Disclosure to the State of Wisconsin Department of Revenue


#1

Just got this email. I am an out of state seller, not sure who all it went to.

Occasionally, Amazon is required by law to disclose information about your business to tax authorities in jurisdictions where you have significant sales or meet other criteria set by the tax authority. We are writing to notify you of one such disclosure. Amazon received a valid and binding legal demand from the State of Wisconsin Department of Revenue (WDOR) requiring that Amazon disclose the following information about your business:

• Contact information (name, address, and US federal tax ID number)
• Amount of your Amazon.com sales to Wisconsin customers during the 2017 calendar year
• Wisconsin sales tax, use tax, or local tax collected (if any) on those transactions and turned over to you in accordance with your tax calculation settings.

To comply with our obligations under the law, we plan to provide this information to the WDOR by December 17, 2018. This disclosure has no impact on your seller performance or account health on Amazon.
In many cases, sellers who register and file taxes in Wisconsin already provide information on their Amazon business as part of their tax filings. Since each seller’s business and tax needs are unique, we encourage you to consult with a tax advisor to answer any questions you might have. You can also refer to the following resources in Seller Central:

• Solution Provider Network (sign-in required), a directory with information about several tax advisors: https://sellercentral.amazon.com/gp/help/external/G201687890
• Tax calculation services (optional) for calculating sales and use taxes in the US: https://sellercentral.amazon.com/gp/help/G200787660.

Thank you for selling on Amazon,

Amazon Services


#2

And your question is?


#3

Do you have inventory in any of the Wisconsin FBA warehouses or do you sell $100k or 200 individual transactions to residents of Wisconsin?

If so, you are responsible for registering to collect WI state sales taxes. Doesn’t matter where you live.

If you have a physical nexus (FBA warehouses), you’ve had this liability for a while. If this is the case, you’ll need to talk with a sales tax expert straight away. Depending on the amount of sales you’ve had, you may have a problem.

If you only qualify for the economic nexus, you’ve got a little more time, as that law just changed with Wayfair.

If you’re looking for help on this, you’re going to need to talk to a pro. There’s a TON of crappy advice on this forum on the topic of sales taxes. You’ll be able to find someone who will tell you that you don’t have to pay, but that doesn’t mean that they’re right.


#4

I just did a bit of research, and if you’re using FBA, you’ve probably got a nexus in Wisconsin:

11.97(3)('c) “Any retailer maintaining, occupying, or using, permanently or temporarily, directly or indirectly, or through a subsidiary, agent, or other person, an office, place of distribution, sales or sample room, or place, warehouse, or storage place, or other place of business in this state.”

What does this mean? If you have a nexus, you should have been collecting WI sales tax on all of your sales into WI, not just what passed through the FBA warehouse. You could be liable to pay all of those back taxes, penalties, and interest. Not trying to scare you, but this is serious. You should really get a tax attorney who can guide you through this.


#5

Pretty sure wayfair made it clear that you could not go back in time and charge taxes if there was no physical nexus. Prior to the ruling that is. If you had a physical location, or items in an Amazon fulfillment center, then yes, you might have some serious issues.


#6

Having inventory is not legally a nexus.

If you are an out of state seller, you are not obligated to collect sales tax in another state.

There is no federal action that has authorized this.


#7

Inventory in Amazon’s FBA warehouses is irrelevant.

Funky


#8

Tear it up and throw it away.

Wisconsin has no jurisdictional authority to collect Sales Tax outside of their own state line.

Funky


#9

This isn’t true. There are many states like Wisconsin that specify that having inventory in the state, regardless of whether it’s your own warehouse or a contract warehouse (like FBA) creates a physical nexus.

Even if you think that those laws shouldn’t be or aren’t Constitutionally-valid, you’d have to litigate that through the courts. Once the tax is assessed by a State revenue collection agency, it will be pursued as valid. They don’t have to take you to court to get their money, you have to take them to court to argue that you don’t owe it.

From what I’ve seen, it would be a long shot to win, even if you have the finances to go that route (for most of us, the cost of fighting a tax assessment like that would be more than the tax itself). There are multiple Supreme Court rulings (Complete Auto Transit and Tyler Pipe specifically) that bolster the rights of states to establish a nexus for out-of-state sellers under a variety of conditions.

It’s always possible that one could ignore an assessment (which the letter posted by the OP is not) and it would just go away. However, be clear that this would be because the agency deemed it not worth their time / effort to pursue, not because they don’t have the legal ability to assess and collect. This is why it’s important to hire an expert - they may have insights on what cases the agencies will pursue and which they won’t, and they’ll certainly be more equipped to deal with the details of any assessment made.


#10

Same old arguments on nexus are being recycled because no one understands the full effect of Wayfair yet.

I continue to believe inventory in an FBA warehouse is a nexus, just as inventory in a public warehouse has been a nexus for decades.

Many of the people who argue otherwise do not even know that public warehouses exist, let alone that there are many years of precedent.

Many of those people also fail to know that Wayfair is primarily a dropshipper, and has very few nexus. Wayfair was as close to an ideal company to establish a precedent on sales tax without a nexus as one gets.


closed #11

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