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Tue Apr 10 2018 13:17:39

Even Amazon Has Trouble with State Sales Tax Compliance?

By: Reader

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Dear Ina, 
Thank you for helping us keep our heads in the madness of selling online. I sell on eCRATER and Amazon. 

I know that you are aware that Amazon was to start collecting PA Sales Tax on the 1st of April. Today I got my first Amazon order from PA. Tax was charged. However, in my niche of selling sewing patterns, the majority of sewing patterns are NOT taxable. So the tax collected is illegal (or at least not something they should be doing). 

I have sent Amazon a message about this, but I am sure that I am not the only one that is seeing tax being collected when it isn't supposed to be. I guess it is just easier for Amazon to tack tax on to every PA order rather than check to see if it was an actually taxable item. 

Other sellers may want to be aware of this so they protest when necessary. Most 'street clothes' are not taxable either which is why where I am located, people come by the busload from NY and Canada to shop in our malls for clothing!
M.W.




Comments (17) | Permalink

Readers Comments

Even Amazon Has Trouble with State Sales Tax Compl   Even Amazon Has Trouble with State Sales Tax Compl

by: Silver Ice King This user has validated their user name.

Tue Apr 10 14:29:26 2018

I think you will find that there will be a lot of that type of Sales Tax collections made and as long as the money is remitted to the correct states is to be expected.  I am in CA and if I remember correctly we have something like 50+ sales tax jurisdictions that range in % from 7.25% to at least 10.25% and maybe one as high as 10.75%.  I have a resale license and collect tax on all CA sales and charge the rate that would be charged if they came to my facility.  I collect so little as 95% of my sales are to other States as rarely do my items show up in CA searches except for 2 months of the year, (no manipulation claims here though...lol).  

I am sure that is not the exact way it is supposed to be but there is no way I am going to spend the time allocating $25 a year of tax to the various other counties/cities/districts as CA collects 6.25% of the tax and the rest is what is allocated.  What I would really like to see Ebay do (not sure if this happens on Amazon also), is force the sellers from China who charge 12-15% Sales tax on all sales, regardless of where the buyer lives, to remit all that money to the various states where the funds were collected from.  That would be a nice tidy sum after awhile.

I doubt that there is a software program out there that can allow the seller to collect the correct amounts while also allowing the various exempted items from being taxed as I doubt there is any one company that has all that information at their hands.  At least they are attempting to do what they are now tasked with doing.  I can see Ebay somehow throwing this type of issue right back on the seller and wishing them luck figuring it out since their programs cannot give you any reports that are worthwhile or close to correct on a monthly or quarterly basis.  I run 4 sets of reports from different areas on Ebay each month and none of them ever tie to the exact dollar amount,  let alone tie out to the numbers I get when i plug all that information into an Excel Spreadsheet so I can see what products are profitable and which are not.

I feel sorry for the companies that are buying data gleaned from Ebays information as  there is no way in heck any of it is accurate since they cannot even show the sellers the correct information that makes any sense in Sellers Hub.

Even Amazon Has Trouble with State Sales Tax Compl   Even Amazon Has Trouble with State Sales Tax Compl

This user has validated their user name. by: Beanie

Tue Apr 10 14:31:13 2018

Since sales on the internet being taxed, the only way this headache could possibly be avoided is to have a flat sales tax that ONLY applies to online sales. Make the rate universal across the whole U.S. Maybe that would help take the nightmarish mess this is going to end up being for everyone. Just a thought.

Even Amazon Has Trouble with State Sales Tax Compl   Even Amazon Has Trouble with State Sales Tax Compl

This user has validated their user name. by: iheartjacksparrow

Tue Apr 10 15:46:54 2018

@Beanie - That's a great idea! Of course, most politicians are too dumb to come up with an idea that sensible.  

Even Amazon Has Trouble with State Sales Tax Compl   Even Amazon Has Trouble with State Sales Tax Compl

This user has validated their user name. by: RKTOYS

Tue Apr 10 20:34:03 2018

We don't need a federal, or federally-controlled, tax.  Rich "people" that can reach into DC will manipulate it to screw everybody else.  The least problematic solution is for sellers to just count everything toward where the sales tax of the fulfillment center the product ships out of.

Even Amazon Has Trouble with State Sales Tax Compl   Even Amazon Has Trouble with State Sales Tax Compl

This user has validated their user name. by: Rexford

Wed Apr 11 06:08:09 2018

I wouldn't fight it. If they are collecting the tax for you then they are doing you a big favor and saving you from a lot of headaches.  Let the buyer duke it out with Amazon since Amazon is collecting the payment.

