Amazon backend update! These US orders will also be taxed!

The US Amazon backend has updated the latest sales tax changes! 11 new regions have been added that require Amazon to collect sales tax on your behalf!

The 11 regions are Arkansas, Indiana, Kentucky, Louisiana, Mississippi, New Mexico, Ohio, Puerto Rico, Rhode Island, Virginia, West Virginia, and Wyoming.

Including the 32 regions that have already started to collect sales tax, there are now 43 states in the United States that require Amazon to collect sales tax on their behalf, and only 7 states are temporarily exempt from paying sales tax. In total , nearly 90% of states have to collect sales tax on their behalf, and this cost has almost completely covered the operations of sellers on the US site.

Some sellers who are not familiar with costs may not be aware of this tax, because Amazon directly calculates and pays it on their behalf, and does not remind them of any orders that generate taxes. Sellers can only see it when they click on the specific order details or in the date range report . Many sellers only discovered this deduction item when they used the range report to calculate profits.

When you see the taxation mode as "Mall Service Provider" and the taxation responsible party is "Amazon Service" in the order details or transaction details, it means that Amazon has automatically deducted sales tax for this order. (For specific sales tax rates in each state, you can add me to get the tax map: zyqmda) However, not all orders sent to taxable states are subject to tax. I will review the collection conditions of US consumption tax with you.

Only orders that meet the tax conditions will be automatically calculated and taxed by Amazon. The tax conditions vary from state to state, but they can basically be divided into the following three situations.

1. Click-through Nexus

For example, if I hired a website or agency in that state to help me with traffic and promotion, and sold to customers in that state, this would constitute a connection. All these sales orders need to pay taxes.

2.Virtual and Economic Nexus

This is known as remote sales connection. If sales to the state exceed the specified amount or unit volume threshold, sales tax must be paid.

3. Dropship Nexus

Purchasing goods from wholesalers in the state and having them ship on your behalf also constitutes a nexus and requires the payment of tax.

The way Amazon sellers usually generate taxes is through remote sales. The detailed sales thresholds vary from state to state. I will give you two examples.

Taking the District of Columbia and Nevada as examples, the policies of these two states stipulate that if the cumulative sales amount to the region exceeds US$100,000 or 200 orders each year, sales tax must be paid.

The sales tax rate varies from state to state, ranging from 6-8%. Sellers who need a detailed tax map can scan the QR code at the end of the article and send me a private message to get it. Amazon automatically calculates and collects taxes, which brings up a problem. If the seller already has other physical connections in the taxable state (for example, the company is registered in this state) and has paid sales tax in this state through a tax consultant, Amazon's mandatory tax deduction operation will cause the seller to pay taxes again.

Last year, relevant sources revealed that it was expected that all states in the United States would establish comprehensive e-commerce sales tax laws in 2020. However, due to the sudden change of the epidemic at the beginning of the year, various policies were postponed. Now the compliance of consumption tax has been put on the agenda again. It is estimated that before the middle of next year, the remaining seven states will also join the ranks of automatically collecting consumption tax.