Marketplace Tax Collection for Alaska FAQ

What is a Marketplace Facilitator?

In the United States, a marketplace facilitator is commonly defined as a business who 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 for third party sales facilitated through our store and is responsible to calculate, collect, remit, and refund sales and use tax on orders shipped to a jurisdiction (state, county, city, district) that has enacted marketplace facilitator or similar laws.

What is Marketplace Tax Collection?

Marketplace Tax Collection is a common term Amazon uses for marketplace facilitator tax legislations. Marketplace facilitator rules can be country, state, and/or jurisdiction specific (country, state, county, city, district). These rules identify the party responsible to collect and remit sales and use tax for orders shipped to a jurisdiction where marketplace facilitator laws have been enacted. In these jurisdictions, Amazon will be responsible to calculate, collect, remit (as the taxpayer), and refund sales and use taxes.

What is unique about Alaska's marketplace facilitator legislation?

Alaska does not currently impose state level sales and use tax. Each local government (city, borough, jurisdiction, municipality, etc.) governs their sales and use tax ordinances and rules independently of each other.

The Alaska Remote Seller Sales Tax Commission is a single-level administration that coordinates Alaska’s local government remote seller and marketplace facilitator tax reporting and remittance rules and ordinances. These local government ordinances shift the tax responsibility to Amazon for the jurisdictions that opt-in to participate.

As a result, Amazon is unable to calculate, collect, or remit sales and use tax on orders destined to non-participating jurisdictions. If local sales and use tax is appropriate for an order destined to a non-participating jurisdiction, you may continue to have an obligation to remit the full sales and use tax rate, even though you cannot calculate and collect tax from buyers on orders to non-participating jurisdictions using the Tax Calculation Service.

Do any Alaska jurisdictions have Marketplace Tax Collection?

Marketplace Tax Collection will occur as Amazon implements local ordinance changes. Taxes collected by Amazon will be reflected in your order reports, available in Seller Central.

For more information, see Sales tax information in seller reports.

What will happen to Tax Calculation Services for Alaska?

Effective April 1, 2020, Tax Calculation Services will no longer support tax calculations on buyer orders destined to non-participating jurisdictions.

Amazon is the responsible party to calculate, collect, and remit (as the taxpayer) local sales and use taxes on your orders destined to participating jurisdictions.

What taxes will be calculated on third-party orders shipped to Alaska?

Amazon will calculate and remit (as the taxpayer) to participating jurisdictions local sales and use taxes on your orders, but will not calculate and remit non-participating jurisdiction taxes.

What tax am I as a seller responsible for on orders shipped to Alaska?

You may continue to have an obligation to remit the full sales and use tax rate, even though you cannot calculate and collect tax from buyers on orders to non-participating jurisdictions using the Tax Calculation Service.

Your responsibility depends on your business obligations. Please consult your professional tax advisor to determine any impact of Alaska’s jurisdictional marketplace facilitator legislation on your business.

What is Amazon doing to support non-participating local jurisdiction tax calculations?

We are currently working on enhancements to our Tax Calculation Services to support non-participating jurisdictions. In the meantime, we encourage you to work with your tax professional to determine any impact to your business.

How do I find orders shipped to Alaska’s non-participating jurisdictions to help me determine my non-participating local jurisdiction taxes?

Your Payments Date Range Report is the best option to locate orders shipped to an Alaska jurisdiction.

1. Go to your Date Range Reports. Click Generate Report and enter a date range in the pop-up window to generate a report for the date range you want to review.
2. When the report is ready, the Download button will appear under Action. You can open the report in Excel, Google Sheets, or a similar spreadsheet program.
3. Apply filters in your report starting on row 8 (headers for the columns):
   
   1. Filter column "order state" for Alaska and AK to capture all Alaska orders.
   2. Filter column "order city" for non-participating jurisdictions within Alaska. For a complete list of participating jurisdictions, see the Alaska Remote Seller Sales Tax Commission page.
4. Product sales (amounts) are located in the "product sales" column.

Additional resources (all links are external to Amazon)

For more information, visit the Alaska Remote Seller Sales Tax Commission page.