Author Topic: Important changes to Seller Fee Taxability on Amazon.com  (Read 584 times)

0 Members and 1 Guest are viewing this topic.

Southern Jewel's Fab Finds

  • Administrator
  • Master Motivator
  • *****
  • Offline Offline
  • Posts: 17558
  • Southern Jewel's Fab Finds
    • Pinterest
    • View Profile
    • Southern Jewel's Fab Finds
Important changes to Seller Fee Taxability on Amazon.com
« on: April 11, 2019, 09:58:16 AM »
Important changes to Seller Fee Taxability on Amazon.com 4-11-2019

Dear Seller,

We are reaching out regarding the possible tax implications on some seller fees beginning June 1, 2019.

Some states consider specific Selling on Amazon fees such as per item, order, and refund fees as a taxable electronic service. Similarly, some states consider FBA inventory prep fees such as bubble wrap, polybag, taping and labels as taxable. Seller fees is not increasing however; you might see tax applied to some seller fees.

For more information regarding this change, refer to the FAQ below:

- What fees are taxable?

Selling on Amazon fees (based on your business location):
•       Referral Fee
•       Subscription Fee
•       Variable Closing Fee
•       Per-item Fee
•       Promotion & Merchandising Fee
•       Refund commission Fee
•       Checkout by Amazon
•       Sales Tax Collection Fee

FBA service fees (based on order fulfillment center):
•       Labeling Fee
•       Polybagging Fee
•       Bubble wrap Fee
•       Taping Fee
•       Opaque Bagging Fee
•       Repackaging Fee

The above list is some common seller fees. For a complete list of seller fees, refer to the following Help pages:
Selling on Amazon Fee Schedule: https://sellercentral.amazon.com/gp/help/200336920
FBA features, services, and fees: https://sellercentral.amazon.com/gp/help/G201074400

- How will tax be calculated on my seller fees?
For Fulfillment services, the fulfillment center performing the taxable service will determine the tax rate.
For Selling on Amazon fees, the location of your business in a taxable state will determine the tax rate calculated.

- When does this begin and where can I see any tax collected on my seller fees?
Beginning June 1, 2019, Amazon will start collecting sales tax on taxable seller fees. Tax collected will reflect with the order fee on the transaction details of your Payments Reports. Date range payment reports will continue to reflect the sum of fees per order.

- Can I opt out of using FBA fulfillment services that may be taxable?
FBA services are performed on your items when you elect to purchase these services from Amazon or when the packaging and prep requirements are not met.
To manage your FBA settings and minimize FBA service fees by prepping your items before sending to an Amazon fulfillment center, visit Fulfillment by Amazon settings at https://sellercentral.amazon.com/gp/ssof/configuration/index.html/ref=xx_fbasettings_dnav_xx.
To learn more about packaging and prep requirements, refer to the Help page available at https://sellercentral.amazon.com/gp/help/200141500.

For more information on Amazon fees, please visit the Selling on Amazon Fee Schedule at https://sellercentral.amazon.com/gp/help/200336920.

Regards,

Amazon Seller Services



Southern Jewel's Fab Finds

  • Administrator
  • Master Motivator
  • *****
  • Offline Offline
  • Posts: 17558
  • Southern Jewel's Fab Finds
    • Pinterest
    • View Profile
    • Southern Jewel's Fab Finds
Re: Important changes to Seller Fee Taxability on Amazon.com
« Reply #1 on: April 11, 2019, 10:16:18 AM »
From Reddit

So if I’m reading this correctly, referral fees are the biggest item in the list is referral fees. If you have standard 15% then with sales tax (assuming avg 6%), it’s 15.9%. Plus the other increases... I don’t like losing 1% of my net. <----not from me. I'm quoting a poster from the sub-reddit.

WayOutWest

  • Administrator
  • Master Motivator
  • *****
  • Offline Offline
  • Posts: 8664
    • A3PDNI0CMSQZ2N
    • View Profile
    • WayOutWestUSA.com - Landstrom's Black Hills Gold Jewelry
Re: Important changes to Seller Fee Taxability on Amazon.com
« Reply #2 on: April 15, 2019, 04:30:06 AM »
Oklahoma doesn't have sales tax on services, so I *might* not be hit by it.  We have tax on tangible goods, so Amazon *might* decide that FBA prep qualifies.  Under Okla law it's supposed to depend on if the fees for the supplies (such as the cost of the poly bag and cost of sticker) are separated out from the labor portion of fee or not, but it really comes down to Amazon's interpretation of it.  :/

