US Marketplace Tax and Regulatory Fee 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 “facilitate” the sale of physical property, digital goods, and/or services owned and supplied by the third party through an online store or “marketplace.” 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 laws that identify the MPF as the party responsible to collect and remit sales and use taxes and/or regulatory fees on products shipped to customers in those jurisdictions (state, county, city, district) that have enacted such laws.

What is the difference between Marketplace Tax Collection (MTC) and Tax Calculation Services (TCS)?

• MTC: Amazon is responsible to calculate, collect, remit, and refund supported sales and use tax and/or regulatory fee. Amazon (as the taxpayer/MPF) will remit MTC taxes collected from the buyer directly to the appropriate tax authority, according to applicable legislation.
• TCS: A service available to professional sellers on Amazon to assist with their obligation to calculate sales and use taxes on products they ship to a customer within the United States. Taxes calculated using TCS are collected from the customer and disbursed to the seller for the seller to report and remit to the appropriate tax authority.

Which US States have Marketplace Tax Collection (MTC) rules?

All US States with a sales and use tax have enacted MPF/MTC laws. Missouri’s laws go into effect on January 1, 2023.

There are some local jurisdictions where state MPF/MTC laws do not apply, such as Colorado Home Rule Cities, some Alaska cities and boroughs, and Illinois retail occupation tax prior to December 31, 2021. Use the hyperlinks provided for additional information about each state.

How do I obtain a state certificate of collection form?

Click the Certificate of Collection to download a state specific form.

Other state forms (such as AZ Form 5020, CO Form DR1290, CT Form DRS-055, IL Form CRT-63, MA Form ST-16, New York ST-150) are not provided by Amazon as the Amazon Business Solutions Agreement, corresponding help content, and payments reporting satisfies the state requirement of publishing explicit information regarding Amazon’s responsibility to calculate, collect, and remit sales and use tax on product sold to customers their jurisdictions.

When will Marketplace Tax Collection (MTC) apply to my product or orders?

MTC applies to product sold to buyers in jurisdictions (state, county, city, district) that have enacted MTC tax legislation. By selling on Amazon, sellers agree to automatic MTC irrespective of their location, volume, or quantity of sales made by the seller, or use of Amazon’s Tax Calculation Services for non-MTC jurisdictions or MTC excluded products and services.

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 subject to Marketplace Tax Collection (MTC)?

Amazon uses the product category and item description provided or selected when creating a product listing to determine if tax or fees apply to product you sell.

Who is responsible for taxes and fees not included in Marketplace Tax Collection (MTC) or before MTC was effective?

Sellers are responsible for their tax calculation, collection, and remittance obligations on sales of products to a buyer in a non-MTC jurisdiction, regardless if supported by our service.

If you participate in Tax Calculation Service (TCS), your Tax Settings will reflect taxes supported by the service, and your current jurisdiction configuration that will apply when MTC rules do not. For more information, go to the Tax Calculation Service help page and Tax Calculation Services Terms.

Regulatory fees we do not yet support or are not subject to MTC rules are not currently supported by our service.

Regulatory fees that apply to a buyer’s whole order (such as Colorado Retail Delivery Fee) versus an individual item you sell will not be included in your order, transaction detail pages, or payments reporting.

You may continue to have a reporting obligation for both MTC sales and use taxes and regulatory fees Amazon calculates, collects, and remits on your product sales.

Why is there sales tax collected on some regulatory fees?

Some jurisdictions consider a regulatory fee as taxable for sales and use tax. Some jurisdictions do not. When applicable, Amazon will calculate, collect, and remit sales and use tax on a fee under the MTC laws.

Who is responsible for Marketplace Tax Collection (MTC) reporting, remitting, and filing with a tax authority?

Amazon will remit MTC taxes according to each tax authority legislation, as the MPF/taxpayer. You do not need to remit taxes and fees that Amazon has calculated, collected, and remitted and identified as MTC in your payments reporting (see "Seller account reporting information" below).

Amazon is only responsible for taxes and fees under MTC law. 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 a state.

You may continue to have a reporting obligation for both MTC sales and use taxes and regulatory fees Amazon calculates, collects, and remits on your product sales.

If you have double remitted MTC sales and use tax and/or fees from your Amazon orders, 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 Marketplace Tax Collection (MTC) apply to my products?

