Any Thoughts On Amazon's New Sales Tax Collection Service?


#1

Amazon is planning to launch a Marketplace Tax Collection Service on Jan 1. The program will calculate, collect and remit sales tax on behalf of third party sellers. Washington state will be the first state to participate.

Anyone know of any other states that are planning to participate?


#2

>
Amazon will tell us as soon as they come to any agreement (like with this one).

That will not be negotiated in the media and the sellers are all just mushrooms.

Dave


#3

Washington State does not have a Sales Tax. They have a Use Tax, which puts the burden of paying Sales Tax on the buyer.

While most states have a Use Tax, it’s seldom enforced.

Amazon entered into an agreement with Washington State to collect and remit the Sales Tax for their buyers. One has to assume, Washington State made it “worth their while.”

This is no way affects any of us, including Amazon sellers located in the State of Washington.

Funky


#4

I live in Washington state, and we do have sales tax, typically 9-10% (and according to the last return I filed a “Use tax” as well). I believe you are right that the burden of paying is on the buyer, but I still collect sales tax in Washington through Amazon’s current sales tax service and file and pay the return to the state department of revenue.

The tax is destination-based, and Washington State does not make it easy for e-commerce sellers to calculate it. Because regional and local tax rates vary, the address of each customer has to be coded separately in order to calculate the appropriate rate. I’m hoping the new service Amazon is rolling out will make this process much more streamlined.

The tax that Washington State does NOT have is income tax. Too bad for our state, that a few of the richest men in the world made their fortunes here: Bill Gates, Paul Allen, and of course Jeff Bezos.

Edited by: jubileebooks on Nov 29, 2017 2:25 PM


#5

No wonder not everybody’s not running to pay Sales Tax. At least they could make it easier.

In Texas, Sales & Use Tax is calculated by the city/town you have your business. That gets added to the State rate, and is the number listing under the column +Custom Rate.+ We send the entire amount to the State; they in turn distribute the appropriate amount to the City and County jurisdictions.

Question?

If you are collecting the Sales Tax for orders shipped within the State of Washington, will you be affected by Amazon’s new policy?

Funky


#6

> No wonder not everybody’s not running to pay Sales Tax. At least they could make it easier.
>
> In Texas, Sales & Use Tax is calculated by the city/town you have your business. That gets added to the State rate, and is the number listing under the column +Custom Rate.+ We send the entire amount to the State; they in turn distribute the appropriate amount to the City and County jurisdictions.
>
> Question?
>
> If you are collecting the Sales Tax for orders shipped within the State of Washington, will you be affected by Amazon’s new policy?
>
> Funky

I was unaware that there was a new policy until I read this thread today and am still unsure what the policy is. Every quarter I spend a few hours combining AZ sales and shipping info for Washingotn onto a single spreadsheet using Excel’s Vlookup function (which I learned solely for this purpose). I then then have the addresses coded by Wash Dept of Rev and in turn file this and other sales information to my DOR account – all this to pay roughly $1000 in sales tax annually on orders shipped to Washington. I have called my state DOR a few times over the years to see if I was missing something – surely it shouldn’t be this hard, right? They always tell me that this is what the voters wanted, and they don’t seem to appreciate how challenging filing destination-based sales tax is for third-party sellers. I’m hoping the change means that Amazon will handle the process of filing for me. I’ll likely check with my state department of revenue though to see what this means for me.


#7

As was pointed out to you previously when you made this false claim, Washington DOES have a sales tax. It’s easy to find out with a simple Google search.

Perhaps you should take your own advice, and check your facts before making statements.


Letter in mail from California Dept of Tax and Fee Administration
#8

No wonder the burden is on the buyer, and not the seller. I can only imagine how difficult it is to keep track of.

If you are using Amazon’s Tax Collection Services, you could probably stop that and have Amazon collect if from the buyers and forward it to Washington State. Then, you’d only have to remit the Sales Tax for transactions on other venues.

Say, Washington State is beautiful, but business is booming in Texas. They make life easy for us :O)

Funky


#9

Hi! I am in Washington too and just got off the phone with the Washington State Department of Revenue. I told them some of my online sales are generated through Amazon and I am currently collecting and remitting sales tax. I asked how the upcoming changes will affect me and if I should do anything differently starting in January. Here is a transcript of my chat:

+Please wait. A representative will be with you shortly.+
+Note: Information given through chat is not legally binding.+

+DoR says:+
+Hello Susan. My name is Xxxxx how can I help you?+

+Susan says:+
+Hi Xxxxx! I sell online and the majority of my sales are through Amazon. I understand there will be some changes going into effect in January and am trying to figure out how this will affect me. I’m a Washington business (Sole Proprietor) and currently collect and remit sales tax. Will I want to do anything different beginning in January?+

+says:+DoR
+You’re doing everything correctly. This change is for the people who don’t charge sales tax to their customers.+

+Susan says:+
+Okay. That’s good news. So then, should I stop collecting since Amazon will be collecting or just leave everything exactly the same?+

+DoR says:+
+Amazon doesn’t automatically collect sales tax so if you are collecting the sales tax you will continue to collect it.+

+DoR says:+
+Unless you have an agreement with Amazon that they are collecting the sales tax.+

+DoR says:+
+The change is more for out of state sellers.+

+Susan says:+
+So confusing. Okay, I think I understand. This is all to do with sales tax nexus due to storage of goods in FBA warehouses by remote sellers. Those of us in Washington, just keep doing what we’re doing. Am I understanding you correctly?+

