As Amazon spreads its FBA footprint to improve delivery convenience, it puts thousands of sellers at risk for sales tax fines, penalties and late fees. Now, sellers like you are in a tough spot:
Do you register to pay tax and put your business at risk for back taxes, penalties and headaches? Or, do you lay low and hope that states never come knocking?
Starting this month, Amazon sellers have a chance to get out of that bind – at no cost to them.
From August 17th to October 17th, the Multistate Tax Commission (MTC) will forgive back taxes and penalties for sellers that register with the MTC through its Voluntary Disclosure Amnesty Program.
Here’s a quick summary of the rules:
- Your business has nexus in the state. (Not sure what nexus is? Start here).
- The seller cannot have had previous contact with the state in question, such as filing a return or paying tax.
- The taxpayer must then register with the state and file returns going forward.
So, if you have inventory in any of the following 15 states, this your chance to protect your business:
Alabama, Arkansas, Colorado, Connecticut, Idaho, Iowa, Kansas, Kentucky, Louisiana, Nebraska, New Jersey, Oklahoma, Texas, Utah and Vermont.
To get started, follow these easy steps:
- Review the program details here.
- Register in each state that you ship to. As of right now it looks like participants will follow the standard Voluntary Disclosure Agreement process which allows you to cover multiple states with just one application.
- Use Taxify to automate reporting. See how easy it is in our demo video.
- See the advantages Taxify brings to Amazon sellers with our custom Amazon integration.
Taxify has been watching this story carefully as it unfolds. It looks highly unlikely that the states will make this offer more than once. So, if you don’t do something now, you most likely will not have this opportunity again.
Looking for the full story? Our resident tax expert Alex Koral has written up a more in-depth post for the detail-oriented. Check it out here.
For more information on how to qualify for sales tax amnesty, check out our guide, and learn how Taxify can help.