Amazon News Roundup, Volume 1
In a message posted by Amazon_News, in the Amazon Services Seller Forum, sellers were told that there would be some changes made regarding tax collection.
These changes apply to orders shipped to the District of Columbia or Nebraska, and took effect on April 1st, 2019:
“Based on changes to the District of Columbia and Nebraska State tax law, Amazon will begin calculating, collecting, and remitting sales and use tax for all orders shipped to customers in the District of Columbia or Nebraska on April 1, 2019.
“Your existing tax calculation settings, order details, and payments reporting will update automatically to reflect Amazon’s responsibility. No action to your tax settings or seller account is required.
“Answers to common questions are available in the Marketplace Tax Collection FAQ. Consider working with your tax advisor to determine any ongoing tax remittance and reporting obligations your business might have.
“For more information, see Marketplace Tax Collection FAQ 2019
“For more information from Nebraska, click here
It appears that Amazon is clamping down on sellers who have multiple Seller Central accounts:
“You have used more than one account to sell on our site. This is against our policies. Sellers on Amazon.com are not allowed to use multiple accounts to sell on our site” – Amazon Seller Performance
“There seems to have been hundreds or thousands of Amazon accounts suspended for running multiple accounts. Many saying they do not have multiple accounts [so] may be a bunch of false positives.” – Amazon Sellers ASGTG
Sellers are concerned about ‘false’ reviews affecting their accounts:
“HELP!!! Amazon deactivated my account today. They said I [was guilty of] “Misuse of Ratings, Feedback, or Reviews,” “Misuse of Sales Rank,” and “Misuse of Search and Browse.” – Raymond
“Another one is, AMZ is supposedly clamping down on ‘false’ reviews, this has been exacerbated by findings by consumer group ‘Which?‘ in the UK that caused a media storm. It seems though that many obvious Chinese sellers still have thousands of reviews…” – Graeme
Want to get in on the chatter?
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Amazon apologized for its handling of an email sent to sellers last week, regarding changes to fee taxation for sellers active on Amazon.com.
This is the follow-up email that went out, clarifying the upcoming adjustments (you can read the previously sent email here):
On April 11, 2019, we sent you an email informing you of upcoming changes to the collection of sales tax on some of the fees you pay on Amazon.com. Based on the feedback we received, we realize that we did not include sufficient details in that email, and we would like to apologize. The purpose of this email is to provide greater clarity on the upcoming changes.
We are not increasing our fees. However, some states consider Selling on Amazon fees, such as per item, order, and referral fees taxable services. Similarly, Fulfillment by Amazon (FBA) inventory prep fees, such as bubble wrap, polybag, taping, and labels are considered taxable in some states. To comply with state tax laws, Amazon.com must begin collecting and remitting sales tax on some of these fees. Though we recognize that these taxes will increase costs for some of our selling partners, we expect that the vast majority of fees paid on Amazon.com will be unaffected by these changes in taxability.
Below, we have included a breakdown of the states where we will begin collecting sales tax on certain fees starting June 1, 2019. The location of your business determines whether tax is applicable on the Selling on Amazon fees. The location of the fulfillment center performing the service determines whether tax is applicable on the FBA inventory prep fees. U.S. tax rates typically range between 4% and 10%. State tax rules can change frequently and the information below may become outdated if states make changes to their laws.
- Amazon is required to collect taxes on Selling on Amazon fees in Connecticut, the District of Columbia, Hawaii, South Dakota or West Virginia, based on each state’s tax rates. Selling on Amazon Fees include the Referral Fee, Subscription Fee, Variable Closing Fee, Per-item Fee, Promotion & Merchandising Fee, Refund Commission Fee, Checkout by Amazon, and Sales Tax Collection Fee. For example, if your business is located in West Virginia, and your sales tax rate is 6.39%, and you sell an item with a total price of $20, which is subject to a 15% referral fee, we will collect and remit a sales tax of $0.19 to comply with state laws (calculated as 6.39% of the referral fee amount of $3.00). If your business is located outside Connecticut, the District of Columbia, Hawaii, South Dakota or West Virginia, we will not collect sales tax on the Selling on Amazon fee you pay.
- Amazon is required to collect taxes on FBA Prep Services in Arizona, Connecticut, Illinois or West Virginia, based on each state’s tax rates. FBA inventory prep fees include the Labelling Fee, Polybagging Fee, Bubblewrap Fee, Taping Fee, and Opaque Bagging Fee. For example, if you decide to use FBA Prep Service to bubble wrap your products, and the service is performed at a fulfillment center in Arizona, and the sales tax rate at that location is 8.37%, and the bubble wrap fee is $0.80/unit, we will collect and remit a sales tax of $0.07 to comply with state laws (calculated as 8.37% of the bubble wrap fee amount of $0.80/unit). If the service is performed at a fulfillment center outside Arizona, Connecticut, Illinois or West Virginia, we will not collect sales tax on the FBA Inventory Prep fees you pay.
For a list of Frequently Asked Questions on this topic, refer to the following page:
You will be able to view the sales tax collected on your fees in the transaction details page of your Payments reports.
For a complete list of seller fees, refer to the following Help pages:
Selling on Amazon Fee Schedule:
FBA features, services, and fees:
In the news this week
Need to know for Amazon FBA Sellers:
- Amazon’s letter to shareholders – Amazon Blog
- Thousands of ‘fake’ customer reviews found on popular tech categories on Amazon – Which?
- Amazon enters the skincare industry – Skift
Also of interest:
- Amazon plans to close its marketplace for Chinese consumers – CNBC
- Amazon workers strike at four German warehouses – Reuters
- Pilots who fly DHL, Amazon flights, protest near CVG for pay raise – Cincinnati.com
- Amazon is delivering packages out of ‘carnival’ tents in a mad race to catch up to UPS and FedEx – Business Insider
- Food stamps recipients can now order groceries online for delivery. Amazon, Walmart, and ShopRite will offer the service – CNN
- Italy’s competition watchdog launches probe into five Amazon companies – Reuters
- Alexa audio recordings not invasion of privacy: Amazon CTO – Gulf News
- Amazon CEO Jeff Bezos salary is only $81,840 per year – Deseret News
- EBay CEO Devin Wenig rips Amazon’s business practices in shareholder letter – Fox Business
Anything we missed?
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