+DoR says:+
+Yes.+

+Susan says:+
+Cool, thank you for that. Then, a follow up question…just out of curiousity, do the remote sellers have to file these taxes Amazon will be collecting or is Amazon going to be responsible for filing on their behalf?+

+DoR says:+
+Everything is not clear yet. Its a new law that takes effect next month. DOR is still working out all the ins and outs. We will send out publications and instructions when everything is finalized. I will provide you with a link to our information page on Marketplace Fairness.+

+DoR says:+
+https://dor.wa.gov/find-taxes-rates/retail-sales-tax/marketplace-fairness-leveling-playing-field+

+Susan says:+
+Okay. That sounds about right. Everyone is still working on the ins & outs of this issue and there’s no solid information anywhere. Pretty frustrating time. Well, thanks so much Xxxxx, really appreciate your time. Have a great rest of your day!+


So, as far as I can tell, those of us who are located in Washington and currently collecting/paying sales tax probably won't have to do anything differently....but they are still deciding on the process for out of state sellers. What a mess....seems like there should be a solid plan of action in place for this but I guess we just have to wait and see what they decide. Hope this helps.

Susan


#10

Thank you for taking the time to transcribe your communications with the Wash DoR.

Considering what a big economic presence Amazon is in Washington state, not to mention the rest of the world, I am always stunned at how little the DOR knows about how selling on Amazon works. I called the Wash DOR in the past couple of years to complain about the process of remitting salex tax and to ask if there was a simpler way to go about it. The DOR expects sellers to have their customer address base at the beginning of each quarter as though they could somehow psychically intuit every Washington customer who was going to buy from them in the next three months. The woman I spoke to didn’t even know that sellers could sign up to have Amazon collect sales tax on their behalf. I’ve suggested a couple of times that the DOR make the quarterly rates and location codes available beyond the end the current quarter but to no avail. If a Washington sale comes in at fifteen minutes before midnight on New Year’s Eve, I can’t get a guaranteed accurate location code unless I submit the address to the DOR immediately.

I’m still hoping that Amazon will allow Washington sellers to sign up for the new service. It would make life easier. I suppose that the reason that Washington State instituted destination-based sales tax system in the first place in 2008 was so that they could collect on all sales shipped to Washington addresses, including interstate sales. At first I thought the system was so complicated that it discouraged sellers from paying sales tax. But with Amazon’s cooperation, after 9 years, it looks like it could generate substantial revenue.


#11

> This is flat out untrue, and totally illegal.
>
> If they are paying Sales Tax on behalf of out of state sellers, they are not taking it out of my account.
>
> Funky

I don’t think that Amazon will take money from your account. The customer pays the tax in addition to the price you set. The main draw back that I see would be that customers might be more inclined to purchase from a seller who does not charge tax, but if all sellers will have to charge Washington buyers tax, then the playing field is again leveled.


#12

Yes.

It’s going to be interesting to watch going forward.

Funky


#13

It was not sent out as an email. It was a new FAQ

You can find it at:

https://sellercentral.amazon.com/gp/help/help.html/?itemID=G7VYHGJ8ZT2M58CP

Dave


#14

Right? That conversation made things clear as mud. Every conversation about Sales/Use or any other kind of tax just confuses things more and more. My brain is moosh.
[quote="jubileebooks"]

I’m still hoping that Amazon will allow Washington sellers to sign up for the new service. It would make life easier. I suppose that the reason that Washington State instituted destination-based sales tax system in the first place in 2008 was so that they could collect on all sales shipped to Washington addresses, including interstate sales. At first I thought the system was so complicated that it discouraged sellers from paying sales tax. But with Amazon’s cooperation, after 9 years, it looks like it could generate substantial revenue.
[/quote]



Yes, I agree! That’s one thing I think the DoR agent I chatted with might be right about. I know a lot of sellers got notices or letters about Amazon and collecting sales tax on their behalf…but I did not. Maybe because I’m in Washington and they aren’t doing it for people in Washington? Did you get one jubileebooks?

Susan


#15



Thanks Dave!

Appreciate the link! During conversations with DOR agents in various states, I was told a lot of Amazon sellers received letters about Amazon’s new collection service. Maybe they’re talking about something else? Were there any letters sent out by Amazon about taxes recently? Just want to be sure I didn’t miss anything important.

Thanks again!
Susan


#16

> Yes, I agree! That’s one thing I think the DoR agent I chatted with might be right about. I know a lot of sellers got notices or letters about Amazon and collecting sales tax on their behalf…but I did not. Maybe because I’m in Washington and they aren’t doing it for people in Washington? Did you get one jubileebooks?
>
> Susan
>

I have not received any letters or emails re: sales tax and only just found out about the new tax collection service from reading this thread over the past couple of days. After reading the FAQ that BoardGames4Us provided the link to, I still don’t feel comfortable with the idea that “No action is required on your part where Amazon automatically calculates, collects, and remits sales tax.” I had been using AZ’s Tax calculation service and remitting Wash. sales tax myself. Amazon already has my Washington State UBI number, so will the sales tax automatically be posted to my quarterly return with the Wash DOR?


#17

Yes, I am with you...I'm not comfortable with that statement either and, since the DoR doesn't seem to have a clue how it's going to work yet, I'm not sure how we are supposed to know what to do. I guess I'm going to call back in January to see if they've come up with a process. I'll post anything I find out.

Susan


closed #18

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