State of MA Demand Letter to Amazon for FBA seller info?


#1

Just got this note from Amazon…


Amazon has received a valid and binding legal demand from the Massachusetts Department of Revenue (DOR) requiring that Amazon disclose the following information about sellers to the DOR:

Contact information (name, address, federal tax ID number, and phone number)
Estimated value of the seller’s inventory in our Massachusetts fulfillment centers, calculated based on the seller’s selling prices in late 2016 and in 2017

To comply with our obligations under the law, we plan to provide your information to the DOR by January 26, 2018. Because each seller’s business and tax needs are unique, we encourage you to consult with a tax advisor to answer any questions you may have.


Wow right?

No notice from Amazon until today.

They plan on releasing info on 1/26…four days from now.

This info contains sensitive information such as tax IDs…which in many sellers’ cases can just be their SSN.

What does all this really mean?

This is crazy!!

Edited by: SummitCore Technologies on Jan 22, 2018 2:23 PM


Oh thank you Amazon for giving out my personal info
#2

Well…we do not do much with FBA…time to quit it altogether it seems…


#3

I agree with Lake, but be prepared for MA to go after you for back taxes on your sales. They have nothing to lose and everything to gain.


#4

Forgive me for being naive, what is the report that indicates which state (or fulfillment center) an fba order shipped from?


#5

I have been warning people that FBA will be considered a “nexus” in states. I kept being told I have no idea what I am talking about.

MA just sent the first shot across the bow. Be prepared, other states are sure to follow.


#6

Ok just to be clear what Massachusetts wants to do is charge inventory tax on everything stored in Amazon warehouses in their state. Amazon can and should stop this very easily. If they do nothing then in a year or two every state that has such taxes will try and do it. All Aamzon has to do is tell Massachusetts that it will comply but they will also close every warehouse in the state. I know that would get my states attention since thousands would lose their jobs. Now that the internet tax dam has been cracked by Washington State you can expect to see every state trying to tax internet sales any way they can if the feds don’t get off their duffs and start regulating internet commerce.
If Amazon does nothing and Massachusetts succeeds here it will be the end of FBA.


#7

The subject of whether an Amazon fulfillment center constitutes a nexus in a state has been argued on these forums for years.

If you do not register, you can expect you will get to argue about how to interpret Quill when you are contacted by the Mass DOR.

This is going to cost you money one way or another. And it could cost you any merchandise stored in a MA FC.

Make a practical business decision.

Or you can wait for the posts here from people who have no stake in your business and will encouriage you to fight for what they think is right.

Edited by: Lake on Jan 22, 2018 2:29 PM


#8

That is a business decision.


#9

yeah but…

Who really keeps anything of value in stock in Taxachusetts…


#10

Makes me very happy we are not FBA.


#11

The only point your missing is that Amazon is behind this.

When they capitulated, and started paying tax for their own inventory, stored in their own warehouses, in every state-- they began formulating strategies to make 3P sellers pay tax too.

Although Amazon should pay tax on their own warehoused inventory sales, as a matter of law, we find it deceptively ingratiating for them to offer no resistance, going so far as even to assist, illegal power grabs by individual states.

In the meantime, as Amazon collects and we assume, pays, illegally collected money from customers in these states, we would expect that when found illegal in the SCOTUS, that Amazon would be required to pay back all 3P sellers those amounts collected.

3P sellers would then, of course, be enable to refund all of their customers the illegally collected amounts…

(how’m I doin’ so far…?)

+don’t care what you think.+
+i like this line of reasoning.+


#12

> Ok just to be clear what Massachusetts wants to do is charge inventory tax on everything stored in Amazon warehouses in their state. Amazon can and should stop this very easily. If they do nothing then in a year or two every state that has such taxes will try and do it. All Aamzon has to do is tell Massachusetts that it will comply but they will also close every warehouse in the state. I know that would get my states attention since thousands would lose their jobs. Now that the internet tax dam has been cracked by Washington State you can expect to see every state trying to tax internet sales any way they can if the feds don’t get off their duffs and start regulating internet commerce.

You could be correct, BUT Massachusetts has estimated sales in the past based on inventory levels for sales tax collection.

And Amazon is no longer in conflict with the states on sales tax. It is making common cause with them in lobbying for changes in the law to make it easier for the states to collect sales tax.


#13

Hi SummitCore,

Was there a corresponding notification in your seller central about this email, or did the email just go to your email inbox?


#14

You have very little control over where your FBA inventory is stored.


#15

They are not after sales taxes. Many states charge taxes on your unsold inventory annually. Thats why you see so many end of the year sales in those states. It will be back inventory taxes that they are after.


#16

+scifietc wrote: They are not after sales taxes. Many states charge taxes on your unsold inventory annually. Thats why you see so many end of the year sales in those states. It will be back inventory taxes that they are after.+

Maybe but I seriously doubt it…and it is a business decision that we all have to make,


#17

Why would they need to estimate your sales in their state when Amazon can tell them to the penny what you have sold? This is about inventory taxes wait and see. What you have stored in a state has nothing to do with how much you have sold there. Anyone who understands how FBA works knows that items stored in one state are not just sold there but are shipped all over the country.


#18

OK, so it took three years:

https://sellercentral.amazon.com/forums/message.jspa?messageID=2921674#2921674

>As I believe I said above, a state government is not going to say “Oh, your agent has made this much too complicated, so fuggedaboudit, we don’t want our taxes.”
>
>What they are going to say is “Not our problem.”
>
>What they are going to say is “Amazon, give us a list of ever vendor who stored crap in your warehouse in our state”. Then they will send automated dunning letters to all of them, demanding taxes for all shipments into their state.

bunga bunga!


#19

I don’t think MA will send invoices to non-MA sellers who have stored one or more pieces of FBA inventory in a Massachusetts Amazon fulfillment center with a levy on EVERY FBM order from said seller which has it’s ship origin outside of Massachusetts.

Note my use of FBA/FBM in this scenario as it’s specific.

In other words, I don’t believe MA can say, “While 99% of your orders ship to MA from your FBM warehouse in Georgia, you have one piece of your inventory in a MA FBA warehouse, so you have full nexus in the state, and are responsible for collecting sales taxes for every (FBM and FBA) order shipped to a Massachusetts address.”


#20

You have apparently never experienced a MA sales tax audit.

They often estimate based on numbers other than sales data.

Once you have a nexus, all of your sales on any venue which ship to Mass are taxable.

They decide on a number and it becomes your job to disprove it. In the process they get more data on your business than Amazon has.

I have been there. My business shipped 90% of our revenue to either customers who remitted directly to the state, were tax exempt,or were outside the state. That did not correlate with their estimate.