Im saying if a seller does not sell 100,000 in say Minnesota, he wouldn’t even need to worry about filing anything for MN. Say all states had the 200/ or 100,00 a year threshold. Then really you would have to sell 5,000,000 that is 100,000 in 50 states annually to have to file for every state. Maybe you only meet that threshold in two states. so really you would only need to keep track of two states for filing. Hypothetical. States won’t want to bother will the really small sellers. It would crash their system. But Idk this is just limited understanding and from what I’ve read.
This is wrong. I spoke to a tax lawyer and so should you.
Right WA and PA have no threshold. Dosnt mean other states will be the same
After I read all the answers I just proof my thoughts. Most of the time this forum is useless. People please give the advise only if you know the answer, don`t just guess
Look. None of us know what the hell is going on yet. We will all have to wait for sure answers
amazon has threshold of 20k and 200 sales that is impossible for small tiny sellers to reach in a year but maybe in lifetime.
According to the tax lawyer I spoke to the law is that you are responsible to pay taxes in states where you have nexus or a business connection. Each state has it’s own rules of what is considered a connection. You could have nexus in one of two ways:
1- If you have a warehouse in that state - according to the rules of ALL states. This means that every state were FBA has warehouses you should have been collecting sales tax for a while already. This is the rule because FBA’s is warehousing the product for you and it is therefore you storing the the merchandise in the warehouse.
2- The new law as defined by the Supreme Court is that even if your connection to a specific state is just that you ship merchandise to that state you get nexus each state according to it’s rules. Most states that have made rules so far are either several hundred transactions OR $100,000 - $200,000 in sales per year. CA, PA, RI & WA have much lower limits of around $10,000. Although Amazon collects it for us in those states, if you sell on other sites or on your own web site and ship to those states you yourself are responsible to collect sales taxes on your non Amazon orders.
I think many sellers have not bothered collecting sales tax until now in FBA states as it’s too time consuming and they are generally to small for the states to bother coming after them to collect.
Collecting tax does not equal filing
If Amazon is collecting, we are still responsible for filing as the status stands today.
Amazon sales tax collection does not follow the threshold set by states so it will start collecting from the first $. Now if you did not meet the threshold, you have to refund each and every customer you collected from
File sales tax for that state anyways even if you did not meet the threshold.
If you kept that money and did not file sales tax, you will open yourself to lawsuits from the consumer as well as the state.
So everyone loses but CPAs and tax lawyers win!!
This imitative failed to pass the NH House of Representatives meeting in special session.
Amazon doesn’t recognize seller thresholds, because Amazon is who is technically receiving payments for orders at the time when orders are placed, which includes sales tax. They have to tally up sales tax site wide for each state, when they have to pay the sales tax to the states. and well…since we the merchants didn’t create Amazon, the customers are theirs…
Thanks for the update, I am not sure what logic was used for the purpose but thats why we need to start calling our representatives.
This is only true of states like WA and PA which passed “marketplace facilitator” laws. Amazon is not required to collect sales tax on our behalf under the type of law that SD and others have passed, and shows no sign of doing so.
Marketplace facilitator laws have lulled many sellers into complacency, as they falsely assume that Amazon will collect on our behalf in every case.
The supreme court ruling allows states to collect sales tax. In order to do so, they have to petition Amazon and every other website selling product to collect it. Washington, and a few other states have done that, but not all.
Agreed. We will start getting notices soon from other states. Brace yourself!
If you are collecting sales tax for every transactions then you are screwing the customers in other states. The state you are located loves it since they are collecting tax that they are not entitled to.
I think if you’re part of the Nexus system (e.g. have a presence in California) then you have to collect tax for 11 states - or however many are in Nexus. -Andrea
I thought Amazon was doing this. It shows sales tax on all the items when I list by every seller.
This is so wrong on many levels.
Again, collection does not filing. They can collect and pay the seller. Now if the seller does not file, they can be charged with fraud provisions as well as non filing penalties etc.