Independent Sellers on Amazon Marketplace Are Facing a Deadline for Sales Tax Amnesty

Think back to when your parent or teacher would let you off easy if you admitted your indiscretion and promised never to do it again. That's the deal sitting on the table right now for thousands of digital merchants who owe sales taxes in several states.Amazon Marketplace sellers have a chance to clean the slate on accruing sales taxes liabilities under a multi-state amnesty program that expires on Oct. 17.Third-party sellers -- the digital era's mom and pop merchants and manufacturers that help Amazon become the "everything store" -- are about to face state auditors. Their success makes them more than incidental revenue sources. Merchants whose products were fulfilled by Amazon shipped 2 billion items last year. Their ranks who hit annual sales of $100,000 last year grew by 30 percent, according to Amazon.Texas alone may be missing out of more than $320 million a year in state sales taxes due under existing laws from third-party sellers on Amazon Marketplace, according to expert estimates. And a lawsuit in Massachusetts threatens to expose the identities of sellers that don't always use their names and disguise their businesses to sell general merchandise on Amazon Marketplace. Other states auditors will likely try to get the list too. Texas is one of 24 states plus Washington D.C. that have agreed to forgo past sales taxes not collected by Amazon Marketplace sellers who come forward and would then agree to start collecting sales taxes from their customers on Dec. 1. The Multistate Tax Commission's amnesty offer started in August and ends next week.Once a seller's merchandise is stored and processed from an Amazon fulfillment center, then the seller is required under several states' existing laws including Texas to charge its customers sales tax. Now that Amazon has fulfillment and sorting facilities in more than 20 states, thousands of merchants are liable to sales taxes.Texas has had its own online marketplace seller voluntary disclosure initiative for some time, said Lauren Willis, a spokeswoman for the Texas Comptroller's Office. Texas is also participated through the Multistate Tax Commission because it will produce sellers it doesn't know about, get them registered, collecting and reporting state taxes going forward, she said.But sellers that the state has already identified and who owe Texas sales taxes don't qualify for the amnesty program, Willis said. So it's better to come forward now, experts say.  Continue reading...

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