South Carolina has announced that they will pursue Amazon directly to force Amazon to collect sales taxes on behalf of Amazon sellers on sales to South Carolina customers. If all states adopted this policy and Amazon simply agreed with it today, it sure would make things easier for Amazon sellers. At least in theory that sounds pretty good. However, there are at least 2 major realities that FBA sellers must face here. First, so far only one or two states have indicated that they may take this approach. Second, and not surprisingly, Amazon has stated that the assessment is without merit and that they will defend themselves vigorously in this matter.
Should Amazon be required by the states to collect sales tax for their FBA sellers? That is an interesting question for theorists and advisors to debate. Nero fiddled while Rome burned. Theorists and pundits can spout their arguments and their theories, but what happens while FBA sellers are getting burned by state tax auditors?
Here’s what you need to know if you sell online through Amazon and utilize FBA: