Need help understanding how to start the process for Sales Tax


#8

> This is not yet a law
Does California (and 12 other states) share your opinion?










Staci19


#9

+"Just call the state where the warehouse is in and ask this"+

Call who ?? Dept of Revenue - Treasury Dept …


#10

It seems many FBA sellers still think they are only liable to collect sales tax in the state in which they reside and are waiting for the pending federal law to pass (which is unrelated to state nexus laws in effect now).

If an FBA seller utilizes Amazon warehouse, in general, the FBA seller has nexus. But you do not have to follow any post in this forum. Just call the state where the warehouse is in and ask this:

“if I have no employees and no office in your state, but I hire a third party warehouse in your state, do I have nexus according to your state law?” Please be sure to call back a few times to talk with a few different reps in the same state to correlate their unofficial answer.


#11

Really Elsie, you do not have to worry about this. Just do what you have to do in your own state…Unless you have an office and employees in any other state, you only need to worry about the one you’re in.

NO LAW YET has been passed to say otherwise.

And you can easily re-search most of this online.


#12

Really Elsie, you do not have to worry about this. Just do what you have to do in your own state…Unless you have an office and employees in any other state, you only need to worry about the one you’re in.

NO LAW YET has been passed to say otherwise. And even if it IS passed, you would need to do One Million of Dollars worth of sales.

And you can easily re-search most of this online.

This whole thing is still a highly debated thing in politics. And so far, no law has been passed saying YOU, a Small Seller, needs to collect and remit sales tax in any other state other than you do your business in.

Those other pple doing that, are doing it because they want to, or they have been threatens and don’t know any better, not because they HAVE to. They just have no understanding of how things are w/taxes right now.

But so far, no law has been passed, so just do what you need to do for your state, county etc.


#13

If you are FBA seller and hire Amazon warehouses in various states, most states require you to register, collect and file sales tax. Most states sales tax nexus laws include the hiring of third party warehouses. These are state laws in most states, not federal law. Each state law is different so I am speaking in general.

But you do not need to believe anyone in this forum. You need to verify it for yourself.

  1. First find a list of all amazon warehouses. It is somewhere in this forum or on the web.

  2. To find the state number to call, in google.com, search like this:
    ca sales tax phone number
    tx sales tax phone number
    wa sales tax phone number
    etc for the state you want.

Call each state where the warehouse is located. Ask this and more:
“If I have no employee, no office, but I hire a third party warehouse in your state. Do I need to collect sales tax if I sell online and ship goods into your state?”

Hang up and call back. Ask another rep. Repeat until you are satisfied that the answer is reliable, which may likely be the same determination that the state auditor will give you if selected for an audit.

We provide sales tax registration and sales tax filing services. We are registering and filing for various Fullfilled-By-Amazon sellers with a certain sales volume who do not want to pay tax out of their pocket if audited. Although it may be a requirement to register and file tax, some small sellers may decide to defer until they are no longer comfortable with the audit risks.

Verify it for yourself and post your answers here for everyone.


#14

I agree with the previous poster - you need to verify what your obligations are yourself. That is about the only thing we agree on. He is never going to convince me to his way of thinking until there is a clear-cut law or court opinion to back it up. (right now there is neither)

Do not believe what anyone here tells you. The truth is… despite what some people tell you… no one knows.

It has never been tested in court. There is no federal law that says nexus is created by having items in an FBA warehouse. There is never been a federal court opinion that creates nexus by participating in FBA. There has never been any federal decision that has verified the right of states to have their own definition of nexus. (seems to fly in the face of the Quill decision summary and the commerce clause of the US constution IMHO)
Some people are convinced it creates nexus, some aren’t so sure. Amazon says you +may+ be liable. I can not empahsize the word “may” enough.


#15

Actually, the states in which Amazon already has warehouse ALL say that inventory in those warehouses counts as nexus NOW.

The pending legislation does not have anything to do with Amazon warehouses. The legislation, as it stands now, pertains to remote sales, which are sales in which you DON’T have nexus.

