Sales Tax Amnesty for Online Sellers

August 4, 2017

Contact Tom Mazurek to learn more -
Phone: 716.276.8286
tmazurek@tsacpa.com
@TronconiSegarra on Twitter 

The Multistate Tax Commission has announced a sales tax amnesty program targeted to online sellers who use services such as Fulfillment by Amazon (FBA) to sell their products.

This program is being offered for only a limited time - August 17, 2017 to October 17, 2017.

This is a full amnesty program, meaning no lookback period and no remittance of tax, interest, or penalties for prior liabilities. The online seller will agree to start collecting sales tax on December 1, 2017.

Under the FBA program, online sellers send inventory to Amazon, who in turn handle all the transaction processing, payment, shipping etc. Amazon can move this inventory to different fulfillment centers across 30 states, thus creating sales tax nexus for the online seller in these jurisdictions. It is important to note that inventory typically creates physical presence (nexus) in a state even if the inventory is stored in a third-party warehouse.   

Fifteen states have already agreed to participate in this amnesty program, and another eight are considering it. The states currently in the program are:

Alabama
Arkansas
Colorado
Connecticut
Idaho
Iowa
Kansas
Kentucky
Louisiana
Nebraska
New Jersey
Oklahoma
Texas
Utah
Vermont

There are some significant states included on this list where online sellers generally generate a good amount of sales. Plus, there are other states that recently passed sales tax legislation intended to draw in online sellers who are not currently collecting should the current physical presence nexus standard change. Online sellers may also have income/franchise tax liabilities due to the presence of inventory in a state. This program should be able to resolve those issues as well.  

Contact Tom Mazurek, CPA, Principal at Tronconi Segarra & Associates for assistance in assessing your need or eligibility for this amnesty program.

 

 

 

 


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