Amazon Collecting Sales Tax from Washington Buyers
Amazon FBA sellers were recently notified that Amazon would now collect sales tax from Washington buyers on behalf of 3rd party sellers. Why this change? And what does this mean for Amazon FBA sellers?
Amazon now collecting Washington sales tax on behalf of 3rd party sellers?
Washington passed a “marketplace facilitator law” that goes into effect on January 1, 2018. This law requires some online marketplaces to collect sales tax on behalf of 3rd party sellers who use their platform to list and sell products. Amazon has agreed to comply with Washington’s law, meaning they will begin collecting sales tax on behalf of 3rd party sellers beginning January 1.
Amazon Collecting Sales Tax: What changes for Amazon FBA Sellers
Good news! Washington sales tax filing will become easier, at least when it comes to your Amazon sales. While Amazon sellers are still required to file a Washington sales tax return, they are no longer required to break down Amazon sales by city, county and special taxing district.
Instead, Washington sellers still need to report their total sales, but they can report the sales tax Amazon collected on their behalf as an “Other” deduction. The Washington Department of Revenue advises sellers to label the deduction “sales tax remitted by third party.” This means you’ll still need to know how much in sales tax you made via Amazon, and how much sales tax Amazon collected for you, but you won’t have to go to the trouble of breaking down your sales by jurisdiction.
Amazon Collecting Sales Tax: What won’t change for Amazon FBA Sellers
Almost everything else will stay the same when it comes to Washington sales tax.
Amazon sellers are still required to file a Washington sales tax return on time. This includes also filing and paying Washington Business & Occupation (B&O) tax on your Washington sales. B&O tax is about half a percent of your gross sales to buyers in the state of Washington and is filed and remitted at the same time as your sales tax return.
Multichannel seller is still required to collect sales tax from Washington buyers on their non-Amazon channels. This is because Amazon FBA sellers are still considered to have sales tax nexus in the state of Washington if your inventory is stored in a Washington Amazon fulfillment center. For example, say you sell on Amazon FBA and through a WooCommerce store. If you have nexus in Washington, you’d still be required to collect Washington sales tax on sales made through your WooCommerce store.
When you file your sales tax returns, you are also still required to break down any non-Amazon sales tax by city, county and special taxing district. The only change in sales tax filing has to do with your Amazon sales, as I mentioned above.
I hope this has helped demystify what Amazon collecting Washington sales tax on behalf of 3rd party sellers means for you. You can read our entire FAQ on Amazon now collecting Washington sales tax here. Or you can watch our expert panel talk about the change here:
This article was provided to AmazonSellersLawyer.com by TaxJar. TaxJar is a service that makes sales tax reporting and filing simple for more than 10,000 online sellers. Try a 30-day-free trial of TaxJar today and eliminate sales tax compliance headaches from your life!