A few years back our state legislators *almost* passed a bill that would have taxed services, but there was so much backlash they backed off at the last minute.  It would have meant sales tax on basically everything: haircuts, accounting services, doctor visits, surgeries, etc.  Smh

Hope nobody else here is affected by it.
« Last Edit: April 15, 2019, 04:33:44 AM by WayOutWest »

Southern Jewel's Fab Finds

  • Administrator
  • Master Motivator
  • *****
  • Offline Offline
  • Posts: 17558
  • Southern Jewel's Fab Finds
    • Pinterest
    • View Profile
    • Southern Jewel's Fab Finds
Re: Important changes to Seller Fee Taxability on Amazon.com
« Reply #3 on: April 16, 2019, 07:52:05 PM »
Accountant finished my taxes yesterday in middle of day.
So far, I'm good.
Received another email from Amazon today regarding their last email about fees.
<sigh>
Will come back tomorrow and post it.
Heading offline for the day!

WayOutWest

  • Administrator
  • Master Motivator
  • *****
  • Offline Offline
  • Posts: 8664
    • A3PDNI0CMSQZ2N
    • View Profile
    • WayOutWestUSA.com - Landstrom's Black Hills Gold Jewelry
Re: Important changes to Seller Fee Taxability on Amazon.com
« Reply #4 on: April 17, 2019, 05:14:06 AM »
Amazon sent out a follow up email that lists which states they'll be collecting tax on the selling fees and fba fees.  From the email:

• Amazon is required to collect taxes on Selling on Amazon fees in Connecticut, the District of Columbia, Hawaii, South Dakota or West Virginia, based on each state’s tax rates. Selling on Amazon Fees include the Referral Fee, Subscription Fee, Variable Closing Fee, Per-item Fee, Promotion & Merchandising Fee, Refund Commission Fee, Checkout by Amazon, and Sales Tax Collection Fee. For example, if your business is located in West Virginia, and your sales tax rate is 6.39%, and you sell an item with a total price of $20, which is subject to a 15% referral fee, we will collect and remit a sales tax of $0.19 to comply with state laws (calculated as 6.39% of the referral fee amount of $3.00). If your business is located outside Connecticut, the District of Columbia, Hawaii, South Dakota or West Virginia, we will not collect sales tax on the Selling on Amazon fee you pay.

• Amazon is required to collect taxes on FBA Prep Services in Arizona, Connecticut, Illinois or West Virginia, based on each state’s tax rates. FBA inventory prep fees include the Labelling Fee, Polybagging Fee, Bubblewrap Fee, Taping Fee, and Opaque Bagging Fee. For example, if you decide to use FBA Prep Service to bubble wrap your products, and the service is performed at a fulfillment center in Arizona, and the sales tax rate at that location is 8.37%, and the bubble wrap fee is $0.80/unit, we will collect and remit a sales tax of $0.07 to comply with state laws (calculated as 8.37% of the bubble wrap fee amount of $0.80/unit). If the service is performed at a fulfillment center outside Arizona, Connecticut, Illinois or West Virginia, we will not collect sales tax on the FBA Inventory Prep fees you pay.

Southern Jewel's Fab Finds

  • Administrator
  • Master Motivator
  • *****
  • Offline Offline
  • Posts: 17558
  • Southern Jewel's Fab Finds
    • Pinterest
    • View Profile
    • Southern Jewel's Fab Finds
Re: Important changes to Seller Fee Taxability on Amazon.com
« Reply #5 on: April 17, 2019, 10:03:43 AM »
Thanks for posting, Steve.

uncleleroy

  • Advanced Seller
  • Champion Counselor
  • ****
  • Offline Offline
  • Posts: 804
    • View Profile
Re: Important changes to Seller Fee Taxability on Amazon.com
« Reply #6 on: April 20, 2019, 02:40:55 AM »
Just another way for states to milk every last penny out of everybody they can from any source they can possibly imagine.

Southern Jewel's Fab Finds

  • Administrator
  • Master Motivator
  • *****
  • Offline Offline
  • Posts: 17558
  • Southern Jewel's Fab Finds
    • Pinterest
    • View Profile
    • Southern Jewel's Fab Finds
Re: Important changes to Seller Fee Taxability on Amazon.com
« Reply #7 on: April 20, 2019, 12:55:39 PM »
Yep.

  

Share me

Digg  Facebook  SlashDot  Delicious  Technorati  Twitter  Google  Yahoo
Smf