Yes, in the US, MTC rules are subject to the tax rules and legislation where the buyer is located.

If Amazon determines it has an obligation to calculate, collect, and remit taxes and/or regulatory fees on your products, MTC amounts collected from the buyer will be shown with your payments reporting.

Do I need to change any of my seller Account settings for Marketplace Tax Collection (MTC)?

Typically, you do not need to take action in your seller account for MTC. If you use Tax Calculation Service, your existing tax calculation settings will not apply when MTC does.

Seller Central payment reporting will automatically reflect Amazon’s responsibility when MTC applies.

Sellers may continue to have a responsibility for tax and regulatory fees on sales of products to a buyer in a non-MTC jurisdiction and/or for product types or fees that are not supported by our service.

I believe Amazon got Marketplace Tax Collection (MTC) taxability wrong, how do I fix this?

Amazon uses your listing detail and category information to determine taxability of your product when MTC applies. An unexpected product taxability behavior may occur if your product listing(s) are not up-to-date.

If a buyer contacts you about an incorrect tax calculation, see Who handles a buyer tax-only refund request on orders.

We recommend you regularly review and update the following information in your account settings:

• Your listings detail and category information. For additional information, go to How does Amazon determine if an item I sell is subject to Marketplace Tax Collection (MTC)?.
• Your business address to ensure we know where your business is located.
• Your default shipping address to ensure we know where you ship from.

Can I edit my tax calculation settings for a jurisdiction with Marketplace Tax Collection (MTC)?

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.

Can I manage regulatory fees I want to calculate?

Currently, regulatory fees unrelated to a Marketplace Tax Collection rule, are not supported by Amazon. Your tax professional can help you understand regulatory fee obligations you or your business may have.

Will I receive regular statements of Marketplace Tax Collection amounts?

Yes, your payments reporting is a “statement”.

How do I identify Marketplace Tax Collection (MTC) amounts in my reporting?

Once an order with MTC is finalized, any MTC tax or regulatory fee amounts Amazon remits will be represented in your order detail pages and downloadable payments reporting. Reports may use various attributes; however, the following applies (as applicable):

• Amazon’s MTC responsibility is represented as “Marketplace Facilitator” or “Amazon”
• Amazon's MTC responsibility, plus a seller's TCS calculation, on a single order is represented as "Combined MTC+TCS"
• MTC amounts deducted from an order are represented as “Marketplace Withheld Tax,” “Marketplace Facilitator Tax,” and/or “Marketplace Facilitator Regulatory Fee.”

Additionally, professional sellers have access to jurisdictional tax rates and totals in their Marketplace Tax Collection Report. Select this report when generating a sales tax report in the Tax Document Library. Go to Sales Tax Information in Seller Reports for other tax report types and information.

Any remaining tax amount (if any) not deducted for MTC is disbursed to you with your normal order earnings for you to remit to the appropriate tax authority.

What are my reporting options?

On Seller Central, go to Reports and select Payments to get started.

For more information, go to Payments FAQ and FBA Business Report.

How does Amazon Tax Exemption Program (ATEP) apply to Marketplace Tax Collection (MTC)?

Amazon may accept an ATEP enrolled buyer exemption for applicable MTC jurisdictions. The related exemption document will not be available to download when MTC applies.

Your Tax Settings ATEP enrollment selection and associated exemption document availability will continue to apply on non-MTC transactions where your tax settings are used. For additional information, go to 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 MTC calculations.

Tax calculations on product sold to buyers in non-MTC jurisdictions will use your configured tax settings and any applicable service fee will apply to those calculations.

Can I opt out of Marketplace Tax Collection?

No, there is no option to opt out.

Can I prevent Amazon from shipping to Marketplace Tax Collection jurisdictions?

No, there is no option to restrict sales to specific destinations supported by the Amazon store for tax reasons.

Who handles a buyer tax-only refund request on orders?

Sellers are responsible to answer buyer tax-only refund requests on:

• Merchant fulfilled orders when your Tax Settings were used to calculate taxes.
• Go to the How to refund tax help page for additional information.

Amazon Customer Service will answer buyer tax-only refund requests on:

• Orders with a tax and/or regulatory fee calculated by Amazon under MTC rules, and
• All Fulfillment by Amazon (FBA) orders, regardless of tax responsible party