If you’ve been an Amazon FBA business owner for any amount of time, you’ve thought about dealing with sales tax charged on the products you sell. Sales tax can be a confusing topic, and you should definitely seek the advice of a professional tax advisor to tell you how you should handle sales tax for your business.
Since time spent thinking about sales tax is time not spent thinking about your FBA business, having Amazon step in to handle sales tax in additional states makes our lives as FBA sellers a little easier.
On September 18th, Amazon announced they would begin handling sales tax for ten additional states starting October 1st:
- Arizona
- California
- Colorado
- Maine
- Maryland
- Massachusetts
- Nevada
- North Dakota
- Texas
- Utah
The two most interesting states on the list are California and Texas, as they are the two largest states by population (see this Wikipedia page for a state by state breakdown of population). Having these two states being handled by Amazon means a relatively large portion of your sales taxable-orders are no longer something you have to deal with after October 1st.
Adding these ten states brings the total count of states that Amazon handles sales tax for to thirty three, plus the District of Columbia.
I created a table showing the states where Amazon handles sales tax, the effective dates of Amazon’s involvement, and the population of each state. Notice the large populations of California and Texas relative to the other states in the list.
Amazon Sales Tax Collection Table
There are five states that don’t have sales tax:
- Alaska
- Delaware
- Montana
- New Hampshire
- Oregon
Which leaves twelve states that Amazon doesn’t handle sales tax for:
- Florida
- Georgia
- Hawaii
- Illinois
- Kansas
- Louisiana
- Michigan
- Missouri
- Mississippi
- North Carolina
- Tennessee
- Wisconsin
Hopefully these twelve remaining states will also come under Amazon’s purview, so we as sellers won’t have to determine our sales tax obligations in any state. This will allow us all a little more time to focus on our businesses, which is a change I think most sellers would appreciate!