Tax Nexus


#1

As I get started with FBA, we are obviously shipping goods to Amazon that I own until they are sold. Typically you have to file taxes in the state you own inventory.

Can I direct my goods to a specific DC where I am already filing taxes?


#2

NO.

Amazon chooses where they want the inventory. That is one of the key reasons why the inventory nexus is disputed. Typically, you will have a physical presence in locations where you have an agreement to rent space in a warehouse. That is different for Amazon where they manage the inventory locations as a service in the interest in optimising their reach to customers and their costs. Since you do not have anything that you control related to the locations and have no specific agreement and allocation for any location and no ability to prioritise or avoid any locations, this is something that many agree is not a taxable nexus.

That will never be fully decided without more extensive legal action.

Dave


#3

The most important part mentioned is that inventory shifting is all about minimizing Amazon’s shipping cost.


#4

For a unrelated reason to the tax issue we investigated where our stock was in the Amazon Fulfillment Centers. We found that we had items in 99 different warehouses throughout the country in most of the states of the union.

We typically send our regular size items to two locations, our oversize items to three locations. That is not where they end up.


#5

No. Nothing has changed. You are only required to collect and remit Sales Tax in states where YOU maintain a physical presence.

Amazon’s FBA warehouse locations are irrelevant.

Not unless you are enrolled in the Preferred Placement Service. It’s a pilot program, and is by invitation only.

Funky


#6

Note that this is just one persons lay opinion which does not match the reality of what the states are enforcing with the mechanisms that they have available. Anyone concerned about the potential exposure they may have should consult a CPA/tax attorney who specializes in ecommerce to understand the risks of registering vs not…


#7

Just run your business normally.

Amazon is going to end up collecting sales tax in all the states that have it.

The only rules you should follow are the ones for physical Nexus.

Where you send them is irrelevant.


#8

I repeat:

No. Nothing has changed. You are only required to collect and remit Sales Tax in states where YOU maintain a physical presence.

Amazon’s FBA warehouse locations are irrelevant.

Funky


#9

The professionals have no idea what to do as there is no law to follow and Wayfair v SD is inconsistent with the Constitution.

In CA, third party sellers do not have enough control to collect sales tax.


#10

I repeat:

Note that this is just one persons lay opinion which does not match the reality of what the states are enforcing with the mechanisms that they have available. Anyone concerned about the potential exposure they may have should consult a CPA/tax attorney who specializes in ecommerce to understand the risks of registering vs not…


#11

Note that this is just one persons lay opinion which does not match the reality of what the states are enforcing with the mechanisms that they have available. Anyone concerned about the potential exposure they may have should consult a CPA/tax attorney who specializes in ecommerce to understand the risks of registering vs not…

This is bad advice. I did consult someone who knows what they are doing and there is no way third party sellers can collect the tax based on the rules in CA.

Amazon is the retailer and they will not be able to skirt this anymore.

The fastest solution to the problem is the marketplace collects and pays.

That is what will happen


Does FBA Export trigger sales tax nexus?
Fba and marketplace facilitator
Got the big letter from California today....... bum bum bum
#12

Just to clarify. you are saying it’s bad advice to do what you did?


#13

> Note that this is just one persons lay opinion which does not match the reality of what the states are enforcing with the mechanisms that they have available. Anyone concerned about the potential exposure they may have should consult a CPA/tax attorney who specializes in ecommerce to understand the risks of registering vs not…

The above is bad advice. I did consult someone who knows what they are doing and there is no way third party sellers can collect the tax based on the rules in CA.

Amazon is the retailer and they will not be able to skirt this anymore. Amazon has to be the one to collect sales tax.


#14

Just to clarify. you are saying it’s bad advice to do what you did?


#15

My advice is to not register in CA over FBA merchandise being there. I checked it with someone who deals with this stuff for a living and knows what he is doing.

No seller has the requisite power or control to comply to their laws. Only Amazon can. Amazon has to collect and pay sales tax.

I am not sure why you are asking what you are.


#16

@QueenBee You may not agree with Funky, but there are no states enforcing. I have read thru many of their new laws and have found that they do not meet the 3 requirements outlined by SCOTUS. Many are just throwing words and I and others laugh. It would be easy to at least comply with the latest ruling, sadly even state governments seem to have a problem with that.

My company is going to continue to look at the states where we meet their # of sales or $$ and then read to see if the meet the 3 requirements.

For those worried about CA, we did not receive the letter (yet) and we would just laugh, and laugh. Maybe even post it on the wall for future laughs.


#17

And just to remind you my advice that you said was “bad” was:

Anyone concerned about the potential exposure they may have should consult a CPA/tax attorney who specializes in ecommerce to understand the risks of registering vs not…

I’m asking because you said my advice was “bad” but it’s exactly what you did.


#18

Then you did the right thing by not registering.

However I stated something else was bad advice.

There are not specialists in e-commerce sales tax as there is no law allowing it. All there is is a ruling by the US Supreme Court. There is a lot of conjecture.

States have no mechanism to enforce anything.

The only exposure to an Amazon third party seller is some judge ignores decades of precedent, ignores the Commerce Clause, and does some serious judicial activism. Would I put it past courts today? No.

Accounting professionals are going to say register because they are risk adverse.


#19

The irony here is you’re describing the 9th District to a tee! If it’ll happen somewhere, it’ll happen in California first.


closed #20

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