Tax collection for orders shipped to Ohio state - Effective September 1, 2019


#1

Based on changes to Ohio state tax law, Amazon will begin calculating, collecting, and remitting sales and use tax for all orders shipped to customers in Ohio on September 1, 2019.

Your existing tax calculation settings, order details, and payments reporting will update automatically to reflect Amazon’s responsibility. Changes to your tax settings or seller account are not required based on the existing bill. If there are any significant changes, we will follow up with additional messaging. You may consider working with your tax advisor to determine if your business has any other ongoing tax remittance or reporting obligations upon enactment of Ohio House Bill 166.

Answers to many common questions are available in the Marketplace Tax Collection FAQ.

More information is also available on the Ohio legislature's website.


#2

Oh cool let me just check out this bill really quick.

2602 pages

Yeah, never mind.


#3

If a business is 100% Amazon sales, will we still have to go to the Ohio Business Gateway each month and file a sales tax report?


#4

Same question here. Planning on contacting our CPA for help on this one.

Some states added a new field on their returns and portals for marketplace sales so they can keep tabs on taxable sales but know that you aren’t remitting it.


#5

ok!


#6

Does anyone else hope and/or wish that Amazon would just take the initiative to handle this for all Sellers and All States. I mean they have the resources, technology and man power to make it hassle free. Right?


#7

Amazon was careful not to say taxes in THE Ohio state.


#8

According to a Cleveland, Ohio, newspaper: “We are only allowed to collect sales tax on behalf of sellers in states that allow us to do so by having marketplace laws in place,” Amazon spokeswoman Jodi Seth said via email.

So that is probably Amazon’s position that would address the many forum posts that ask why Amazon has not proactively started doing this in all states.


#9

I am trying to figure this out also. I sell on Amazon and I sell on my own website. I am guessing that I continue to collect and pay the sales tax for my own website Ohio sales and let Amazon report all of the Ohio sales on their platform and I won’t report those since they are taking the money.


#10

This tax charge buyer or seller?


#11

Marketplace Tax Collection has been with us since January 2018 with Washington being the first state to require it from marketplaces for their own sales and those of marketplace sellers (third-party sellers/merchants). On September 1, 2019, Ohio will become the 24th jurisdiction (includes Washington DC) to require this of Amazon, eBay, Walmart, Etsy, and other qualifying marketplaces. As shown below, there are currently 39 jurisdictions (38 states) with such laws in place, with 15 of those still be to implemented.

What our customers see is always the same, all non-exempt products (and most services) for shipping to a destination are taxed as required by those destination jurisdictions, right down to the local levels, which can be several hundred in some states (key examples include California, Texas, Colorado, Utah) and over 10,000 across USA. To the customers buying our products via marketplaces, all products are taxed equally no matter which seller is selected.

To the sellers, there are two primary models, and in all cases the marketplace charges, collects, files, and remits the sales-type taxes (has varying names).
Model One: Third-party seller does not count MTC sales and only registers in that jurisdiction if it otherwise qualifies for nexus (usually economic and/or physical nexus because of FBA and, possibly, because of Amazon’s recently added relationship with Kohl’s). Several jurisdictions specifically state that a remote seller does NOT count marketplace sales made on a collecting marketplace, and that seller should not register unless it has direct sales. New Jersey is a variant here because they want remote sellers with nexus to register and then request “non-reporting” status.
Model Two: 3P seller has to count MTC sales in determining nexus, registers when required, and includes all sales in the gross sales reported in tax filings, but then has a line to exclude those from payment (because marketplace(s) have that obligation) of sales-type taxes. Washington is a variant here, requiring “B&O” Business and Occupation Excise Tax based upon gross sales, sort of an easy method of taxing at the corporate level in part because there is no personal income tax, and there is a small business seller exemption on a sliding scale.

38 jurisdictions will have MTC in effect by 1-January-2020 (37 states plus WDC). 39 jurisdictions by July 1, 2020, counting Louisiana.

23 right now: Alabama, Arkansas, Connecticut, District of Columbia (a.k.a. “WDC”), Idaho, Indiana, Iowa, Kentucky, Minnesota, Nebraska, New Jersey, New Mexico, New York, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Vermont, Virginia, Washington, West Virginia, and Wyoming.
Add Ohio 1-September-2019 (total 24);
Add these 1-October-2019: Arizona, California, Colorado, Kansas, Maryland, Massachusetts, Nevada, North Dakota, Texas, Utah, and Wisconsin (total 35). It should be noted that Kansas sets no objective economic nexus thresholds, so this might get delayed in litigation.
Add Maine for a total of 36 on 1-November-2019.
Add these for a total of 38 on 1-January-2020: Hawai’i and Illinois.
And Louisiana on 1-Jul-2020 makes it 39 jurisdictions. Note that Louisiana is allowed to implement MTC prior to July 2020 with sufficient notice.

5 states have no form of “sales tax”: Alaska, Delaware, Montana, New Hampshire, and Oregon. That addresses “sales tax” by any name in 44 jurisdictions, 43 of those being states, by 1-July-2020.

That leaves 7 states without an MTC plan on the books: FL, GA, MI, MO, MS, NC, and TN. Missouri has a lot of activity and will probably find success soon. North Carolina passed HB 966 (budget) but Gov issued complete Veto; probably will find success soon and would be implemented quickly.

That leaves 5 states sitting on the sidelines and without a plan to stop losing millions on a daily basis (relying on the antiquated idea of use tax filed and paid by individual residents): Florida, Georgia, Michigan, Mississippi, and Tennessee. Do not be surprised if these 5 states makes their own political ineptness become your (remote sellers) problem with eventual audits.


#12

@SadiesHouse you’ll want to contact your tax dept. Some states have added a line so your report Amazon sales value but no sales tax.


#13

@MobyLyfe Amazon is only following the law. They are not doing it out of the goodness of their hearts.


#14

I think charge seller


#15

We got a response today from the State of Ohio regarding this new legislature. Hope it helps!

H.B. 166 contains new substantial nexus provisions as well as “marketplace facilitator” language. The new changes took effect August 1, 2019. Ohio statutes provide that a marketplace seller or marketplace facilitator has substantial nexus if they have at least $100,000 in sales or 200 transactions into Ohio in the current calendar year (i.e., 2019) or the previous calendar year (i.e., 2018). Note that the wording of the marketplace facilitator statute does not require them to collect the tax until September 1, 2019 at the earliest.

Effective August 1, 2019, a marketplace seller that has substantial nexus with this state is required to collect and remit tax from Ohio consumers that has not been collected and remitted by a marketplace facilitator(s). If the seller has substantial nexus, the seller would need to register with Ohio if they have their own sales outside of a marketplace facilitator or if they have substantial nexus prior to the marketplace facilitator collecting the tax.

After September 1, 2019, if all sales are exclusively made through a marketplace facilitator, there is no need for a marketplace seller to have an Ohio account to collect sales tax. If you have already registered, you must file returns for the period of the time your account is active. There is an option to cancel your account on your last return filed using the Ohio Business Gateway at LINK REMOVED.

Should you have additional questions, please reach out to one of our agents at PHONE REMOVED or respond to this email.