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Business Related Forums => * Amazon Central => Started by: Southern Jewel's Fab Finds on December 13, 2017, 08:30:07 AM

Title: Amazon Changes to Marketplace Tax Collections
Post by: Southern Jewel's Fab Finds on December 13, 2017, 08:30:07 AM
Changes to Marketplace Tax Collections (https://sellercentral.amazon.com/gp/help/G7VYHGJ8ZT2M58CP)

Beginning on January 1, 2018, Amazon will calculate, collect, and remit sales tax on third-party seller sales shipped to Washington State.
Washington is the first state to enact legislation requiring online marketplaces, like Amazon, to collect sales tax on behalf of their third-party sellers.
We will automatically take these actions for your Washington orders; you don’t need to update your tax collection settings or account information.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: uncleleroy on December 19, 2017, 08:27:30 PM
Better them than us. It would be a nightmare if we had to comply with 45 different state laws for collecting and submitting sales tax
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: Southern Jewel's Fab Finds on December 22, 2017, 04:14:18 PM
Exactly!
Speaking for my accountant, my best friend who is an accountant and the fellow we just rented an Air BnB from whose an accountant?
Taxes are going to be a mess.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: WayOutWest on January 01, 2018, 08:35:55 AM
Since amazon works almost the same way as a consignment shop (especially for those that use FBA) they really should do the filing on behalf of sellers for EVERY state in which Amazon has a physical presence, even the seller's home state. When I do FBA, I'm not warehousing the item, I'm not the one handling the $ in the transaction, and I'm not the one delivering the item to the seller.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: Southern Jewel's Fab Finds on January 01, 2018, 01:09:29 PM
I like the way you think in regards to this matter.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: WayOutWest on March 30, 2018, 02:32:42 AM
Speaking of sales taxes in other states, I just stumbled across this.  Georgia is jumping on the bandwagon of states that are requiring sellers in other states, that exceed a specific volume of sales, to either collect and remit sales tax or notify the customer that they owe it. 

Specifically, Georgia House Bill 61, if passed, will require online retailers who make at least $250,000 or 200 sales a year in Georgia to either collect and remit to the state sales taxes on purchases or send “tax due” notices each year to customers who spend at least $500 on their sites.

It's passed their state house and is on it's way to the state senate.

When exactly did states get to have jurisdiction over businesses located outside their state?  :053

Speaking of, I got a notice a little while back that Amazon provided my seller info to the state of Rhode Island bcas theyve implemented similar legislation.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: uncleleroy on March 30, 2018, 09:53:56 AM
What gets me is the either/or proposition: either collect the tax or send your customer a letter stating they owe the tax to their state. Another reason for a company to have their own website. Make it harder to track to the store owner.

Speaking of which... I have been thinking about opening a website with only downloadable content. No inventory, no shipping, no need to have a business address listed. Only have a customer service email address. Kinda hard to get out-of-state notifications that way. With no proof of stuff being sold (since nothing will go through the post office, ups, etc. there's nothing to see.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: WayOutWest on March 31, 2018, 11:13:01 AM
Just a heads up, Oklahoma legislators are discussing the idea of making 3rd party sellers on Amazon collect Oklahoma sales tax.  Again, dunno why they think they have jurisdiction for it.  And, so far they're just talking about it. But. . .

The pain in the ass about Oklahoma? it's all based on where the buyer is located, even if the seller is based in Oklahoma.  So, you have to figure out is the address inside the city limits or outside the limits (to determine if city sales tax applies) then which county, to determine which county tax to apply, then add on the 4% state sales tax.  When you file, you have to put in the applicable codes for each city and county, and the amount of sales that was sent to each of those.  Very similar to Ohio's method.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: uncleleroy on March 31, 2018, 02:41:46 PM
I am in Ohio and I only remit for the local county rate of 6.5%. Thank God I don't live one county over where it's 8% sales tax. But there's talk about raising it to match Cuyahoga County's 8%. Gotta love those politicians that have never seen a tax they don't like.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: WayOutWest on April 01, 2018, 11:06:49 PM
My mistake. Was my understand that Ohio had switched to a method similar to Oklahoma's, where it's based on buyer's location (actually based on where the buyer takes possession, which in the case of mail order is buyer's address)
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: uncleleroy on April 03, 2018, 10:13:07 PM
Not to my knowledge. I just submit for my location. At least Ohio is getting some money.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: WayOutWest on April 04, 2018, 06:39:43 PM
An update - now the talks at Okla House of Reps is to make Amazon collect and submit sales tax for all 3P vendors. Which, Amazon does have a physical presence in the state, in the form of a sorting center, but does not warehouse FBA items in the state.