Even Amazon Has Trouble with State Sales Tax Compl   Even Amazon Has Trouble with State Sales Tax Compl

This user has validated their user name. by: Rexford

Wed Apr 11 06:10:48 2018

RK Toys says "Rich "people" that can reach into DC will manipulate it to screw everybody else."

Drain the sewer!  Make America Greed again!  LOL

Even Amazon Has Trouble with State Sales Tax Compl   Even Amazon Has Trouble with State Sales Tax Compl

by: angryllama This user has validated their user name.

Wed Apr 11 10:30:45 2018

NO.  It is not going to be even REMOTELY simple as the SALES TAX that one would have Charge AND REMIT just to 50 STATES.  Many Cities, Counties, and other TAXING entities are 100 percent CORRECT to require that THEIR Sales Tax be Collected and REMITTED, too.
Stop even THINKING of this as STATE Sales Taxes.  I had a brick and mortar Industrial Sales Company in Baton Rouge, LA for 20 years. Thanks to the QUILL decision umpteen many years ago NO company that does NOT have a LOCUS (physical presence) in any OTHER STATE has been required to collect and remit sales taxes to that other state for ANY sale that was SHIPPED by COMMON CARRIER (USPS) to that "out-of-state" customer/buyer.  My wife could cite you Chapter and Verse, about dealing with ALL of the Parishes (think counties) in Louisiana charging their OWN Sales Tax... at THEIR OWN RATE. Add to that that within a Parish there might be 1 2 3 or more CITIES who also charge  THIER own fractional percentage of Sales Tax.  
Don't imagine that once WE ALL are forced to Collect and Remit for STATE sales taxes that Cities like NYC, LA, Chi, St.L, KC or Cedar Rapids won't also start clamoring for THEIR sales taxes, too.
By the Way.... thinking that some DEFINITIVE "Minimum $-value of sales" would shield small sellers from this Cluster-**** is whistling past the graveyard thinking.  What would happen would be WAVES of this state or THAT state moving the goal-posts and Lawsuit after Lawsuit from here to the end of time.

Even Amazon Has Trouble with State Sales Tax Compl   Even Amazon Has Trouble with State Sales Tax Compl

by: mcposty This user has validated their user name.

Wed Apr 11 19:49:26 2018

Agan why is everyone complicating this? YOu collect tax for where you are. End of story.

Lets all drive to PA, buy soemthing and demand they collect tax for OUR city not theres, because thats where we are from.

Stop being pushovers, we do NOT have to submit tax money to any other state, and if Amazon does it for you, Amazon is the criminal here, stealing YOUR cities taxes dollars and giving it away to another state


Even Amazon Has Trouble with State Sales Tax Compl   Even Amazon Has Trouble with State Sales Tax Compl

by: phantom This user has validated their user name.

Thu Apr 12 00:25:27 2018

I advocate doing what our fore founder did. We are overdue for a revolution.

Even Amazon Has Trouble with State Sales Tax Compl   Even Amazon Has Trouble with State Sales Tax Compl

by: lostsoul This user has validated their user name.

Thu Apr 12 09:16:46 2018

Since Amazon relies on the merchants to provide the proper Product Tax Code for each ASIN, the problem MW has pointed out will be all over the catalog. Even if the 3rd party seller has the time, inclination, and knowledge of how to implement the proper Product Tax Code, it will depend on Amazon having the correct Product Tax Code available for the 3rd party seller to select.  

Even Amazon Has Trouble with State Sales Tax Compl   Even Amazon Has Trouble with State Sales Tax Compl

by: Tinker Belle This user has validated their user name.

Thu Apr 12 09:45:54 2018

@Rexford - may I respectfully disagree -- the HUGE problem with Amazon (or any other payment processor) collecting sales tax is just as some of these posters have stated.  

If they collect it WRONGLY (like on items that are exempt) then WHO fixes the mistakes?? Because s*** runs downhill of course it is the SELLER!! who if they had done it themselves would have done it RIGHT so there is double punishment on an innocent party who gets whacked for something over which s/he had no control. (But do you really think the State Tax & Finance rep who is telling you why you have to pay such  big FINE, going to be sympathetic??)  

@Iheartjack --- ROFL - !  We all know the difference between PRO and CON.  So what do you think about ''progress'' and ''Congress''........ ??

Even Amazon Has Trouble with State Sales Tax Compl   Even Amazon Has Trouble with State Sales Tax Compl

by: Tinker Belle This user has validated their user name.

Thu Apr 12 10:08:34 2018

@angryllama -- Thank you for pointing this out!  I live in NY and we have the same situation here - not just County taxes but City taxes, and even ''temporary'' taxes - example, the city of Rome charges an extra 1/4% between July 8 and August 30.  THANKFULLY the state has a good software program but I still have to insert the dollar amounts into the right blanks (and sometimes have to look up sale dates in addition to buyer location to comply -- like I did this time around).  

