US Marketplace Tax Collection FAQ
Marketplace Tax Collection definitions
What is a Marketplace Facilitator (MPF)?
MPF is commonly defined as a business that contracts with third party sellers to promote the sale of physical property, digital goods, and/or services owned and supplied by a third party through an online store. Based on this definition, Amazon is a marketplace facilitator.
What is Marketplace Tax Collection (MTC)?
MTC is a common term Amazon uses for marketplace facilitator tax laws that identify the party responsible to collect and remit sales and use taxes for orders shipped to a jurisdiction (state, county, city, district) where marketplace facilitator tax laws have been enacted.
What is the difference between Marketplace Tax Collection and Tax Calculation Services?
- MTC: Amazon is responsible to calculate, collect, and remit sales and use tax, and, when appropriate, refund the sales and use tax. Amazon (as the taxpayer) will remit MTC taxes collected from the buyer directly to the tax authority, according to applicable legislation.
- TCS: Service available to professional sellers on Amazon to assist with their obligation to calculate taxes on products they ship from and to a customer within the United States. Taxes calculated using TCS are disbursed to the seller to report and remit to the appropriate tax authority.
Marketplace Tax Collection information
Which US States have Marketplace Tax Collection rules?
| Jurisdiction | Effective Date |
|---|---|
| Alabama* | January 1, 2019 |
| Alaska** | April 1, 2020 |
| Arizona | October 1, 2019 |
| Arkansas | July 1, 2019 |
| California | October 1, 2019 |
| Colorado** | October 1, 2019 |
| Connecticut | December 1, 2018 |
| District of Columbia | April 1, 2019 |
| Florida | July 1, 2021 |
| Georgia | April 1, 2020 |
| Hawaii | January 1, 2020 |
| Idaho | June 1, 2019 |
| Illinois*** | January 1, 2020 - December 31, 2020 |
| Indiana | July 1, 2019 |
| Iowa | January 1, 2019 |
| Kansas | July 1, 2021 |
| Kentucky | July 1, 2019 |
| Louisiana | July 1, 2020 |
| Maine | October 1, 2019 |
| Maryland | October 1, 2019 |
| Massachusetts | October 1, 2019 |
| Michigan | January 1, 2020 |
| Minnesota | October 1, 2018 |
| Mississippi | July 1, 2020 |
| Missouri | No MTC |
| Nebraska | April 1, 2019 |
| Nevada |
October 1, 2019 |
| New Jersey | November 1, 2018 |
| New Mexico | July 1, 2019 |
| New York* | June 1, 2019 |
| North Carolina | February 1, 2020 |
| North Dakota | October 1, 2019 |
| Ohio | September 1, 2019 |
| Oklahoma | July 1, 2018 |
| Pennsylvania | April 1, 2018 |
| Puerto Rico | July 1, 2020 |
| Rhode Island | July 1, 2019 |
| South Carolina | April 29, 2019 |
| South Dakota |
March 1, 2019 |
| Tennessee | October 1, 2020 |
| Texas | October 1, 2019 |
| Utah | October 1, 2019 |
| Vermont | June 6, 2019 |
| Virginia | July 1, 2019 |
| Washington | January 1, 2018 |
| West Virginia | July 1, 2019 |
| Wisconsin | January 1, 2020 |
| Wyoming | July 1, 2019 |
*Some MTC tax rules do not apply to certain types of product sales or services offered by a third-party seller. See your Tax Settings for your calculation options.
**Some MTC tax laws limit Amazon’s ability to calculate, collect, and remit certain taxes. See the state specific link in the table above for more information.
***MTC for Illinois state use tax only through December 31, 2020. See MTC for IL FAQ for information. From January 1, 2021, MTC includes both state and local retail occupation tax.
When will Marketplace Tax Collection for the US apply to my product/orders?
Marketplace Tax Collection (MTC) for the US will be applied to the product you sell based on each jurisdiction’s (state, county, city, district) MTC tax legislation. All sellers must agree to automatic Marketplace Tax Collection (MTC), irrespective of their location, volume or quantity of sales made by the seller, or Amazon support of TCS for non-MTC products or jurisdictions.
We encourage you to work with your tax professional or tax jurisdiction to determine any impact to your business.
How does Amazon determine if an item I sell is taxable?
When Marketplace Tax Collection (MTC) applies, Amazon uses the product category and item description you provide or select when creating a product listing to determine if your product is taxable.
Who is responsible for calculating and remitting taxes on orders shipped to non-MTC jurisdictions?
The seller is responsible for tax calculation, collection, and remittance obligations of taxes on products shipped to a customer in a non-MTC.
If you participate in Tax Calculation Service (TCS), your tax settings will apply when MTC rules do not. Please see your Tax Settings, Tax Calculation Service help page, and Tax Calculation Services Terms for additional information.
You may continue to have a reporting obligation for sales and use taxes Amazon calculates, collects, and remits on your product sales, any taxes you calculate via your participation in Tax Calculation Service, and taxes unsupported by our service.
Who is responsible for reporting, remitting, and/or filing MTC taxes collected from buyers?
You do not need to remit MTC taxes Amazon has calculated, collected, and remitted under MTC rules and identified with your order/transaction details (See “Account Reporting Information” below). Amazon will remit MTC taxes according to each tax authority legislation as the taxpayer.
