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Legal & Tax
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5
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How do I register sales tax on Amazon?

Need to register for a sales tax permit in more than one state? We've collected all the information you need in one place, right here.

David Zaleski

November 14, 2021

Taxes are a pain for everyone - especially for small businesses and entrepreneurs. If you’re struggling to understand how to get started with sales taxes as an FBA seller. Those who are not that much familiar with FBA program for their information, with Fulfillment by Amazon FBA, you store your products in Amazon's fulfillment centers, and we pick, pack, ship, and provide customer service for these products. FBA can help you scale your business and reach more customers. Here’s our simple guide on Sales Tax Permit As An Amazon FBA Seller.

Source: Giphy


Why Do I Need To Register For A Sales Tax Permit?

Amazon sellers do not always need to register for a sales tax permit - it entirely depends on whether you have achieved sales tax nexus with a given state or not. If you have, you must collect sales tax and remit them on sales made in that state. Before you are able to do so, you must register for a permit with that state - without this permit, collecting sales tax is illegal. 

In short, you likely have nexus with the state(s) you live/work on your Amazon business in, house inventory in (you’ll have to check your Amazon account for this info), and/or meet a state’s sales minimum (this can either be a financial amount or quantity of sales) that occur within their state. 

For most states, even if you have achieved nexus, Amazon is the party responsible for collecting and paying those taxes. Nevertheless, you are still responsible for registering for a permit with every state to whom you owe sales tax, and filing those taxes as per the state’s schedule. Unfortunately, every state has different requirements and processes for this. However, with a little bit of help and hard work, it can be done!

What Do I Need To Register?

Regardless of what state you are looking to register with, there are a few essential items you need to obtain your sales tax permit across the board.

  • Official Business Information. This includes your EIN (Federal Tax ID), documentation of your formal business structure, business address, and potentially your Articles of Incorporation/Certificate of Trade Name.
  • Personal Information. You may need your driver’s license, passport, the business owner’s contact information and place of residence, and your social security number. You will also need this information for all partners, proprietors, or principal officers of the business.
  • Previous Business Information. If you purchased this business or are changing an old one, you’ll need previous business details.
  • North American Industry Classification System Number.
  • Tax and Income Information. Estimated tax liability/gross sales in the state, the date in which you began sales in that state, and all the locations that will be collecting sales tax.

Note: If you’re registering from out of the country, you still need an FEIN. You may have trouble applying online without a social security number, but will generally be able to apply via mail without it, no problem. Maryland is the only state that requires yourself or a responsible party with either a social security number or ITIN to apply.

Chart of all states (and Puerto Rico and DC) along with their proper tax registration link and charge associated with the registration process.
Chart of all states (and Puerto Rico and DC) along with their proper tax registration link and charge associated with the registration process.

The easiest way to handle this process is, of course, to hire a professional accountant to help you along the way. Or, use a streamlined tax registration form to register for multiple states at once.

Tax codes and state procedures may have changed since this article was written - so always check with the state’s official website and procedures. We aren’t accountants either - so if you’re looking for professional, legal financial advice, please be sure to find a trustworthy accountant or tax lawyer to help. Getting your taxes right as a business is critical to your scalability!

To learn more about other things like fulfillment by amazon fba, fulfillment fees, inventory performance index, long term storage fees, excess inventory, fba fees, free shipping etc, check our other blogs.

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David Zaleski

David Zaleski is an entrepreneur, Amazon seller, and the founder of EcomHub. He's been operating in the eCommerce space since the age of 14 years old. At the age of 18, he started his own Amazon business with just $4,800 in start-up capital.

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