Seller Fee Taxability on Amazon.com


#150

Thanks I’ll look in to it.


#151

It could also mean that our price has to increase in order to cover those taxes if in case we have no choice. The price of my items I try to keep it low for everyone to afford. Maybe we have no choice…


#152

Good point…surely sales tax only applies to retail sales afaik… Not sure how much of a retail sale the referral fee is…?


#153

No the $62k is for the 2018 products, its actually down $20-25K. A lot of that were drop ships. Tbh, this could be my last year of selling online (15+ years).

My sales plummeted across the board. Amazon was always double digit pending orders, those are a single number now, conversion rate was always double digits, now 4.5% and monthly $$ gross was 5 figures now 4 figures and falling, 30 day units sold down more than 50% now.


#154

Last year, billionaire Jeff Bezos claimed a salary of $81,840 – and he paid less than $8,000 into Social Security. This isn’t even close to a full individual contribution. HE paid less in taxes than a teacher on full salary of 35,000.


#155

You do know that there’s a difference between the self employment rate and the employee rate, right? the ~15.6% is for self employed people. If you are issued a w-2 then the employer is responsible for half of that amount.

When people speak about him being the “richest man in the world” they are referring to his stock options and holdings. Until he “cashes out” those stocks, they aren’t considered income.


#156

No because my sales and use tax is deductible :slight_smile: lol


#157

As it will be in this case . . .

bunga bunga!


#158

Yes, it is interesting that all of the fees will be deductible. The federal government will now actually now receive less income tax because of these fees.


#159

That is not how profitable businesses work. They plan for all associated fees prior to engaging in the business. That way they can make the desired profit. :train2:


#160

Yes, just saying that the “irony” here is that by adding a sales tax at the state level, it results in less income tax at the federal level (and income tax at the state level for that matter), because these additional sales taxes will be deductible.

Not sure if that sort of thing is enough to help prompt that federal government to legislate, but it can’t hurt.


#161

State sales tax would have no effect on the federal level or your business, because it is money paid by the customer, IN ADDITION to the product cost. Sales tax is just a pass thorough for retail businesses. :train2:


#162

Sorry, I was referring to this new sales tax that we (Amazon sellers) will be paying starting June 1, not customer paid sales tax.

Let’s say I pay a total of $5000 for the year of sales tax on these “taxable electronic services” (referral fee, subscription fee, etc…) That sales tax is now a deduction for my business and that deduction results in less money the federal government will receive. That was my point.


#163

Yes, you are correct. That is because sellers would be buying a taxable service that Amazon is offering for sale to it’s FBA sellers in those states. With the sophistication of Amazon accounting it will be easy for them to do. The only way around it would be not to purchase (or offer) any of the services, adjust your costs accordingly, or leave FBA altogether. :train2:


#164

Wouldn’t it be the same either way?

Either you pay 50k plus say 5k for these “taxable electronic services”, so total of 55k and you get to make a deduction of 55k.

Or you pay 50k plus zero tax for the “taxable electronic services”, so total of 50k and you have a deduction of 50k.

The amount paid minus the deduction is the same in the end.


#165

Has the tax been applied to product price and shipping fee already? Why is WA having more than 10 percent tax on overall price included shipping now?


#166

I was wondering about the shipping portion. The customer currently already pays sales tax on the shipping charge, so not sure why sellers are paying sales tax on top of that. I know they are saying it’s for the “service” of shipping, but it seems to me the shipping sales tax already being paid by the customer should include things like taping, bubble wrap, etc…


#167

I’m not sure how you’re calculating that though. If it’s 10% of 15%, that’s 1.5% extra of your total sale.


#168

We sell fast-selling high value electronics and our margin is very low (5-6%). For example, if you sell 1M products, our profit is 60k, and we have to pay 100k or moe see to Amazon. If all sees are subject to 10% tax, means that we have to pay 110 k fee, that being said, our profit decreased from 60k to 50k, 16% lost.


#169

how exactly will anyone make money now that fees are taxed, and we also have “high pricing error” making our inventory inactive. with the fees and that error we can no longer double any money.