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This article applies to selling in: United States

Tax on U.S. Seller Fees FAQ

Important: The information provided on this page does not constitute tax, legal, or other professional advice and must not be used as such. You should consult your professional tax adviser if you have questions about your personal tax obligation.

Why does Amazon collect sales tax on fees?

Some states consider Selling on Amazon fees, such as per item, order, and referral fees taxable services. Similarly, Fulfillment by Amazon (FBA) inventory prep fees, such as bubble wrap, polybag, taping, and labels are considered taxable in some states. To comply with state tax laws, collects and remits sales tax on some of these fees.

Which fees are considered taxable?

Amazon offers many services and programs to sellers and the fee taxability will depend on the location of your business or where the FBA service is performed and individual state tax rules.

To understand the different fees Amazon charges, see our fee schedules:

Selling on Amazon Fee Schedule

FBA Fulfillment Fees

What determines whether I will pay sales tax on fees?

The chart below illustrates the different U.S. taxing jurisdictions in which a fee may be taxable. The sales tax rate will depend on the state rate plus local tax rates and when those rates apply will depend on the location of your business or where the FBA service is performed. State tax rules can change frequently and the information below may become outdated if states make changes to their laws.

Country / Jurisdiction Selling on Amazon Fees (based on your business location) FBA Service Fees (based on fulfillment center location)
US – Arizona Non-Taxable, except Subscription Fee is Taxable - State Taxable – State + Local
US – Connecticut Taxable – Reduced State 1% Only Taxable – State
US – District of Columbia Taxable – State Non-Taxable
US – Hawaii Taxable – State + Local Non-Taxable
US – Illinois Non-Taxable 50% of fee total is Taxable – State + Local
US – South Dakota Taxable – State + Local Non-Taxable
US – West Virginia Taxable – State + Local Taxable – State + Local

The following examples illustrate how the sales tax will be calculated:

  1. If your business is located in West Virginia, your sales tax rate is 6.39%, and you sell an item with a total price of $20, which is subject to a 15% referral fee, we will collect and remit a sales tax of $0.19 to comply with state laws (calculated as 6.39% of the referral fee amount of $3.00).
  2. If your business is located outside Connecticut, the District of Columbia, Hawaii, South Dakota, or West Virginia, we will not collect sales tax on the Selling on Amazon fee you pay.
  3. If you decide to use FBA Prep Service to bubble wrap your products, and the service is performed at a fulfillment center in Arizona, and the sales tax rate at that location is 8.37%, and the bubble wrap fee is $0.80/unit, we will collect and remit a sales tax of $0.07 to comply with state laws (calculated as 8.37% of the bubble wrap fee amount of $0.80/unit).
  4. If you decide to use FBA Prep Service to bubble wrap your products, and if the service is performed at a fulfillment center outside Arizona, Connecticut, Illinois or West Virginia, we will not collect sales tax on the FBA Inventory Prep fees you pay.

I am located outside of the U.S. Why am I paying VAT/GST/Tax on my Selling on Amazon fees?

Some countries consider physical and electronically supplied services purchased from Amazon to be taxable. Amazon will use the information you supply in your seller account to determine if any particular fee is taxable and the appropriate VAT/GST/Tax rate to charge. Tax rules and regulations are country specific. See your VAT Information and/or search VAT, GST, or your country name in Seller Central help to locate additional information.

Can I receive a refund of tax collected on my fees?

If you receive a refund for fees paid, any applicable tax on the refunded fee will also be refunded at that time.

My business is exempt or I have an exemption, how do I become exempt from tax on my taxable fees?

At this time, we are unable to automatically process exemptions for taxable fees. If you have a tax exemption for your business, you may contact Selling Partner Support to request a tax only refund, based on your business exemption.

Can I opt out of using FBA fulfillment services that may be taxable?

FBA services are performed on your items when you have elected to purchase these services from Amazon or when items are received that do not meet packaging and prep requirements.

You can manage your FBA settings here. To learn more, visit Packaging and prep requirements.

Will I receive an invoice for taxes paid on fees?

No, you will not receive an invoice on the tax you pay on fees. Any order with a taxable seller fee will be reflected on the transaction details page of your Payments reports.

When did Amazon begin collecting sales tax on fees? began collecting sales tax on fees beginning June 1, 2019. Our tax policies are continuously updated in compliance with State law.

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