Sales tax and VAT software for Amazon sellers

Amazon publishes the list. Its Marketplace Tax Collection page names 46 states plus the District of Columbia and Puerto Rico, with an effective date against each one, running from Washington on January 1, 2018 to Missouri on January 1, 2023. Alaska is in that count because its local jurisdictions enforce collection through the Alaska Remote Seller Sales Tax Commission, since Alaska levies no state tax of its own. The four states with no sales tax at all are Delaware, Montana, New Hampshire, and Oregon. Amazon also states that some local jurisdictions fall outside these laws and names three: Colorado home rule cities, some Alaska cities and boroughs, and Illinois retail occupation tax before December 31, 2021.

Amazon says so itself. Its seller documentation states that Amazon is not responsible for filing taxes on your behalf, that it does not report or remit taxes on behalf of any seller to government authorities, and that you may continue to have a reporting obligation for the tax it collects and remits on your sales. Once you have nexus in a state you file every period, including periods where Amazon collected everything, and the return has to report the marketplace-facilitated portion correctly. That is where it goes wrong. We have scoped sellers whose previous provider pulled Amazon data at state level, missed the line-level detail, and filed on roughly $90 of a $100 Amazon invoice, quarter after quarter.

Possibly, and for reasons that have nothing to do with your own checkout. First, 27 states count sales through a registered marketplace facilitator toward your own economic nexus threshold, while 18 exclude them. California and Texas both count them against a $500,000 threshold, so $600,000 of Amazon revenue crosses it on Amazon sales alone. Second, if you use FBA, your stock sits in fulfillment centers you did not choose, and several states treat that as physical presence on its own. Amazon also notes that its collection does not reach some local jurisdictions, and those are yours. The honest answer is that it depends on the state, so we measure each one separately.

No, and this is one of the few places where states genuinely disagree. Washington lists inventory held by a marketplace facilitator or another third party as physical presence, and says physical presence means you register even below the economic threshold. California treats an out-of-state seller storing inventory in a California fulfillment center as engaged in business there. Illinois goes the other way, with a catch worth knowing: stock used strictly to fulfill marketplace orders does not create physical presence, but stock that also fulfills your own sales does. Pennsylvania's Commonwealth Court ruled against its own Department on FBA storage in 2022, and the Department did not appeal. So the answer is state by state, and nothing on an Amazon order tells you which warehouse it shipped from.

Check the reports rather than assume. Collected tax shows as a line item on the platform's reporting, and if it is absent the platform is probably not collecting, which is common with non-US platforms. Amazon is explicit about the limits of its own reporting: the Marketplace Tax Collection Report is labelled informational only and carries an instruction not to use it to remit sales tax. Report generation is also limited to its US, Canadian, and Mexican marketplaces. Matching Amazon's figures to a filed return only works per order and per jurisdiction. State-level totals hide the mismatches.

It calculates VAT. It no longer files it. Amazon's VAT calculation service applies VAT and prepares invoices at no extra fee, and it lists generation of VAT returns among the things it does not support. It also needs at least one valid EU or UK VAT number from you before you can enroll, and it covers only sales in Amazon's EU stores for goods dispatched from within the EU or the UK. Filing is the part that changed. Amazon states it decided to end the VAT Services on Amazon programme on October 31, 2024, unsubscribed enrolled sellers automatically, and now points sellers to third-party tax providers. Commenda registers and files VAT and GST across 70+ countries, including EU VAT with OSS and IOSS.

You do, for the wholesale side. Amazon's exemption program is buyer-side: a shopper enrolls their own documents to make tax-exempt purchases on sales sold by Amazon, its affiliates, and participating third-party sellers. It does nothing for the distributor and reseller invoices you raise yourself, and those need a valid certificate per delivery state. Commenda collects them through a self-service portal, validates each one on upload, stores it against the customer, and applies it automatically in the states where it is valid. Expiries are tracked and chased, including annual refreshes in states like Florida.