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This article applies to selling in: United States

Tax calculation services

Amazon’s Tax Calculation Service is available to Professional Sellers who have an obligation to calculate Taxes (commonly acknowledged as “sales and use tax” among taxing authorities and collectively referred to as “Taxes” here) on their orders destined to non-Marketplace Tax Collection jurisdictions in the United States (US).

For orders destined to Marketplace Tax Collection jurisdictions, Amazon will be the tax responsible party to calculate, collect, remit, and refund Taxes calculated. See our FAQ to learn more about Marketplace Tax Collection.

For orders destined to US jurisdictions you have an obligation to calculate Taxes, you may enable our service by providing your tax registration number(s), classifying taxability for each of your products using our product tax codes, and choose to accept buyer exemptions through Amazon’s Tax Exemption Program.

  • Our service uses buyer provided information such as an order destination city, state, and zip code, order origin information, and order acceptance location to determine the tax rate calculated for an order.
  • Our service will calculate Taxes that are labeled as excise or gross receipt tax (for example, in New Mexico and Hawaii) that are commonly acknowledged to be sales and use taxes.
  • Our service will not calculate federal, state, or local regulatory fees (bottle, e-waste, recycling), product-based excise, or similar gross receipt taxes (special fur clothing tax in Minnesota) or Taxes on cross border sales (non-US origin to US destination).

Additional information about how Amazon calculates Taxes on your orders is available in our Tax Methodology document.

Note: Amazon’s tax calculation service and reporting is available to sellers subscribed to the professional selling plan only. It is important to download your tax reporting documents frequently and maintain your records in a safe place. See Downgrade or upgrade and tax calculation service for more information.

Our tax calculation services includes automatic updates and certain seller options to calculate Taxes in non-Marketplace Tax Collection jurisdictions:

  • Sales and use tax rates are automatically updated by our tax rate provider, Vertex
  • Sales and use tax rates are calculated by each jurisdiction type (state, county, city, district rates)
  • Sales and use tax calculations are made for each item (each product sold will calculate individually)
  • Seller option to assign taxability codes (product tax code) to one and/or many products
    • Our service offers product tax code categories such as clothing, books, food, computers, etc. for sellers to use when assigning taxability to their products
    • Seller option to calculate local county, city, and district jurisdiction taxes
  • Seller option to calculate Taxes on shipping and handling and gift wrap
  • Seller option to assign an optional custom tax rate to non-Marketplace Tax Collection states
    • Using this option will override your product tax code assignment and the jurisdiction tax from our tax rate provider with your custom tax rate
    • A custom tax rate will calculate your custom at the state jurisdiction level
    • To use this option, you must only assign a rate that accurately reflects the jurisdictions actual rate
  • Seller option to participate in the Amazon Tax-Exemption Program (ATEP)

As detailed in our Tax Policies, all Taxes calculated on orders destined to a non-Marketplace Tax Collection state are paid to you with your normal earnings disbursement for you to remit to individual taxing authorities. Tax calculation details such as the tax rate and taxed jurisdiction information calculated on your orders are reflected in your Sales Tax Report. See Sales tax information in seller reports for complete details.

The ability to refund Taxes on an order are supported via the Manage Orders page for sellers who fulfill their own orders. Amazon Customer Service will manage orders fulfilled using Fulfillment by Amazon (FBA), however specific questions about your tax settings will always be the sellers’ responsibility to respond to.

If your business has an obligation to make any information about your tax obligation publically available, you may update your seller profile accordingly by navigating to Settings > Your Info & Policies > Tax (tab).

It is important to understand your obligation to calculate tax and responsibilities to manage calculations made before setting up your tax settings. Seller responsibilities related to using Amazon’s Tax Calculation Service are available in the Tax Calculation Services Terms.

See also

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