So, for FBA sellers, Oklahoma does have a leg to stand on, if you look at it from the perspective of Amazon being akin to a consignment shop. However, for sellers that don't use FBA. . . 

They're also talking about eventually requiring all online selling platforms to collect and remit sales tax on behalf of 3P sellers.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: WayOutWest on April 04, 2018, 11:02:50 PM
Making Amazon collect sales tax from 3P sellers on Amazon for purchases in Okla has passed the Okla House. Now it goes to Okla Senate.

This is being pushed through as a way to increase teacher pay and resolve the teacher walkout. 
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: WayOutWest on April 05, 2018, 04:07:52 PM
In related news, South Dakota recently lost case where NewEgg, Overstock, & Wayfair fought them over this exact thing (making out of state vendors with no physical presence collect sales tax). It was found to violates SCOTUS ruling in Quill v. North Dakota.  South Dakota is still fighting it and it's now headed to Supreme Court. It's expected to be ruled upon by end of June.

https://www.google.com/amp/s/mobile.reuters.com/article/amp/idUSKBN1F12JG (https://www.google.com/amp/s/mobile.reuters.com/article/amp/idUSKBN1F12JG)
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: WayOutWest on April 06, 2018, 01:16:45 PM
Update on Oklahoma taxing 3P sellers on Amazon - it just passed the Senate (already passed the House).

Being called the Amazon Tax, it requires any remote seller and marketplace facilitator with sales of $10,000 or more to collect and provide sales taxes to the state or comply with requirements by the tax commission (in lieu of collecting & paying, notifying each customer at end of year exactly how much tax the customer owes the state).  That overview's from a tv station in Okla City. I presume they mean $10,000+ in sales that are shipped to residents of the state, rather than sales of $10,000+ total, but can't pull up the bill on the state legislation website because the search engine can't handle the fact there are non-numeric characters in the bill number.  It's Okla HB 1019XX
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: uncleleroy on April 08, 2018, 12:53:24 AM
I think that a marketplace facilitator tax is doable, constitutionally speaking. However, forcing websites who are not located within the state to send a letter to each customer and collect taxes for 45 states is crossing the line.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: Southern Jewel's Fab Finds on April 11, 2018, 10:04:36 AM
However, forcing websites who are not located within the state to send a letter to each customer and collect taxes for 45 states is crossing the line.

Agreed
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: uncleleroy on April 11, 2018, 02:24:12 PM
And I am not being the collection agency for states where I have no physical presence. I have more important things to do with my time.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: Southern Jewel's Fab Finds on April 12, 2018, 09:36:32 PM
I have more important things to do with my time.

High Five!
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: uncleleroy on April 13, 2018, 11:53:17 PM
At least B&N marketplace collects taxes for all of my orders and remits it themselves. Amazon can't do the same?
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: WayOutWest on April 15, 2018, 09:58:13 AM
Supreme Court will begin hearing arguments in South Dakota v. Wayfair case on Tuesday.   

If SD wins, it could result in states having jurisdiction over online sellers that are located outside of the state, and allow them to force out of state vendors to collect and remit sales tax.

South Dakota's law that's in question creates nexus based on economics rather than physical presence. It requires online sellers, who do not have a physical presence in SD, but who sell more than $100,000 to residents in SD OR have 200 or more sales to residents of SD, to collect and remit sales tax.

