Sales Tax for Amazon Sellers: The Landscape Has Changed, What Now? - Episode 114

RECOMMENDATIONS FROM CPA MARIO LUCIBELLO

 

DESCRIPTION

Today, we're having a conversation with Mario Lucibello, a partner at Greenhaus Riordan & Company LLP, in West Haven, Connecticut, about the fascinating topic of sales tax. Mario is a CPA who does a lot of work with e-commerce sellers and he is familiar with the way that sales tax works in this context. In today's episode, Mario talks to us about how the sales tax system works, the recent changes that have happened, what he recommends, and how he advises his clients to approach all of this.

In recent years, the sales tax situation in the US has gone from complicated to even more complicated. And Amazon has been neither transparent nor particularly helpful with its sales tax collection capabilities and requirements for FDA sellers. As a result, sellers have been struggling with knowing what to do with their sales tax obligations, and with the fact that Amazon shifts their inventory around within their fulfillment center network, without the sellers having any control. 

This issue has been compounded over the past few years because the states are now recognizing that they have a right to the revenue generated from sales tax, so they have started to come after some sellers, requiring them to pay back taxes and penalties. Tune in today to find out about the sales tax system, how it works, and how you should be thinking about your sales tax collection obligations, going forward.

“This Marketplace Facilitator is essentially shifting the burden of the tax filing to the marketplace, meaning Amazon, eBay, or any kind of third-party that’s the middle-man in these transactions.”
— Mario Lucibello

KEY TAKEAWAYS

  • Kiri shares a story about an Amazon seller in Pennsylvania.

  • Some states, like New York, California, Massachusetts, Washington, and even Texas, are particularly aggressive.

  • How the sales tax landscape has changed over the past three or four years.

  • The required quarterly filing for each state has become a huge headache for sellers.

  • A recent change has been the Marketplace Facilitator tax rule that's come into play. Mario explains how it works.

  • The Marketplace Facilitator is essentially shifting the burden of the tax filing to the marketplace, meaning Amazon, Ebay, or any kind of third-party that's the middle-man in these transactions.

  • If you're selling on Amazon and your own site, technically, you should be complying with the sales that are coming out of your site.

  • Mario gives the thresholds for sales tax compliance.

  • Amazon has recently, state by state, started to roll out mechanisms to collect sales tax on behalf of sellers. 

  • Mario shares his recommendations for clients who are selling on multi-channels.

  • It's a big risk to not comply with your sales tax obligations.

  • Mario explains how the income tax landscape is set to change.


MENTIONED IN THIS EPISODE

  • Win a copy of Kiri's book, Amazon for CMOs! All you need to do is write a review of this podcast in iTunes, Stitcher, or wherever you listen to this podcast, take a screenshot of the review that you wrote, and email it to Kiri at kiri@bobsledmarketing.com or send it to her on LinkedIn.

Season 2Kiri MastersComment