It doesn’t matter whether you are an e-commerce seller or the owner of a physical store, sales tax will always remain an essential part of your business. And Amazon FBA is not an exception! So, if you are an Amazon FBA seller, then keep reading this blog. Why? Because you will learn how to handle the entire process of both collecting and filing sales taxes. If you are an FBA seller, then we recommend that you read this blog concerning taxes on FBA.
As a rule, every FBA seller wants to know in which states he or she is required to collect sales tax. Read this blog, and you will learn more about sales tax in various states.
As an FBA seller, you can collect sales tax if you meet following criteria:
- You have a tax nexus and a physical presence in a certain state.
- The product that you sell through FBA is subject to sales tax.
One of the main steps that you have to implement as an FBA seller, is report the amount of sales taxes collected by you from your customers, and file your tax returns accordingly.
How to Report Collected FBA Sales Tax:
Generally, the state where you run your FBA business wants to know the exact amount of sales tax that you have collected during the year from each county. Let’s try to understand how you can handle this process.
First of all, you should download a report from Amazon by logging into your Seller Central account, and then choose the necessary filing period. Here, you can also understand how much sales tax you have collected in every state, city and county. There is also another way: using sales tax automation. The main idea of this method is connecting to all your shopping carts and marketplaces, and providing an FBA seller with a comprehensive report concerning sales taxes. Additionally, sales tax automation will help you figure out how much sales tax you have collected from each area. Once you finished with this process, you can start filing your sales tax returns.
How to File Amazon FBA Sales Tax Returns?
There are several channels for filing your tax returns. Let’s meet the main methods:
One of the most popular and safe ways to file Amazon FBA sales tax is an online method. All you need to do is to login into your state’s taxing authority website, and upload your sales tax return. Additionally, you can make your payment through this website.
Via Sales Tax Software
This method allows you to file your sales tax automatically, and drastically save your time. However, this can be highly risk as the software can malfunction at any given time.
When it comes to filing your sales tax, you have to follow several important rules:
- Even if Amazon collects sales tax on your behalf, you have to file your sales tax returns in those states where you run your FBA business. That’s because there are a lot of states which require every seller who has an active sales tax permit to implement this option. Therefore, try to ensure that you report your tax return in due time in order to avoid any issues with the IRS.
- Additionally, you should file “zero returns”. If you are an FBA seller, you have to file a sales tax return even if you did not have sales during the taxable period. That’s because states require taxpayers to report sales taxes in due time.
Now that you know how to collect sales tax in states where you are running your FBA business, it’s time to find the best tax advisors who will help you fulfil this process. You can reach out to Prestige Auditors, and our team will help you understand the entire process of tax filing, and reporting your sales tax in due time. You can learn more about our company and services provided by our team through visiting our website. By working with our team, you can be sure that every aspect of your business concerning taxes goes smoothly.