There have been a ton of amici curiae (friends of the court) briefs filed in support of both sides http://www.scotusblog.com/case-files/cases/south-dakota-v-wayfair-inc/ (http://www.scotusblog.com/case-files/cases/south-dakota-v-wayfair-inc/)

Edit to add: a really good article about the case: https://www.bloomberg.com/news/articles/2018-04-16/online-sales-taxes-face-high-court-test-as-states-seek-billions (https://www.bloomberg.com/news/articles/2018-04-16/online-sales-taxes-face-high-court-test-as-states-seek-billions)
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: WayOutWest on April 16, 2018, 08:42:18 AM
And I am not being the collection agency for states where I have no physical presence. I have more important things to do with my time.
Agreed. If they want out of state vendors to collect and remit the sales tax, they need to provide some sort of incentive, such as letting us keep a % of it as a fee. Then, if our sales are high enough, it'll make economic sense for the company to hire someone to do nothing but spend his/her time filing all those forms and submitting those payments. It would be a win-win.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: uncleleroy on April 17, 2018, 08:25:41 AM
Besides the actual collection of every other jursidiction's taxes, what I am incensed about is that every state government is going to know who I am, what I do, and will most likely feel free to make it as hard on me as possible to conduct business anywhere I sell online. There is absolutely no reason why any other state or local government outside of where I live and operate needs to know anything about me. Period. Sick and disgusting is what this type of overreach is. And SCOTUS is willing to buy into it hook, line and sinker.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: WayOutWest on April 17, 2018, 12:16:35 PM
Next they'll be wanting out of state vendors to pay them state income tax based on the % of sales that were shipped to their state.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: Southern Jewel's Fab Finds on April 18, 2018, 09:13:01 PM
Last 2 comments = Agree
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: uncleleroy on April 19, 2018, 10:42:19 PM
From the way the arguments went before the justices, it is definitely up-in-the-air on what the outcome will be. Both sides argued (and made valid points) about small businesses being hurt.

https://www.nytimes.com/2018/04/17/business/justices-divided-on-sales-taxes-for-online-purchases.html (https://www.nytimes.com/2018/04/17/business/justices-divided-on-sales-taxes-for-online-purchases.html)
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: Southern Jewel's Fab Finds on April 20, 2018, 10:06:04 AM
My highlights from the article.
I do have to recommend that all ecommerce sellers read and keep up.

Several justices expressed concerns about imposing crushing burdens on small businesses that sell goods on the internet and about making them liable for back taxes.
Justice Sonia Sotomayor said the case before the court, South Dakota v. Wayfair, No. 17-494, raised “a host of questions” and “a whole new set of difficulties.”

South Dakota responded to Justice Kennedy’s invitation by enacting a law that required all merchants to collect a 4.5 percent sales tax if they had more than $100,000 in annual sales or more than 200 individual transactions in the state. State officials sued three large online retailers — Wayfair, Overstock.com and Newegg — for violating the law.

Some justices complained that they lacked fundamental information about how hard it is to collect the taxes and how much money is at stake. The two sides, Justice Stephen G. Breyer said, were of little help. Estimates of how much it would cost internet businesses to comply with the tax laws of what were said to be 12,000 state and local jurisdictions varied from $12 to $250,000.

Justice Ruth Bader Ginsburg said there could be a market solution, too. “If we did overrule Quill,” she said, “entrepreneurs would produce software that would meet the market need.”


Article I bookmarked to see if there were updates:
Commentary piece: How Amazon wins if internet sales tax goes into effect
https://www.cnbc.com/2018/04/03/how-amazon-wins-if-internet-sales-tax-goes-into-effect.html (https://www.cnbc.com/2018/04/03/how-amazon-wins-if-internet-sales-tax-goes-into-effect.html)
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: uncleleroy on April 20, 2018, 05:58:13 PM
Justice Ruth Bader Ginsburg said there could be a market solution, too. “If we did overrule Quill,” she said, “entrepreneurs would produce software that would meet the market need.”

The problem with that is, software now for sales tax is costing several thousands of dollars. Too expensive for a small store.

Another issue that wasn't dealt with is how each state has recorded larger increases in sales tax receipts over the last 5-7 years that outpace economic growth for the same time period. States that are starving for money are the ones that are mismanaging their finances and carelessly blowing it all on union pensions and every social service a person can conjure up. States have to do a better job of living within their means. We have to as individuals.

Rewording the above paragraph: The argument that states and localities are starving for cash is a bunch of bull.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: Southern Jewel's Fab Finds on April 20, 2018, 08:55:48 PM

Rewording the above paragraph: The argument that states and localities are starving for cash is a bunch of bull.