We’ve actually gone out and done the research for Amazon sellers in all of the states and started publishing them on our blog - including the exact documentation from the states saying that warehouses count as nexus.

Hope this helps!

Edited by: Seller Forums Admin on Aug 14, 2013 6:12 PM


#16

Nexus taxes have been around for a while; they are not new nor are they subject to or pending the new sales tax law for each State. If you have your merchandise in another state you have an obligation to other states. Like I said, this is not new.


#17

Elsie, best sound practice is to consult a professional and file your taxes through a professional agency. None of us here are certified and even if we were we won’t be the ones filing or responsible for your taxes.


#18

What if the inventory is only in the warehouse for 5 days out of the year? Does it count then? What about 1 day? What if Amazon moves the inventory on their own to a new warehouse, but only temporarily? The states don’t have a d*mn clue…


#19

They can say anything they like, doesn’t make it so.


#20

Texas Angel -

The questions was about what the states say their laws are around nexus. I’m reporting what I’ve been told.

The decision to adhere, or not believe, what is law is obviously up to each seller.


#21

My point is that just because a state says, “this is what we call nexus”, doesn’t mean that they are correct.

If they could do that, they would have done it 20 years ago.

The SCOTUS ruled that a business must have a substantial presence to have a nexus. What that means has never been tested in court AFAIK.

Which means that until states start taking FBA sellers to court, your guess is as good as mine. I assure you that I can find two lawyers who will be happy to write opinions taking each side, but that doesn’t mean much either, since lawyers turn out to be wrong all the time. :slight_smile:

I didn’t say the states were wrong, I just said they can say anything they like, doesn’t mean they have the final say.

Either the courts will deal with it in due time, or Congress will pass a national law dealing with the issue and moving us all beyond this issue.


#22

Well said.

FBA inventory is +transitory+. It gets sold. It gets moved. It goes here. It goes there.

So what happens if you have one item stored in a warehouse in CA for 7 days, then Amazon moves it to AZ (or it sells). Now you have nothing, nada, zilch in CA after day 7.

The question of “nexus” is not simple:

  1. Do you have a “nexus” in CA for 7 days, and then you don’t on the 8th day?

  2. If you DO have a nexus on the 8th day, why? I thought the criteria was that you needed inventory in the state in order to have a nexus. You don’t have inventory stored in that state on the 8th day, so why would you have a nexus there at that time?

  3. If you never have any inventory in CA ever again after the 8th day, are you required to collect CA sales tax forever? If no, at what point do you stop collecting CA sales tax, considering that Amazon could move something back into CA at any time?

  4. If you DO have a nexus during the 7 days, but not on the 8th day, do you collect CA sales tax for 7 days, and then stop collecting on the 8th day? And then 1 month later, if Amazon moves one of your items to CA, do you start collecting again? And then when it sells and you have nothing left, do you stop collecting? Does CA (or any state) have a process where you can “stop” and “start” nexus status? I doubt it.

These are questions which the courts will need to sort out.
Or maybe someday Congress will finally fix this mess. But I wouldn’t want to sit on a hot stove until that happens :slight_smile:

Edited by: davido84 on Aug 15, 2013 3:48 PM


#23

> So what happens if you have one item stored in a warehouse in CA for 7 days, then Amazon moves it to AZ (or it sells).
Nexus is defined by where you do business. While you have even 1 item in a CA warehouse, you have a CA nexus. So if an item in the PA warehouse ships to your CA customer, you need to give sales tax money to CA. If you don’t have any items in a CA warehouse (only in PA, for example) and sell something to a CA customer, you have no sales tax liability. Regardless if you recently had stuff in CA but don’t right at that exact moment.

It’s simple - right? Better do a daily download of your warehouse inventory reports.

Another issue not yet recognized: If you do pay CA sales tax, does that also mean you must pay CA income tax??

Our bet is that CA will try to force the income tax issue once they realize the waiting gold mine.












