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As a seller of little widgets that just started on Amazon a few months ago, that's exactly what I have just discovered this past week as Q1 2019 ended. I sell o

As a seller of little widgets that just started on Amazon a few months ago, that's exactly what I have just discovered this past week as Q1 2019 ended. I sell one widget for $25 and I have to file, and I sell $0 in another state where Amazon has a warehouse, and I still have to file. TaxJar will do everything for me, but it's $20 per filing period per state. If you have a monthly filing period in 50 states that will be $1000/month, $12000 year, just to file. Actually paying the taxes, that must also be calculated town-by-town, is on top of the $12000/yr. Note: TaxJar offers a 20% discount for annual and lots of filings, and is a great company and service, but the foregoing illustrates the problems for small companies going forward.

toss1 7y ago
Perhaps I'm missing something, but what is not clear here is whether, going forward, Amazon collects the taxes on Fulfilled-By-Amazon products, and whether that eliminates the need for each small vendor to file separately. If Amazon does not collect the tax, and every small vendor needs to file for every micro-sale, this could have a massive negative effect on online commerce in general and particularly for Amazon, likely to see it's small vendors dropping like flies and undermining it's Get-Anything-On-Amazon approach
- dhimes 7y ago
  My hunch is that if this is a problem then Amazon will soon provide a turnkey solution for its vendors. It would be a great competitive advantage to prevent the tax headaches.
  - toss1 7y ago
    Seems like a good hunch. They've certainly got the capital, bandwidth and experience to do this, and id would be a HUGE competitive advantage. If the states get really aggressive going after the small vendors selling from their own websites, it'll even drive them to work through Amazon... Great for the AMZN stockholders, but not so great for the ecosystem...
rgbrenner 7y ago
Each state has a minimum gross sales before sales tax must be collected. In CO (where I am), it's 100k/yr shipped into CO; in CA, it's 100k/yr or 200 orders. But if you have a physical presence in CO (or CA), then you have to collect it for all orders (no minimum). But CO and CA consider Amazon FBA warehouses to be an extension of your business. So if you wanted to make it cheaper, just don't use Amazon's warehouses to store and ship goods from. Also a lot of states allow sales tax to be filed annually.
- teilo 7y ago
  In most states, filing periods are based upon transactional volume. Sometimes that's defined as the transaction count. Sometimes that's the tax base itself. But with lower volumes, you can often do quarterly or annual filings, depending.

toss1 7y ago

Perhaps I'm missing something, but what is not clear here is whether, going forward, Amazon collects the taxes on Fulfilled-By-Amazon products, and whether that eliminates the need for each small vendor to file separately. If Amazon does not collect the tax, and every small vendor needs to file for every micro-sale, this could have a massive negative effect on online commerce in general and particularly for Amazon, likely to see it's small vendors dropping like flies and undermining it's Get-Anything-On-Amazon approach

dhimes 7y ago
My hunch is that if this is a problem then Amazon will soon provide a turnkey solution for its vendors. It would be a great competitive advantage to prevent the tax headaches.
- toss1 7y ago
  Seems like a good hunch. They've certainly got the capital, bandwidth and experience to do this, and id would be a HUGE competitive advantage. If the states get really aggressive going after the small vendors selling from their own websites, it'll even drive them to work through Amazon... Great for the AMZN stockholders, but not so great for the ecosystem...

rgbrenner 7y ago

Each state has a minimum gross sales before sales tax must be collected. In CO (where I am), it's 100k/yr shipped into CO; in CA, it's 100k/yr or 200 orders. But if you have a physical presence in CO (or CA), then you have to collect it for all orders (no minimum). But CO and CA consider Amazon FBA warehouses to be an extension of your business. So if you wanted to make it cheaper, just don't use Amazon's warehouses to store and ship goods from. Also a lot of states allow sales tax to be filed annually.

teilo 7y ago
In most states, filing periods are based upon transactional volume. Sometimes that's defined as the transaction count. Sometimes that's the tax base itself. But with lower volumes, you can often do quarterly or annual filings, depending.