Amazon has announced they are adding Pennsylvania as a state for which they will start collecting sales tax on behalf of Amazon third-party marketplace sellers.
This new collection policy will start on April 1, 2018, but sellers will not have to do anything to comply.
This policy change follows a new law the state has enacted which is similar to the Washington State law and makes marketplace facilitators with a physical presence responsible for sales tax collection.
Amazon maintains an FAQ about this process here. But below is the current version as of today:
For orders shipped to customers in all other states, sellers are responsible for their tax obligations. If you use Amazon’s Tax Calculation Service, we will follow your existing tax calculation service settings for states where marketplace tax collection is not automatic. For more information about Amazon’s tax calculation services, see Tax Calculation Services Terms.
Do I need to do anything?
No action is required in your tax calculation service for states where Amazon automatically calculates, collects, and remits sales tax. Consider consulting a tax advisor for specific information relating to your business.
Does Amazon charge for the automatic calculation, collection, and remittance of sales tax?
No, Amazon does not charge any fees for the automatic calculation, collection, and remittance of sales tax. If you use Amazon’s Tax Calculation Service for states where tax collection is not automatic, we will follow your existing tax calculation settings and continue to charge you the applicable fees associated with the service.
Can I edit my tax calculation settings for a state if Amazon automatically calculates, collects, and remits sales tax?
There is no need to update your settings where we automatically calculate, collect, and remit sales tax. For states where Amazon does not automatically collect sales tax, we will use your tax calculation settings.
Can I opt out of automatic tax collection?
No, there currently is no option to opt-out.
Can I prevent Amazon from shipping to states where tax collection is automatic?
No, there currently is no option to restrict sales to specific states for tax reasons.
Sales Tax Collection Trend to Continue?
While the U.S. Supreme Court will weigh on this matter sometime this year, Amazon appears to be realizing these specific facilitator laws likely will survive and is cooperating with states.
Unless there is a significant push-back from the U.S. Supreme Court that potentially makes the facilitator laws unconstitutional, Amazon sellers should expect more states enacting marketplace facilitator sales tax collection laws.
Why nothing from eBay? As the laws stand today, they are only enforceable if the marketplace has a physical location in the state. Here is the wording from the state of Pennsylvania.
“When a marketplace seller uses a marketplace facilitator that maintains a place of business in Pennsylvania, the marketplace facilitator must collect sales tax on behalf of the marketplace seller.”
At the moment, eBay only has offices in California, Texas and Utah. Therefore, unless those states enact similar laws, eBay sellers are not impacted by the laws in Washington State and Pennsylvania.
However, this may change depending on the outcome of the Supreme Court case this year on Sales Tax collection.
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