I think the real solution is a flat amount as Beanie suggests.  But the alligators in the swamp do not understand how vital small businesses are to the state economy.  They are infected with a disease called ''Power and Greed.'' They do not comprehend that there is a real concern underlying the story of the Goose & the Golden Eggs.    

There WAS a ''minimum sale'' definition being considered in some federal legislative proposals - at least it was in a bill that the last I knew was with Speaker Ryan who is now taking the easy way out and quitting... it would have exempted businesses with under $1million sales. That seems a little high to me for a ''small business,'' but there should be SOME reasonable exemption. If enough ''small businesses'' go under the country won't be far behind.

My own story was I made the mistake of buying a fish seasoning mix we like from Amazon.  Of course, I was billed for sales tax.  I contacted them telling them that ''food seasonings'' are EXEMPT in New York, and asked for a refund of what I had paid in tax.  ''NO'' they said, you live in New York - you pay tax!!   I wrote again this time including a screen shot and link to the page in NYS Tax & Finance website showing that ''Food Seasonings'' is stated clearly in the list of EXEMPT items.  This time they refunded my money .  

Even Amazon Has Trouble with State Sales Tax Compl   Even Amazon Has Trouble with State Sales Tax Compl

by: Tinker Belle This user has validated their user name.

Thu Apr 12 10:30:44 2018

Latest Example of ''You Can't Make This Stuff Up'' --

''[Governor Andrew] Cuomo wants to expand the existing internet sales tax collected by online retailers such as Amazon and eBay when products are sold to New York state residents.

The governor’s new “Internet Fairness Conformity Tax” would require third-party online marketplaces to collect sales taxes on any products sold to a New York resident, regardless of whether the seller is located within or outside of New York state.

Budget officials say the expanded tax would generate $75 million initially, and then $150 million per year over the next three years.''

The above appears in http://www.syracuse.com/politics/index.ssf/2018/01/how_ny_would_use_9_
new_taxes_fees_to_raise_1_billion.html
  Thankfully it hasn't succeeded (yet) into law.

My understanding is there was/is no exemption for small business - someone in PA who sells $30 of items per year on eBay, among which is ONE sale to a NY resident ( a $5 book) would be required to charge and remit New York sales taxes on that $5.00, excuse me, $7.50 because shipping is taxed too!    

I have pipe dreams of going out and painting great big cracks down the centers of the big red heart shapes in  I [HEART] NY images.  

Personally I think most states would be more successful going after USE taxes that are not paid by residents who flaunt existing law.  But I guess it is too much work and trouble - it's a lot easier to try to force others into doing the work instead.  

Even Amazon Has Trouble with State Sales Tax Compl   Even Amazon Has Trouble with State Sales Tax Compl

by: ToolDIva This user has validated their user name.
Web Site

Thu Apr 12 11:15:16 2018

When Ebay begins "intermediating payments" they wil have to collect all these taxes before they decide when to forward us the net income. How can we collect taxes when we don't get our hands on the money?

Even Amazon Has Trouble with State Sales Tax Compl   Even Amazon Has Trouble with State Sales Tax Compl

This user has validated their user name. by: Marie

Thu Apr 12 13:02:29 2018

@tooldlva

When Ebay becomes a payment processor, my guess it would be handled like or similar to how Etsy and Amazon are doing that.  

They tack on the amount owed for taxes to what the buyer needs to pay.  The buyer pays it. With Amazon they give the seller the money received from the buyer LESS Amazon fees and sales tax collected.   Amazon remits the tax to the appropriate state.  It actually works out just fine for the seller and it is easy.  

Even Amazon Has Trouble with State Sales Tax Compl   Even Amazon Has Trouble with State Sales Tax Compl

by: topdog This user has validated their user name.

Thu Apr 12 18:25:02 2018

So long as we would have to comply by all of the different rules, and file with 50 different states (plus potentially territories!) it IS going to be complicated. I doubt any of us have the ability to do that quickly and easily. Oh, let's not forget being subject to 50 different audits! So one rate, unless we pay it to one central payment point, will be a death knell to small businesses.
Unfortunately the govts are going to find a way to ram this down everyone's throats. They say it's about being "fair to local stores", but the real reason is that they see extra tax $$, and far better than that, tax $$ not paid by their constituents! As Louie the Liquidator once said, "the only thing better than money is other people's money". Well, the politicians see a windfall of other people's money, and they're going all in for it.  

Even Amazon Has Trouble with State Sales Tax Compl   Even Amazon Has Trouble with State Sales Tax Compl

by: rover This user has validated their user name.

Sun Apr 15 06:13:05 2018

Just another way for greedy corrupt politicos to find new ways to fleece hapless citizens



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