Marketplace Tax Collection: Amazon to Collect Sales & Use Tax for Specific States

Marketplace Tax Collection

As of Oct. 1, 2019, Amazon began collecting and remitting sales and use tax from sellers for all orders shipped to customers in the states of Arizona, California, Colorado, Maine, Maryland, Massachusetts, Nevada, North Dakota, Texas, and Utah. The Marketplace Tax Collection change is due to recent changes in those state tax laws.

Marketplace Tax Collection (MTC) applies to all sellers on Amazon.com with orders destined to states where Marketplace Facilitator or similar laws have been enacted. All sellers must agree to automatic MTC regardless of the volume or quantity of sales made by the seller.

For orders destined to a MTC state, Amazon will determine an item’s taxability using the product category and item description provided when creating the listing. Amazon does not utilize the product tax code assignment or tax calculation settings for this determination.

Sellers can view payments reports that show sales tax collected and a Marketplace Facilitator deduction (similar to seller fees deduction), which is the amount Amazon will remit to the state. Sales tax collected on existing orders, fulfillment, payment, and sales tax reports are available in your account; but you may need to add optional MTC columns on some reports.

For links to each state resource, log in to your account and view the Marketplace Tax Collection FAQ. For assistance on understanding MTC, contact us for a consultation.

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