The 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 |