Amazon Sellers will be Charged Sales Tax on Fees Beginning in June

Update 4/16/19: Amazon has sent out an update (full e-mail below). Important links are as follows:

For a list of Frequently Asked Questions on this topic, refer to the following page: https://sellercentral.amazon.com/gp/help/GA65GGD8MR46A2WL.
For a complete list of seller fees, refer to the following Help pages:
- Selling on Amazon Fee Schedule: https://sellercentral.amazon.com/gp/help/G200336920
- FBA features, services, and fees: https://sellercentral.amazon.com/gp/help/G201074400

Original post: Amazon sent out an email to their sellers indicating that some of the fees involved in being an Amazon seller may need to be taxed, similar to how we pay sales tax an many services. Only some states consider this taxable, not all.

We are reaching out regarding the possible tax implications on some seller fees beginning June 1, 2019. Some states consider specific Selling on Amazon fees such as per item, order, and refund fees as a taxable electronic service. Similarly, some states consider FBA inventory prep fees such as bubble wrap, polybag, taping and labels as taxable. Seller fees is not increasing however; you might see tax applied to some seller fees.

– What fees are taxable?

Selling on Amazon fees (based on your business location):
• Referral Fee
• Subscription Fee
• Variable Closing Fee
• Per-item Fee
• Promotion & Merchandising Fee
• Refund commission Fee
• Checkout by Amazon
• Sales Tax Collection Fee

FBA service fees (based on order fulfillment center):
• Labeling Fee
• Polybagging Fee
• Bubble wrap Fee
• Taping Fee
• Opaque Bagging Fee
• Repackaging Fee

Depending on your main place of business, this could take away some of your margins. I wonder if there are legal ways to avoid this tax, e.g. by incorporating in another state, etc.

Hat tip to our friend Grant from Travelwithgrant

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