Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Sales Tax Bootcamp for Amazon FBA Sellers

Learn the basics of sales tax collection and remittance for Amazon FBA sellers from industry expert Mark Faggiano of TaxJar. This webinar will take the mystery out of a complex topic with serious financial implications for your FBA business.

Mark will cover when FBA sellers must collect sales tax, how to determine how much sales tax to collect, and what changes if the current federal sales tax legislation passes.

After “Sales Tax Bootcamp,” you will be armed with the tools and resources to take charge of this complicated part of your FBA business.

Related Books

Free with a 30 day trial from Scribd

See all

Sales Tax Bootcamp for Amazon FBA Sellers

  1. 1. with MARK FAGGIANO CEO OF % % % % % %% % SALES TAX BOOT CAMP FOR FBA SELLERS Your Guide to Getting Sales Tax Compliant
  2. 2. GOALS • Cover some tax basics • Connect sales tax relates to Amazon • Share next steps • Resources for help in the future • Questions!! (use the chat section to the left) Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 2
  3. 3. QUICK INTRO: • Passion: using tech to solve problems for small business! • Founded TaxJar in 2013 • Not a CPA or tax professional • Talked to thousands of online sellers, pros, auditors, states • Here to help you make informed decisions Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 3
  4. 4. WHO I TALK WITH EVERY DAY • People making a living online • Multi-channel FBA sellers • Want to be educated • Trying to determine where they have nexus • Sales tax is being collected in different accounts • Filing returns is a frustrating, waste of time Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 4
  5. 5. ” “ “I want sales tax to go away!” 3/2/16Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 5 – Average TaxJar Customer
  6. 6. SALES TAX BASICS Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 6
  7. 7. CHAOS PREVAILS • No federal laws or governing body (yet) • 45 states (and DC) = 46 sets of laws • Nexus • Taxability • Rates • Due dates Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 7
  8. 8. 8
  9. 9. WHAT’S TAXABLE? • Tangible items are taxable • Common exceptions are clothing and food • Services are mostly not taxable • Are the tides changing? • Shipping, gift wrapping can be taxable Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 9
  10. 10. PASS-THROUGH TAX • Pay what you collect • Never pay out of pocket! • Sellers are ‘collection agents’ Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 16
  11. 11. Sales Tax Can Be Automated Starting is the hardest part Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 17
  12. 12. WHAT THE HECK IS NEXUS? Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 18
  13. 13. NEXUS IS WHEN/WHY YOU CARE Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 19 A presence / connection in a state that’s significant enough for you to be required to comply with their sales tax law
  14. 14. 3/2/16Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 27
  15. 15. IT’S NOT OVER YET • Fulfillment is a differentiator • Amazon is investing in infrastructure • Passage of federal & state legislation will accelerate growth of fulfillment centers Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 28
  16. 16. WHEN SHOULD I COLLECT SALES TAX? Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 29
  17. 17. GOLDEN RULE OF COLLECTION Collect sales tax when the item sold is shipped to a state where you have nexus Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 30
  18. 18. MEET JOE SELLER • Based in Akron, OH • Only has nexus in OH • Complying in 1 state
  19. 19. Akron, OH Lakewood, OH Collect sales tax NEXUS SALE
  20. 20. Collect sales tax REMOTE SALE 3/2/16Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. Waltham, MAAkron, OH
  21. 21. JOE’S BUSINESS IS GROWING! • Using a 3rd party fulfillment service • Inventory stored in NV • Nexus in OH and NV • Complying in both states 3/2/16
  22. 22. Collect sales tax NEXUS SALE OH or NV OH or NV
  23. 23. Collect sales tax REMOTE SALE OH or NV Stockport, IA
  24. 24. JOE’S USING FBA • AMZN storing his inventory in 5 states • Nexus in 6 states • Complying in all 6 states
  25. 25. Collect sales tax NEXUS SALE 3/2/16Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. OH, NV, CA, AZ, PA, INOH, NV, CA, AZ, PA, IN REMOTE SALE
  26. 26. Collect sales tax REMOTE SALE 3/2/16Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. ANY REMOTE STATEOH, NV, CA, AZ, PA, IN
  27. 27. Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. HOW MUCH SALES TAX SHOULD I COLLECT? Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 40
  28. 28. COLLECTION LOGIC: SOURCING • State where item is shipped determines tax rate • Tax rate usually = sum of applicable rates • State • Local • Other (i.e., education, transportation) Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 41
