacco taxes go up and tampon taxes go down in some states. Several cities have added a special tax to sodas. Sales tax exemptions have been both added and repealed.

Some of this is no concern of yours. If you don’t sell aquariums in Georgia or gold bullion in Ohio, you don’t need to worry about changes to those tax rates. Still, 2017 is bound to bring an onslaught of sales tax changes in different states relating to different products.

You could go it alone. Or you could turn to sales tax automation software and get the information you need when you need it.

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
Laura McCamy
Avalara Author Laura McCamy