[et_bloom_inline optin_id=optin_3]
Chris McCabe and Paul Rafelson talk sales tax
Question: If Amazon owns the customer (they are not your customers as a seller) then why do Sellers pay the sales tax?
- Image you walk into Walmart and buy a laptop, at the checkout they don’t charge you sales tax and say that they are a marketplace and you’re just using their checkout platform – Dell is the retailer and so they are not collecting sales tax
- Amazon are putting jobs and warehouses on the table and States are not pushing Amazon to collect sales tax
- It’s an interesting and disturbing situation
How to protect Amazon Sellers
- It’s bigger than sales tax
- Sales Tax is one point
- When you’re FBA then States see you as having an income tax liability as well
- Income tax returns is way more expensive than sales tax
- And multiply it across the States
- Cost of compliance can be over $100k
- The cost of administering this tax is a huge drain
States back-taxing
- California is back taxing by upto 8 years and going aggressively after Sellers
- Amazon has only been collecting for 6 years
- So sellers could end up paying more than Amazon are liable for
- There’s a lot of paralysis – conflicting information is causing anxiety
Head in Sand and Ignorant? – What baby steps can you take
- If you are concerned then consider a lawyer or tax specialist
- Make sure they understand this area
- Sellers that don’t know what to do about sales tax
- Arrange your affairs to protect yourself from liabilities
Amazon is Bullet Proof right now
- A case in Tennessee where a hoverboard caught fire and burned down the customer’s house
- Even-though Amazon knew of the fault
- The judge said they were not liable
- Liability issues on consumer goods – the plaintiffs lawyer will come after you as seller because you are the low-hanging fruit compared to going after Amazon
Can’t get your head around it
- There’s a political element
- There’s a tax element
- A Financial element
- You have to educate yourself on taxes
- Have to know what other states are doing – all have different rates
- You want to get a service provider to deal with it like TaxJar
