The United States begins to reduce taxes for Amazon sellers! California takes the lead

CDTFA (California Tax and Fee Administration) once caused a stir in our seller circle. Many sellers should still remember that in October last year, CDTFA asked Amazon to provide sellers' tax information.

Many media outlets misunderstood this action as a signal that California would begin to impose taxes on e-commerce sellers, but the rumor was eventually dispelled. This letter was only collecting tax information from Amazon sellers, and Chinese sellers would not be affected.

The matter finally ended like this, but recently CDTFA once again issued a new announcement targeting Amazon sellers. This time, it was no longer conveyed by Amazon to the sellers, but was sent directly by the tax bureau to the seller’s registered email address.

What is the purpose of CDTFA this time?

Last time, we communicated with Amazon but did not actually collect taxes. Is CDTFA preparing to collect taxes again this time? Let’s first take a look at the content of the email notifying sellers.

The content is quite long, so I will just summarize the key points and briefly talk about them with you.

The main content of this notice is that "California will give tax exemptions to all sellers who use California FBA warehouses." However, Amazon's third-party sellers currently have no tax obligations in California. What impact will this policy have?

We just reported two days ago that Amazon began to automatically calculate and collect sales taxes in seven states.

That’s right, this exemption in California can be used for sales tax. Although California has not yet officially launched the collection of sales tax from e-commerce sellers, according to relevant sources, California will begin to collect sales tax from Amazon sellers this year.

Amazon will also calculate and collect the sales tax levied in California. The question is, as an agent, can Amazon enjoy this exemption policy for these automatically collected sales taxes?

Now CDTFA requires that you register your tax information to enjoy tax exemptions, but Amazon cannot turn off the automatic collection of consumption tax. Sellers who want to enjoy tax exemptions must register their own tax accounts and contact the tax bureau for tax refunds, which is very troublesome.

The actual policy of California's sales tax will still depend on the next actions of CDTFA. Sellers with large sales in California just need to keep an eye on it.

There is a little more in the email...