Tax Implications on Amazon Seller Fees: What You Need to Know
First things first: Amazon Seller fees aren’t increasing. You don’t need to worry about that. However, some states may now apply taxes to certain Seller fees. These could apply to various fees from inventory prep—like your bubble wrap, polybags, and labels—all the way to referral fees and Checkout by Amazon fees.
This can—and probably will—be a little confusing, because not all states will charge tax for these fees. Some states will charge tax for some of the fees, while other states may have entirely different requirements. It’s important to take a look at the fees that may be impacted and then verify with your own state, or where you do business, to make sure you have a full understanding of what taxes you’ll be expected to pay. We’ll do our best to break it down for you here.
Selling on Amazon fees that may or may not be taxed in your business location:
- Referral fees
- Subscription fees
- Variable closing fees
- Per-item fees
- Promotion and merchandising fees
- Refund commission fees
- Checkout by Amazon fees
- Sales tax collection fees
There may also be taxes associated with your Fulfillment By Amazon (FBA) fees, such as:
- Labeling fees
- Polybagging fees
- Bubble wrap fees
- Taping fees
- Opague bag fees
- Repackaging fees
These are taxes that you, the seller, will pay for Amazon’s services—but only in states where goods and services are charged a sales tax. Keep in mind that this could actually be two separate states, depending on where you and where Amazon does business. For instance, FBA prep fees may apply in a different state than your actual business location. This means, if your items are prepped for shipping in one state that charges sales tax, and you conduct business in another state that charges sales tax, you could be responsible for two separate taxes.
We can’t definitively tell you which states will charge these additional taxes, but a good indicator may be if the state in which you conduct business charges a sales tax. The taxes will begin on June 1, 2019, and Amazon will provide the information in your Payments Reports.
We’ll keep our eye on this situation and report anything further that we learn. For now, if you pay sales tax for goods and/or services in your state, expect to see tax charges on your next Payments Report.
If you have any more questions about how these taxes will affect your business and how to prepare for it, be sure to talk to us atPrivate Label University. Also, be sure to attend our live event in Denver, Colorado where we will give you the blueprint to success for YOUR business.