  29. 29. ORIGIN VS. DESTINATION SOURCING • Origin-based state • Tax rate = seller’s location • One rate for entire state • Destination-based state • Tax rate = where item is shipped • Variable rate Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 42
  30. 30. 43
  31. 31. 44
  32. 32. Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc.Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 45 SELLING ON AMAZON & SALES TAX
  33. 33. GOOD NEWS • Focus on nexus. Amazon will collect sales tax for you! • Tax Collection Service in Seller Central • Product tax codes • Local taxes • Cost is 2.9% of tax collected • If you collect $10 in sales tax, the fee will be $0.29 Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 46
  34. 34. BAD NEWS • YOU have to enable collection in Seller Central • Amazon will NOT tell sellers • How to collect in FBA states (TaxJar will) • Where to collect (TaxJar will) • Easy to collect ‘wrong’ • Collecting only state tax in a destination-based state Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 47
  35. 35. FBASALESTAX.COM Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 48 FREE ebook that includes the collection settings for every state
  36. 36. Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 49 FILING RETURNS Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc.
  37. 37. HOW OFTEN DO I FILE? ● Filing deadlines usually tied to sales volume • The more you collect, the more often you pay ● Frequencies: annual, semi-annual, quarterly, monthly ● Deadlines typically fall on 15-30th of the month Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 50
  38. 38. FILING TO THE STATES • Combine and file a single return per state • Not separate returns per channel • File zero returns! • When you’ve collected $0 in sales tax Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 51
  39. 39. PAY ON TIME = $$ Some states have discounts for on-time payment • Generally between 1-2% • It’s free money! Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 52
  40. 40. PAY MORE IF YOU’RE LATE All states have penalties for late payment • Booo! • Late payment charges • Interest on what wasn’t paid Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 53
  41. 41. FILING IN DESTINATION STATES • Huge pain! • States rely on you to divide up the money collected • Calculate taxable sales & sales tax collected by jurisdiction • Gets worse if you’re multi-channel Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 54
  42. 42. 55 CA SCHEDULE B
  43. 43. 3/2/16 56
  44. 44. HOW ARE YOU FEELING? Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 57
  45. 45. 3/2/16 58
  46. 46. WHAT DO I DO NOW? 3/2/16Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 59
  47. 47. Head-in-the-sand is not an option
  48. 48. Best effort > no effort
  49. 49. Don’t drain your resources trying to comply
  50. 50. HOW DO I GET STARTED? 3/2/16Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 63
  51. 51. STEP 1 • Comply in your home state • Register for a sales tax license • Enable sales tax collection • Pay and file Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 64
  52. 52. STEP 2 • Branch out to new states • Voluntary Disclosure of you have a history • TaxJar can help • Collect on all channels for your nexus states • Nexus on one channel means nexus for your entire business Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 65
  53. 53. Slide with expected report 66
  54. 54. WHO WILL KNOW? • The decision to comply is up to you • Risk tolerance is your guide • States are getting more desperate • eCommerce is growing • Legislation is looming Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 67
  55. 55. from calculations to reporting & filing Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 69 REGISTRATIONS & EDUCATION SMARTCALCS REPORTING AUTOFILE Painless sales tax compliance for online sellers,
  56. 56. Thousands of happy customers, including... Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 70
  57. 57. January 11, 2016Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 71 INTEGRATIONS
  58. 58. WHAT ARE YOUR SALES & TAXES COLLECTED BY STATE?
  59. 59. WHERE DO YOU HAVE NEXUS?
  60. 60. WHAT ARE YOUR SALES & TAXES COLLECTED BY STATE?
  61. 61. HOW MUCH SALES TAX DID YOU COLLECT BY JURISDICTION? 3/2/16Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 75
  62. 62. ARE YOU COLLECTING ACCURATELY?
  63. 63. • 30-day free trial (no credit card required) • Monthly or annual subscriptions • Pricing based on transaction volume • Starts at $19/month for 1k transactions • $19.95 per AutoFile return Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 78 Get Started…FOR FREE!
  64. 64. Helpful resources 79 youtube.com/taxjar For visual learners salestaxcommunity.com Talk with 5,000 other store owners and tax pros! blog.taxjar.com Content just for ecommerce & sales tax
  65. 65. CALL US! 855-800-6681 Copyright © 2016 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 80
  66. 66. 3/2/16Copyright © 2015 TaxJar. TaxJar is a trademark of TPS Unlimited, Inc. 81 WE LOVE QUESTIONS!

×