Amazon FBA Sellers: Multistate Taxation Commission’s Program Offers Sales Tax Amnesty
Sales Tax System is gearing up to help thousands of Amazon FBA third party sellers get into compliance with sales tax through a new program offered by the Multistate Taxation Commission.
Amazon.com FBA sellers (a third-party seller) are required to collect and remit sales tax for their own sales. Amazon is only responsible for collecting and remitting sales tax on their own products. A majority of Amazon FBA sellers did not realize it was their responsibility to collect and remit sales tax and now have a proposed short-term voluntary disclosure period that has been orchestrated by The Multistate Taxation Commission (MTC), headed by Richard Cram.
The MTC meets on July 31st in Louisville, Kentucky to iron out the details for the voluntary disclosure process and the number of states participating, which may be up to 14-15 (now 18) states according to Richard Cram.
“We are thrilled that the MTC, with Richard Cram’s guidance, is reaching out to provide Amazon FBA sellers this one-time opportunity to get into compliance with sales tax and come out of hiding from the fear of huge sales tax penalties and interest due (mostly due to inaccurate information from other sellers and accountants on who is responsible for collecting and remitting the sales tax),” said Scott Letourneau, founder and CEO of Sales Tax System.
The two-step proposed process requires Amazon.com FBA sellers to apply for voluntary disclosure relief through the MTC Multistate Voluntary Disclosure Program (MVDP) and, upon approval from the states, move forward to apply for sales tax permits in those states. The third-party seller will agree to collect and remit from a future proposed date and stay in compliance in exchange for the states waiving any past sales tax liability. This is a huge win for both the third-party seller and the states that may see thousands of sellers take advantage of this one-time opportunity, which is proposed, between August 17- October 17th.
Not all Amazon FBA states (a total of 25) will participate in this special MVDP. Separately, it is recommended that third party sellers comply with past sales tax, penalties, interest and past returns with the other states (where their inventory or stock is stored) not participating in this program. Sales Tax System guides their US & Foreign members who sell on Amazon’s FBA Marketplace, navigate through the many steps involved before and after applying for sales tax permits and compliance with sales tax.
“In the end, this will be a huge win for the states with future sales tax revenue, especially from foreign sellers who don’t believe sales tax compliance is required because they are the U.S. Foreign sellers and are not protected by a U.S. tax treaty. Sales tax compliance is not protected because it is at the state – not federal – level,” said Letourneau.