Kinda Sorta...
There are ALOT of localities and states that are cash poor but federal funds rich.
Catch my drift?
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: WayOutWest on April 20, 2018, 10:10:30 PM
Oklahoma is one of those states that keeps squandering its money.  Schools were underfunded, so we passed the lottery, casino gambling, and raised tobacco taxes. The money from the lottery and casinos was supposed to go to the schools.  Whatd they do? They started spending the money that was already going to schools on other stuff, since it wasnt earmarked for education.  So, here we are again with schools underfunded, teacher strikes, etc.

Heck, a few years back we spent 21million putting a dome with 3ton bronze statue atop the capitol building. Not to mention the tons of money spent defending laws that have been ruled to violate either our state constitution or the federal constitution.  They tried a few times to ban abortion, for example.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: WayOutWest on April 20, 2018, 10:23:34 PM
The problem with that is, software now for sales tax is costing several thousands of dollars. Too expensive for a small store.
Agreed.  Heck, I tried back some time ago to find a software solution for shopping cart that could handle Oklahoma's tax and couldnt find any.  All I could find was stuff that would have to be custom coded.  Even Kohls had to go with a version that first asked what county you were in, then asked customer if address was inside the city limits or outside the city limits, so that it could determine which county sales tax and whether to add city tax or not.

A partial list of big companies that have gotten my tax rate wrong (overcharging me anywhere from 50% more to 100% more than they should have):
AT&T Cellular
Cricket Wireless
TMobile
Best Buy
Wal-Mart
Staples
Office Max
Office Depot
Target
Blockbuster
IBM

If they cant get it right, how does the govt expect small vendors to get it right?  Granted, theyve been slowly getting better, thanks to better software, but still. . .
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: springintoscooters on April 21, 2018, 05:13:50 AM
I still say that the ultimate solution is to make sales taxes due at point of sale, not point of residence.
When was the last time a brick and mortar merchant asked you for your ZIP Code so he could calculate your sales tax?
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: Southern Jewel's Fab Finds on April 21, 2018, 12:03:45 PM
Evidently not.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: uncleleroy on April 22, 2018, 03:47:23 AM
I still say that the ultimate solution is to make sales taxes due at point of sale, not point of residence.
When was the last time a brick and mortar merchant asked you for your ZIP Code so he could calculate your sales tax?

If a sales tax must be collected by online retailers, this is the best solution for those that have no in-state presence in other states.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: WayOutWest on April 22, 2018, 03:46:03 PM
I still say that the ultimate solution is to make sales taxes due at point of sale, not point of residence.
When was the last time a brick and mortar merchant asked you for your ZIP Code so he could calculate your sales tax?
Agreed. That would simplify everything. 
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: uncleleroy on April 22, 2018, 04:20:33 PM
The op-ed in Friday's WSJ as well as letters to the editor were quite good regarding the Wayfair v South Dakota. I've been following it closely as time gets closer to the expected June ruling.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: WayOutWest on April 25, 2018, 07:21:48 PM
just read article from WSJ that sounds a little hopeful. According to the article, Justice Sotomayor said that throwing out Quill would create a whole new set of problems.  And, that Justice Alito also wasn't convinced, saying that overruling Quill could invite states to make more aggressive moves. "Do you have any doubt that states that are tottering on the edge of insolvency and municipalities which may be in even worse position have a strong incentive to grab everything they possibly can?"

But, Justice Kennedy and Justice Ginsburg have both said that perhaps it's time to reconsider Quill and that with the internet, things have changed.   Justice Kagan recognizes that many sellers use 3rd party's such as Amazon to process their sales and that it wouldn't be a stretch to have them handling the taxes, but finds it, ". . . a little bit ironic in saying the problem with Quill is that it benefited all these companies, so now we’re going to overturn Quill so that we can benefit the exact same companies.”
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: uncleleroy on April 26, 2018, 08:53:08 AM
". . . a little bit ironic in saying the problem with Quill is that it benefited all these companies, so now we’re going to overturn Quill so that we can benefit the exact same companies.”

That was probably the best line in the whole article. Couldn't have said it better myself.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: uncleleroy on April 26, 2018, 05:22:35 PM
Just read my newest issue of Strategic Finance and it had an article on the upcoming S. Dakota v Wayfair court case. Nothing new but it does provide a brief and concise review of the case and its origins.
Title: Re: Amazon Changes to Marketplace Tax Collections
Post by: Southern Jewel's Fab Finds on April 27, 2018, 07:34:10 AM
That was probably the best line in the whole article. Couldn't have said it better myself.

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