Amazon is only responsible for collecting and remitting taxes that a state law requires. Amazon is not responsible for filing taxes on your behalf, including any income or gross receipts taxes that may be due on your sales into the state.
If you have double remitted sales and use tax from your Amazon orders to a state with Marketplace Tax Collection, you will need to work with your tax advisor and/or state to determine your refund options.
If my business is located outside of the US or I ship product from outside of the US, does MTC apply to my products?
Yes, products you ship from any location to a jurisdiction with active MTC rules are subject to the tax rules and legislation of the jurisdiction to which you deliver your product/order, including Marketplace Tax Collection rules.
If Amazon determines it has an obligation to calculate, collect, and remit taxes on your products, tax collected from the customer will be shown with the order transaction details and applicable account reporting.
Seller account setting changes
Do I need to edit my seller Account settings when MTC begins?
Typically, you do not need to take action in your seller account when MTC begins. Your existing tax calculation settings, order/transaction details, and payment reporting will update automatically to reflect Amazon’s responsibility.
Non-MTC product types and/or supported jurisdiction options, where you may continue to have a tax responsibility, will also update automatically in your Tax Settings.
Unexpected taxability behavior may occur if your product listing(s) and/or tax settings are not up-to-date. We recommend you regularly review and update the following information in your account settings:
- Review the non-MTC tax calculation options in the Tax Settings page.
- Your listings detail and category information (For additional information see the question above How does Amazon determine if an item I sell is taxable?).
- Business Address to ensure we know where your business is located.
You should work with your tax advisor or the tax authority to identify changes to your reporting and any personal or corporate tax obligation.
Can I edit my tax calculation settings for a state with Marketplace Tax Collection?
You do not need to edit your tax settings for an MTC State. An MTC State with non-MTC jurisdictions supported by Amazon will be updated and editable in your Tax Settings as soon as support becomes available.
Seller Account Reporting information
Will I receive regular statements of MTC taxes Amazon collects?
Your normal order/transaction details and account reporting acts as the “statement” that identifies taxes Amazon calculated, collected and remitted vs taxes calculated by your Tax Settings that are disbursed to you, for remittance to a tax authority.
Order/transaction details, payments and tax reporting identified below will include the total tax collected from a buyer. Any MTC taxes will then be shown as a deduction for “Marketplace Withheld Tax” or “Marketplace Facilitator” representing any amount Amazon is responsible for under MTC rules. Any remaining tax amount is your responsibility to report and remit to the appropriate tax authority.
What are my reporting options and how do I identify Amazon-collected sales tax?
Marketplace Tax Calculation details are available in the Tax Document Library, Marketplace Tax Collection Report. See Sales Tax Information in Seller Reports Help page for additional information.
For individual order details, use the Order Details or Transaction Detail pages. When Tax Collection Model equals Marketplace Facilitator and Tax Collection Responsible Party equals Amazon, tax is automatically collected by Amazon.
For a summary of multiple order details, use the Date Range Report or Order Report (orders you fulfill) and see the report specific information below.
- The Sales Tax Collected column reflects the total amount of taxes collected on the order.
- The Marketplace Facilitator Tax or Marketplace Withheld Tax (depending on the report version) column reflects the amount of tax deducted from the order proceeds that Amazon will remit to the tax authority.
- If an amount reflected in the Sales Tax Collected column is less than the Marketplace Facilitator Tax or Marketplace Withheld Tax column, it is the seller’s responsibility to remit the remaining taxes to the appropriate tax authority.
- The Tax Collection Model column will display Marketplace Facilitator when Amazon calculated, collected, and remitted sales taxes on your product/order.
- The Tax Responsible Party column will display Amazon when Amazon made a tax calculation on your product/order.
How does Amazon Tax Exemption Program (ATEP) apply to Marketplace Tax Collection (MTC)?
For orders where MTC applies, Amazon may accept an ATEP enrolled buyer exemption. However, sellers will not have access to download the exemption document as taxes collected under MTC are Amazon’s responsibility.
Your ATEP settings and document availability will continue apply to non-MTC transactions where your tax settings are used. For additional information see How ATEP Works.
Does the Tax Calculation Service (TCS) fee apply to Marketplace Tax Collection (MTC)?
No, Amazon does not apply the TCS fee for the MTC portion of tax calculations.
Tax calculations for orders to non-MTC jurisdictions will continue to use your tax settings and any applicable service fee will still apply to those calculations.
Can I opt out of Marketplace Tax Collection?
No, there currently is no option to opt out.
Can I prevent Amazon from shipping to states or jurisdictions with MTC?
No, there currently is no option to restrict sales to specific destinations supported by the Amazon store for tax reasons.
Who handles a customer tax-only refund request on orders?
Sellers are responsible to answer buyer tax-only refund requests on:
- Merchant fulfilled orders when your Tax Settings was used to calculate taxes.
- See the How to refund tax help page for additional information.
Amazon Customer Service will answer buyer tax-only refund requests on:
- Orders with tax calculated by Amazon under MTC rules, and
- All Fulfillment by Amazon (FBA) orders, regardless of tax responsible party
- Amazon Tax-Exemption Program
- US Marketplace Tax Collection FAQ
- Tax on U.S. seller fees FAQ
- Marketplace Withheld Tax
