7516322280?profile=RESIZE_400xThe long-standing question about whether or not Amazon will be happy collecting taxes on behalf of 3rd party sellers is officially over. It started way back in 2018 with Washington, Oklahoma, Pennsylvania, New Jersey, Minnesota, and Connecticut.  Missouri was the lone hold out last year. Their Online and Marketplace Tax Law is in effect as of 1/1/2023.

A quick history of the change – 2019 saw a rush of 28 more states.  2020 added 11 more.  In July 2021 Florida and Kansas fell in line.  That’s everyone, except Missouri.  They passed a law last year, but will not be collecting taxes from Amazon directly until January 1st, 2023.   If you have a tax nexus in Missouri you will still need to collect tax on Amazon sales.  After next January Amazon will be collecting it (but their law also expands collection requirements for all online sales)

That brings the total to 50 states (including DC) that Amazon collects and remits taxes for 3rd party sellers (plus there are 4 states that don’t charge sales tax). However, Colorado and Illinois laws have some exceptions to their rules. The bulk of the other Marketplaces like Walmart and eBay have also complied with most of the rules, but not as fast as Amazon. For Amazon, the logic is easy.

  • They have a physical nexus in all 50 states already (so they pay taxes on items they sell direct)
  • They already have an enterprise level merchant collection system that’s been running for year
  • Walmart, EBay and other competing marketplaces are struggling to move as fast

So for a brand that leaves 3 states you may have to collection sales tax in Missouri, Colorado, and Illinois. This broader question of tax collection for Amazon (and direct ecommerce sales) is still up for grabs since the South Dakota vs Wayfair decision last year (Here’s great deep dive on overall tax impact for a brand – https://www.pymnts.com/next-gen-sales-tax/2019/wayfair-marketplace-facilitator-economic-nexus-ecommerce/. To tackle that, teams should huddle with their tax team to understand what’s next.

The following is the current list as of 3/1/2023. For full details see: (Amazon account required) https://sellercentral.amazon.com/gp/help/G7VYHGJ8ZT2M58CP.

State Effective Date
Alabama 1/1/2019
Alaska 4/1/2020
Arizona 10/1/2019
Arkansas 7/1/2019
California 10/1/2019
Colorado 10/1/2019
Connecticut 12/1/2018
DC 4/1/2019
Delaware No sales tax
Florida 7/1/2021
Georgia 4/1/2020
Hawaii 1/1/2020
Idaho 7/1/2019
Illinois 1/1/2020
Indiana 7/1/2019
Iowa 1/1/2019
Kansas 7/1/2021
Kentucky 7/1/2019
Louisiana 12/30/2020
Maine 10/1/2019
Maryland 10/1/2019
Massachusetts 10/1/2019
Michigan 1/1/2020
Minnesota 10/1/2018
Mississippi 12/31/2020
Missouri 1/1/2023
Montana No sales tax
Nebraska 4/1/2019
Nevada 10/1/2019
New Hampshire No sales tax
New Jersey 11/1/2018
New Mexico 7/1/2019
New York 7/1/2019
North Carolina 2/1/2020
North Dakota 10/1/2019
Ohio 9/1/2019
Oklahoma 7/1/2018
Oregon No sales tax
Pennsylvania 4/1/2018
Rhode Island 7/1/2019
South Carolina 4/29/2019
South Dakota 3/1/2019
Tennessee 10/1/2020
Texas 10/1/2019
Utah 10/1/2019
Vermont 6/6/2019
Virginia 7/1/2019
Washington 1/1/2018
West Virginia 7/1/2019
Wisconsin 1/1/2020
Wyoming 7/1/2019