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Sales Tax for Jet Sellers

  • Feb 6, 2017 | Laura McCamy

Who will be the next Amazon? For years, the answer to that question has been ... Amazon. No one can touch the volume and reach of the Amazon marketplace.

In 2015, plucky startup Jet.com positioned itself to become the next big ecommerce platform. In 2016, Walmart bought Jet to bolster its ecommerce presence. With Walmart’s backing, Jet sellers could find themselves on the crest of the next big ecommerce wave.

If you want to jump into this up-and-coming marketplace, here are a few things you need to know.

Jet Sellers Marketplace

Unlike the bigger online marketplaces (but just like its parent, Walmart), Jet sellers need to apply and get approved before they can sell on Jet.com. One of the requirements for Jet sellers is that they provide Jet.com with lower prices than any of their other vendors. Jet’s biggest struggle has been to compete with Amazon on price.

Jet.com has an unusual model for Jet sellers. More than one seller can offer the same product, but there will always be only one listing for each product. When a customer buys a product, Jet chooses one of the Jet sellers offering that product to fulfill the order.

Then Jet gets really unusual: The site buys products from Jet sellers in a flash sale, then instantly resells them to the customer. Jet sellers still handle fulfillment and can charge for shipping, but Jet.com takes care of all customer contact.

Jet sellers pay a commission to Jet.com for each sale. The terms are complex and worth a read before you apply to sell on Jet.com.

Sales Tax for Jet Sellers

While the sales policies of Jet.com are complex, sales tax for Jet sellers is refreshingly simple.

Because Jet buys products from Jet sellers in a flash sale before reselling to Jet.com members, Jet is the retailer. Here’s what Jet.com says about sales taxes: “Jet is the seller of record and Jet will collect sales tax and remit collected taxes to taxing authorities. This approach is intended to simplify sales tax calculation and processing for both Jet Members and Retail Partners.” Jet even puts its multistate sales tax certificate online for all to see.

This means that your sales on Jet.com are essentially wholesale sales (to Jet). Jet sellers will not have nexus in new states because of their affiliate relationship with Jet.com. It doesn’t get simpler than that.

If you are someone who hates dealing with sales tax and nexus issues, becoming one of the growing list of Jet sellers might be just the thing for you. But do keep in mind that you might be giving up one set of complicated regulations (sales taxes) for another (Jet’s pricing and commission policies). On the positive side, policies regulating Jet sellers probably change less often than sales tax regulations.

Of course, if you sell on Amazon, eBay, Walmart.com, or other ecommerce marketplaces, you will still have to deal with sales taxes. You don’t have to handle ecommerce sales tax rules on your own, though: Avalara TrustFile has your back.

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