Amazon brings third-party sellers into sales tax net in WA, other states may follow

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The Story:

In an announcement made this week via the Amazon sellers forum, the company said it would begin collecting sales tax for third-party sellers in Washington, its home state.

The new service, dubbed Marketplace Tax Collection, will automate the process for such products sold to customers in various states. Washington will be the first state where the new system will be implemented because it is the first to pass a law in this regard, and that law goes into effect on January 1, 2018.

This Happened:

Such taxation is a new playing field for Amazon. Until now, it has left third-party sellers to handle their own tax collection, only charging its customers sales tax on products it directly sells. Since those transactions are taxable only if the merchant has a physical presence in the state of the buyer, it’s Amazon’s fulfillment center footprint across the United States that has pretty much guided the system so far.

The state of Washington is now plugging that hole and mandating that all web sales be taxed. So, now, if a seller in another part of the country sells something to a Seattle customer, for example, Amazon will be handling all relevant collection and remittance of applicable sales tax, regardless of the seller’s or its own fulfillment center’s location.

We do expect other states to follow Washington’s precedence and create an additional revenue stream for themselves on the back of rapid e-commerce growth.

Source: CNBC

 

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