Items sold on Amazon and shipped to locations inside the U.S. via Fulfillment by Amazon (FBA) is often subject to state sales tax. The amount of tax charged on your order depends on many factors, including the identity of the seller, the type of item or service purchased, the time and location of fulfillment, and the shipment or delivery address of your order. While brands that sell on Amazon should always consult a tax professional when calculating their sales tax obligations, Channel Key has a valuable tip that can both simplify and expedite this process.
To understand how state sales tax applies to Amazon FBA sellers, it is necessary to review how your products reach customers. When a shopper completes a purchase, a chain of events occurs within Amazon’s network of fulfillment centers. This involves a variety of building types that are located all over the country, including:
- Sortable Fulfillment Centers
Around 800,000 square feet in size, sortable fulfillment centers can employ more than 1,500 full-time associates. In these buildings, Amazon employees often work alongside robots to pick, pack, and ship customer orders such as books, toys, and housewares.
- Non-sortable Fulfillment Centers
Ranging in size from 600,000 to 1 million square feet, non-sortable fulfillment centers employ more than 1,000 full-time associates. In these centers, associates pick, pack, and ship bulky or larger-sized customer items such as patio furniture, outdoor equipment, or rugs.
- Sortation Centers
At sortation centers, associates sort customer orders by their final destination and consolidate them onto trucks for delivery.
- Receiving Centers
Amazon’s receiving centers support customer fulfillment by processing large orders of inventory that are expected to sell quickly and then allocating it to fulfillment centers within the network.
- Specialty Centers
Amazon’s fulfillment network is also supported by additional types of buildings that handle specific categories of items or are pressed into service at peak times of the year, such as the holiday season.
Knowing where your Amazon inventory is located is helpful when determining your state sales tax obligations. According to Amazon, 44 states (including D.C.) have passed legislation that transfers the tax responsibility from sellers to Amazon. In these states, Amazon collects and pays the sales tax you owe for each product sold so you don’t have to worry about it. In fact, since four states do not have sales tax, there are only three states in which sellers are required to collect and remit their own sales tax: Florida, Kansas, and Missouri.
It’s important to note that storing your inventory in fulfillment centers located in these states may also affect your sales obligations. Unfortunately, Amazon only provides the identification code for each fulfillment center that stores your inventory. Finding the precise location of these buildings is more difficult. For your convenience, below is the complete list of locations for Amazon fulfillment centers in North America. With this information, you can simply match the fulfillment center code in your Seller Central account with its corresponding address. This will make it easier to determine where you may owe state sales tax. You can download the full list here:
North American Amazon Fulfillment Center Address List
This information is also available in Vendor Central by clicking Support > Resource Center > Technical > and searching for “Amazon North America Fulfillment Center Address List.” Note: you will need a Vendor Central account to access this information. More information about Amazon’s sales tax collection policies can be found in the Seller Central link below.
NOTE: Channel Key is not a Certified Public Accountant nor tax advisor. The views listed here should not be taken as tax advice. For all tax matters, please contact your CPA.
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