Latest Blog Post

California Targets Amazon FBA Sellers . . . again.

california signToday thousands of Amazon sellers received a notice from Amazon of their intention to release seller information to the California Department of Tax and Fee Administration.   California has been notoriously aggressive with their quest for sales tax compliance from Amazon FBA sellers.  Last year, they put together a task force and sent out thousands of nexus questionnaires intended to identify sellers with nexus in the state created by inventory sitting in a California Amazon warehouse. 

The latest email read as follows: 

Amazon has received a valid and binding legal demand from the California Department of Tax and Fee Administration (CDTFA) requiring that Amazon disclose the following information about your business in 2017:
•    Contact information (name, address, and email)
•    US Taxpayer Identification Number

To comply with our obligations under the law, we plan to provide this information to the CDTFA by November 6, 2018. In many cases, sellers who register and file taxes in California already provide information on their Amazon business as part of their tax filings. Because each seller’s business and tax needs are unique, we encourage you to consult with a tax advisor to answer any questions you may have.

What does this mean for your company?

If you have had inventory in the state of California but have not been collecting sales tax; you likely have an exposure for sales tax for which California can collect from you.   The look-back period can be as long as the length of time you have had inventory in the state.  And the penalties for non-compliance can be stiff.   

Fortunately, there are remedies to provide some relief - including getting registered for sales tax under a Voluntary Disclosure Agreement or participating in a Managed Audit Program.  Both options have their pros and cons.  An experienced advisor can help determine which program fits your needs the best.  Most often, getting into compliance before being contacted by the State will allow for better options.  If you are an Amazon FBA seller and you are not collect sales tax, it should be time to get serious about getting into compliance. Here's a chart showing all states with economic nexus requirements ... Cherry Bekaert's  Economic Nexus Chart DOWNLOAD NOW

What California does with this seller information remains to be seen.  But, if past actions are any indication of future actions, they will likely lean toward taking an aggressive stance to capture lost revenue and enforce compliance going forward.

Cherry Bekaert has an experienced eCommerce sales & use tax team who works with hundreds of FBA sellers to navigate their sales tax obligations, handle registrations, assist with past tax remediation, and provide outsourced tax return filing solutions.   Check out our website. We are happy to help bring your company into compliance.   Contact us at etax@cbh.com.  

 

 

 

Leave a comment

Lauren Stinson, CMI
Written by Lauren Stinson, CMI
As a Principal with Cherry Bekaert, Lauren serves as the National Leader for the Sales & Use Tax practice within the Firm’s State & Local Tax group. Based in Cherry Bekaert’s Atlanta practice, Lauren is an expert on sales and use tax issues that directly impact manufacturers, technology businesses and eCommerce sellers on the state and national levels.