Seller Fee Taxability on Amazon.com


#1

Hello,

Please sign the petition about the email that all of us received today:

Dear Seller,

We are reaching out regarding the possible tax implications on some seller fees beginning June 1, 2019.

Some states consider specific Selling on Amazon fees such as per item, order, and refund fees as a taxable electronic service. Similarly, some states consider FBA inventory prep fees such as bubble wrap, polybag, taping and labels as taxable. Seller fees is not increasing however; you might see tax applied to some seller fees.

For more information regarding this change, refer to the FAQ below:

  • What fees are taxable?

Selling on Amazon fees (based on your business location):
• Referral Fee
• Subscription Fee
• Variable Closing Fee
• Per-item Fee
• Promotion & Merchandising Fee
• Refund commission Fee
• Checkout by Amazon
• Sales Tax Collection Fee

FBA service fees (based on order fulfillment center):
• Labeling Fee
• Polybagging Fee
• Bubble wrap Fee
• Taping Fee
• Opaque Bagging Fee
• Repackaging Fee

The above list is some common seller fees. For a complete list of seller fees, refer to the following Help pages:
Selling on Amazon Fee Schedule: https://sellercentral.amazon.com/gp/help/200336920
FBA features, services, and fees: https://sellercentral.amazon.com/gp/help/G201074400

  • How will tax be calculated on my seller fees?
    For Fulfillment services, the fulfillment center performing the taxable service will determine the tax rate.
    For Selling on Amazon fees, the location of your business in a taxable state will determine the tax rate calculated.

  • When does this begin and where can I see any tax collected on my seller fees?
    Beginning June 1, 2019, Amazon will start collecting sales tax on taxable seller fees. Tax collected will reflect with the order fee on the transaction details of your Payments Reports. Date range payment reports will continue to reflect the sum of fees per order.

  • Can I opt out of using FBA fulfillment services that may be taxable?
    FBA services are performed on your items when you elect to purchase these services from Amazon or when the packaging and prep requirements are not met. To manage your FBA settings and minimize FBA service fees by prepping your items before sending to an Amazon fulfillment center, visit Fulfillment by Amazon settings at https://sellercentral.amazon.com/gp/ssof/configuration/index.html/ref=xx_fbasettings_dnav_xx.
    To learn more about packaging and prep requirements, refer to the Help page available at https://sellercentral.amazon.com/gp/help/200141500.

For more information on Amazon fees, please visit the Selling on Amazon Fee Schedule at https://sellercentral.amazon.com/gp/help/200336920.

Regards,

Amazon Seller Services

Moderator Edit (Jake@SellerSupport): External URL Removed


Seller Fee Taxability on Amazon.com
Sales Tax being charged on Amazon Services
#2

It says: “Some states consider specific Selling on Amazon fees such as per item, order, and refund fees as a taxable electronic service.”. Does anybody know which states are taxable, which are not? The Referral Fee is a lot of money, it means our profit will be cut to 15% or more if we have to pay 10% tax on referral fee.


#3

How much is the Leave Amazon Fee?
Fee the sellers to death.


#4

I don’t get it!! so WE are being CHARGED seller fees and all sorts of arbitrary fees for everything we sell…that comes out of the profit, etc. from what WE sell…and we are taxed on the sell of the item already…including the fees because they 1099 us for every dime that we make regardless of what is taken out…

SO NOW…they are adding TAXES to SELLERS for the FEES that Amazon Receives from Sellers???

That doesn’t make sense and it ISNT right! That is more than double taxation. Shouldn’t Amazon be charged the taxes and not us? we don’t receive the money from the fees…

ridiculous…or am I missing something…


#5

It appears that this legislation is nothing new, so I’d be interested in knowing what Amazon’s position in relation to this issue has been up to this point. I’m speculating that the states’ right to collect this tax stands on shaky legal ground (due, in part, to the question where the services were rendered) and that up until this point the states have chosen not to press the issue due either to their tenuous legal position or to some kind of deal with Amazon.

The timing is interesting in relation to California’s 180-degree change of position this week regarding the liability for sales taxes. Has there been some kind of agreement between Amazon and one or more of the states contemplating or pursuing “marketplace facilitator” sales tax legislation that has caused this new interpretation of longstanding legislation concerning the the taxability of services to suddenly go unchallenged by Amazon? Has Amazon done some horse trading with the states in which it has agreed to shoulder the burden of collecting and remitting sales taxes in exchange for its cooperation in taxing third-party sellers for the services they utilize?


#6

Well… just another thing to calculate and pass on to the customers…


#7

Not sure what states are doing this, but I am quite sure this will not affect California as California law restricts the application of sales tax to transfers or consumption of tangible personal property or physical property. California does not tax services…


#8

If you’re a us seller… another advantage to foreign sellers…


#9

You may want to look a little closer to California laws before you conclude it doesn’t affect you… Also, I know this is applicable in Washington State too.


#10

Seller fees is not increasing however; you might see tax applied to some seller fees.

^ Yikes. I’m not sure if I’m concerned more about the subject-verb disagreement or about the misplaced semicolon (and subsequent lack of comma).

Let’s try this:

Seller fees are not increasing; however, you might see tax applied to some seller fees.


#11

so glad I wasn’t the only one who cringed at that.


#12

The taxes mentioned are SALES TAX; Amazon is already liable for income tax on the fees (whether or not they actually pay anything is another story…)
It’s no different (from the states’ view) than you collecting sales tax on the widget you sell, and still paying income tax on your profit.

Still, it seems absurd. Hopefully it’s not very many states actually doing this…


#13

Note that one of the things mentioned in the e-mail was “Bubblewrap”. This is a tangible item, so might be taxable. Of course, since Amazon rarely puts enough packing material in a package, it shouldn’t be very much. :wink:


#14

that may only get you out of part of the tax. Packing fees are based on supplied not just service. Either way It sounded like Amazon is going to tax across the board. I do not blame Amazon. I blame corrupt heads of state who have run their bank account EMPTY with silly spending and even fraud in some cases. Now they are running to collect money from the only people who have money, the large smart companies like Amazon, Apple etc. They vilify them when in fact they should take a lesson from them on how to manage operations on all levels. This is only the start.


#15

There was a thread about this in the early hours when this e-mail was sent out.
Not sure why it was deleted. Seems to be a lot of that going around.

I’ll repeat what I said in response to one person in regards to what damage it yet to come.
The damages will be extensive, excruciating, and flat-out overreaching.


#16

this kind of tax has been charged by the amazon.ca FBA orders for some times now… not surprised that it is rolling out in .com


#17

Have they released a list of states yet that the seller fees tax will be assessed in?


#18

Why didn’t Amazon post which states are implementing a sales tax on these fees? No doubt, New Jersey will because that’s what NJ does best. As with any new cost increase, I will calculate NJ sales tax on all affected fees, and raise my prices accordingly across the board. Who can afford to play the race to the bottom anymore? :roll_eyes:


#19

As if I needed ANOTHER reason to move my business off Amazon… I seller full-fill everything, if they start charging me taxes on commission I pay them then I’m ramping up my exit plan. That’s essentially them passing on their income tax to us. I pay enough in fees and Amazon has some of the worst buyers I’ve ever encountered, the “value” of selling on Amazon has been greatly diminishing over the last year for me. I’ve had more scam customers and bogus return requests in the last six months than ever.


#20

Does this apply to FBA or is this FBM as well? I live in a state without income tax so I am wondering how this will affect me.