Amazon, one of the world’s biggest platforms, offers numerous opportunities to those who want to earn money, succeed and live the life of their dreams. This is why people try themselves in the role of Amazon sellers, thinking that operating a business on Amazon is as easy as A-B-C. However, everything is not that simple! What Amazon sellers don’t know is that Amazon is obsessed with the idea of good customer service. This means that any third-party seller can have problems with the platform if they don’t meet its requirements.
Apart from sourcing products and listing them on Amazon, there are many other things to consider. For example, third-party sellers will definitely face Amazon suspensions or tax problems that have always existed on the platform. Among these problems, sales tax has its own place. People, especially Amazon sellers, have always struggled because of this type of tax, and that’s completely normal. However, a few years ago there were no services that would help Amazon sellers. Now, Amazon sellers have a perfect opportunity to get appropriate help, which is so important nowadays! If you are also one of the Amazon sellers who need help in the sphere of sales taxes, this article is just for you!
So, today we will talk about Amazon tax problems that always stand between Amazon third-party sellers and their goals. What’s more, we will thoroughly describe all the details that Amazon FBA sellers should know prior to operating their business on this platform. From now on, no third-party seller will be alone while dealing with sales taxes!
What is Sales Tax?
Sales tax is a percentage of sales that solely customers pay for a taxable item when making purchases from the retailer store. If you’re an Amazon seller who is running an e-commerce business in the United States, you should know that sales tax is being governed at the state level. Why? Because there’s no mutual sales tax system in the United States: each state has its own regulations.
If you’re one of those FBA sellers who are concerned about Amazon sales taxes, don’t be! In this very article, we will sort out all the details for you.
P.S. Sales taxes only seem scary: in reality, it’s very easy to deal with them if you have enough knowledge about them!
Do You Need to Collect Sales Tax?
So, first of all, you need to know in which states you are required to conduct sales tax collection. This can be done with the help of simple research, however, we will clarify why and when you can collect sales tax. To be short, you should meet the following requirements in order to start the sales tax collection:
- Having tax nexus and a physical presence in a state
- The product sold with FBA is exposed to sales tax
Now that you know when a third-party Amazon seller needs to collect sales tax, let’s move on to the next step.
Guide On How to Report Sales Tax for Amazon Sellers
Now let’s understand how you can report collected FBA sales tax. As we already said, everything that’s related to sales tax is governed by the state where you’re operating your business. This in turn means that states need to know how much sales tax you collect during the year from each county. For this, you can simply log in to your Amazon seller account, and download a report that is dedicated to a certain filing period. With the help of this report, you’ll see the exact amount of sale stax that you have collected in states, cities, and counties.
Is There Any Other Way?
However, if you don’t want to do it on your own, you can use automation! It’s also called sales tax automation, which by the way, offers comprehensive reports for Amazon sellers. So go ahead and choose: which option is better?
After finishing this step, start filing your sales tax returns.
Filing Sales Tax Returns With Amazon FBA Sellers
Have you ever thought about all the ways that can help you file Amazon FBA sales tax returns? Well, you have your answer in this very paragraph!
Even though “there is no such thing as a good tax,” there are many things that can expedite this already disagreeable and hostile process. For example, you can file Amazon FBA sales tax returns online. This method is considered to be one of the safest options since everything is well-thought and well-planned. You just have to enter your state’s taxing authority’s website, upload your sales tax return, and voila, everything is done within a few minutes!
You can always file your sales tax returns with the help of sales tax software. This way, your sales tax will be filed automatically, which will surely save you time. Let’s be honest, Amazon sellers have more important things to worry about: sales tax is not the only thing they should occupy themselves with!
Are There Any Risks?
However, while filing your sales tax returns via this sales tax software, remember about the risks that each software-based method involves. More specifically, even software can make mistakes, they are called malfunctions, errors, or glitches. So, if something like that happens to your software, you may screw up this entire sales tax filing process.
Dear Amazon sellers, don’t be afraid of taxes. Even if you don’t know anything about them, Amazon has special guidelines for you. Remember, even Amazon wants you to sell legitimately on its platform, which means that if you’re an Amazon FBA seller, Amazon will take care of you.
We know how hard it is to comply with Amazon’s requirements, especially for Amazon third-party sellers, but if you have enough knowledge, you can definitely succeed! However, we would like to stress the fact that sometimes even the simplest things require specialists. So, third-party sellers, as well as Amazon FBA sellers who are not sure about their sales tax-related abilities and experience should contact tax professionals. They will help Amazon sellers fulfill their duties and responsibilities, and operate a legitimate business on Amazon. So, if you’re one of those Amazon sellers who need help, don’t be shy, contact people who know this sphere!