Staci19


#24

> While you have even 1 item in a CA warehouse, you have a CA nexus.

Yes, but that wasn’t my point.

My question was, when the 1 item sells (or is moved), you now have +nothing+ in CA. Do you still have a nexus in CA? If yes, why? You have no inventory there. If you didn’t have a nexus +before+ you had inventory in CA, then logically you should not have a nexus +after+ your inventory leaves CA. In both cases you had (have) no inventory in CA.

Unless you want to say that if you had inventory in CA at +any+ time, then you are obligated to collect CA sales tax +forever+, even if you never again have inventory in CA (say you switch from FBA to e-bay and no longer store your inventory out of state).

I don’t think this argument would go very far in court. In 1975 when I was 10, I lived in Colorado, but I haven’t lived there in 30 years. Does this mean that since I once lived there in 1975, the state of CO can collect state income tax from me forever? I sure hope not :slight_smile:


#25

I think Staci19 was being funny, or sarcastic, or just poking fun…

I highly doubt a single item stored in a third party’s warehouse for 7 days would count as “substantial nexus” which is what the SCOTUS said.

A better argument could be made for 50,000 items stored in the same warehouse all year.

As has been pointed out, this is not a black/white issue, it is a huge mess which is why Amazon wants no part of it, they just say, “consult your tax advisor”.

Yea, like that helps, they have no idea either. :slight_smile:

Really, only Congress can solve this mess…


#26

We think Texas A-- was being obdurate, or just poking fun… She threatens to hold her breath 'till she turns purple if she doesn’t gets her totally foolish way. Geez, talk about spoiled.
>My question was, when the 1 item sells (or is moved), you now have nothing in CA. Do you still have a nexus in CA?
As explained above - No.
> logically you should not have a nexus after your inventory leaves CA.
Exactly. See above.
> if you had inventory in CA at any time, then you are obligated to collect CA sales tax forever
No, Nexus extinguishes when you leave.
> I lived in Colorado, but I haven’t lived there in 30 years. Does this mean that since I once lived there in 1975, the state of CO can collect state income tax from me forever?
Of course not. Read with comprehension what we posted.

At the moment of sale, nexus gets established. That was the gist of the historical Supreme Court decision.










Staci19


#27

>> My question was, when the 1 item sells (or is moved), you now have nothing in CA. Do you still have a nexus in CA?
>> As explained above - No.

>> No, Nexus extinguishes when you leave.

Okay good, we agree that at any point in time +T+, if I have no inventory stored at time +T+, then I have no nexus at time +T+. Furthermore, if it is true that I have no nexus at time +T+, then by implication I am not required to collect and remit sales tax at time +T+.

But how, exactly, do I suspend the nexus when my inventory leaves? Is there a button at ca.gov, “Suspend my nexus!”. I must have missed it. Do I just stop filing CA sales tax returns? Yeah, I’m sure the CA Dept. of Revenue would be just fine with that. I’ll just explain to them that I’m FBA, and have an intermittent nexus status based on the whim of Amazon, e.g., which way the wind is blowing that day. Surely they’ll understand the finer nuances of FBA selling.

Now, returning to the real world: If I +can’t+ suspend the nexus, then how long, exactly, am I required to collect CA sales tax as if I +did+ have a nexus, even though I don’t? Forever? 1 year, 2 years, 10 years? If my inventory is in CA for just one day, do I collect CA sales tax only for sales made on that one day?

Regardless of enforcement, the law deals in specifics, not in vague generalities. Speed limit signs do not read “About 65 mph, more or less”. Vague generalities in the law are resolved by courts.

If Amazon moves my inventory out of CA, they may never again move it back. Or maybe they will tomorrow. Or next year. It’s not like Amazon keeps us in the loop about these types of plans.

You seem to be claiming that this is all so simple. What I’m trying to point out is that it is +not+ all that simple, by asking a question that does not have a simple answer. A question that is going to have to be resolved by either Congress or the courts.

Edited by: davido84 on Aug 16, 2013 7:54 AM