Previously if selling to US customers as a remote seller, fulfilling from out of state or out of country such as Amazon FBM (fulfillment by merchant), and had no physical presence such as inventory creating nexus in a state there was no sales tax responsibilities. Currently that landscape is changing as some states have passed laws and regulations that tax remote seller internet sales.
Even before the US Supreme Court handed down its decision on South Dakota v. Wayfair some states had enacted new laws and regulations with the intent of leveling the tax playing field between marketplace sellers (internet sales) and brick and mortar stores. Currently there are nine states that have enacted Marketplace Facilitator legislation. “Marketplace Facilitator legislation is a set of laws that shifts the sales tax collection and remittance obligations from a third party seller to the marketplace facilitator” such as Amazon, Ebay etc. Other states are addressing remote sellers that do not have physical nexus by enacting laws and regulations that tax sales with minimum dollar thresholds and or minimum transaction thresholds. We can help you identify these states as they come aboard so you don’t have to. We keep track of these thresholds so you can be on top of your business and not wasting valuable time on sales tax compliance.
Alternatively shipping product to a US warehouse for fulfillment from that warehouse, such as Amazon FBA (fulfillment by Amazon), nexus is established through the storage of your inventory in that state and US Sales Tax needs to be charged collected and remitted as required.
A foreign or domestic entity using FBA in the US is usually subject to US Sales Tax on its sales of product to the customer. Initially FBA has you ship your product to an Amazon warehouse. Your inventory stored in an Amazon warehouse creates what is called nexus (physical presence) here in the US and in particular only that State. When nexus exists and you make retail sales (ecommerce to customers) you are required by State Tax law to register for Sales Tax, charge and collect the Sales Tax from that State's customers only. If you only have one warehouse location you would need to only register for that State's Sales Tax and only charge those State's customers. If you sell and deliver to another State no sales tax would need to be charged as long as thresholds are not met in those other states. As Amazon moves inventory around into other warehouses you will need to register for sales tax in those other states.
ASALT Group provides registration service, return preparation, and electronically filed returns and payments (which most jurisdictions require). We use your monthly report from Amazon Seller Central to prepare and process your sales tax liability. We also handle all the phone calls and notices from the jurisdictions on your behalf as well.
Once you have obtained a sales tax registration (there can be some State fees for registration ranging from $10 - $150 but only a handful of States) from the state the number gets entered into the Amazon Seller Central "Settings" area and toggle on taxable. Once the registration number is accepted by Amazon, Amazon will start charging the correct tax on each sale and at month’s end turn that money over to you for remitting to the proper jurisdiction. ASALT Group takes your sales report, uploads it into our software and prepares the returns for your approval. Once approved and the tax dollars are sent by you to our bank we file the returns and make the payments on your behalf.
We also use the monthly sales report to determine if your inventory is in a new location by reviewing the "fulfillment_center_id" column in the report. This column has an abbreviation code which translates to a specific warehouse location. This column will tell you (30 days in arrears) where your inventory was shipped from which as we mentioned earlier can establish sales tax nexus.
A foreign entity can do business in the US without the establishment of a US entity but an EIN (Employment Identification Number) is needed for the sales tax registration application with the states. Once you have the EIN ASALT Group will be able to register you for sales tax in the appropriate states and begin the proper charging, collecting and remitting of the tax going forward.