Sales Tax for Amazon Sellers
The topic of sales tax is of great significance and invariably on the minds of every Amazon seller. Where to register? What are the costs? Am I collecting in all of the right states? What are the consequences of me registering now? Do I have to collect sales tax if I am not located in the United States? All of these questions directly correlates with each Amazon seller no matter where you are located globally. As I mention in my book, Sales Tax for Amazon Sellers, it all equates to the cost of registering in each state.
As a CPA who specializes in accounting and tax for FBA sellers, registering in multiple states for sales tax can be both beneficial and costly simultaneously. The benefit is that you don’t have any of the states, such as California, badgering or hounding you about registering in their state. In turn, this gives you peace of mind.
On the flipside, this can be expensive. Once you register for sales tax, many states will look to make you register for income taxes as well. The exorbitant fees add up quite quickly. Besides paying to have your sales tax returns completed, you now have to pay income taxes in those states. Between taxes and preparation fees for your sales tax and income tax returns, it may not be cost-effective to register in all of these states.
Take a moment and reflect back to when you first embarked upon selling on Amazon. Most likely you weren’t generating too much revenue at that stage. The states are saying you should have registered in each state when you were selling initially and for the first time. That would have put you out of business instantly. It’s not a matter of wanting to register and collect sales tax in each state, rather, it’s a matter of whether your business can afford it or not. Call us today if you have questions about registering for sales tax for your Amazon sales.
If you are an Amazon seller and require the assistance of an experienced Certified Public Accountant, please contact Ebiz Accounting for an initial consultation. We provide Amazon business accounting services to clients in New York and throughout the United States.