For those who have followed me over the years, you know that I am a long time eBay seller and also a seller on Amazon FBA (Fulfilled by Amazon). I have collected sales tax in my state of California and file yearly as I am supposed to do. One of my year end/beginning year goals is to become compliant in collecting sales tax in the states where I have nexus, meaning where my inventory is located in many Amazon warehouses throughout the United States.
The least painful way to go about doing this is with the help of a website called TaxJar.
They have all the info you need to set up accounts in the appropriate states. They have many articles about nexus, warehouse locations and literally step by step actions to getting yourself ready for collecting sales tax for your online sales.
One new addition for me is to set up my eBay tax table by adding the states where I have Amazon nexus and begin collecting sales tax from eBay buyers in those same states as is suggested, to become compliant on the eBay platform. Once the table is set up, there is a check box on the sales form that will collect from the appropriate buyers. Quick and easy.
In order to be able to do that, I did have to apply to thirteen new states with TaxJar’s help. It was rather tortuous to answer the same questions over and over, state by state. I did it one step at a time, writing down passwords, printing out receipts and all the info that I filled out on the forms. It is important to have a Federal tax ID: FEIN, which is free to get from the IRS.
Other information that is asked for is: mailing addresses, billing addresses, what type of business (I am a sole proprietor), what percentage of the business do you own (100% in my case) and a new one to me, the NACIS code. Mine is 454111 which means non-store retail sales.
What does this all cost you might ask? Some states are free, others have fees ranging from $12 in Nevada to $50 in South Carolina. Arizona is the one headache state, since beside the state sales tax, each city has their own application too. I am still working on those at present, but I have done the bulk of the work at this point.
Most of the applications are able to be done online, with options to print out the forms and mail them in the old fashioned way, if you prefer. The online way has the “time” advantage since they states will respond much quicker and you will avoid a 4-6 week wait in most cases.
Once a state sends you an account number, you head right over to your TaxJar account and plug in the info along with the address of the FBA Amazon warehouses for that state and you are almost there. With instructions from the state, you will file monthly, quarterly or yearly. In California, I have been instructed to file every end of July. TaxJar compiles what I owe, shows me step by step how to fill out the form and payments are much easier than ever before. Instead of hours, now I spend maybe 30 minutes from start to finish each July!
A new feature is the “autopayment” option from TaxJar. For a nominal fee, they will actually be able to file some state’s sales tax returns for you. How awesome is that? California has that option but I will have to review it to see if it is to my advantage or not, since I am a small time payer as far as sales tax goes in my home state.
I have personally bookmarked several helpful blog posts from TaxJar and suggest you do this too. How to Register For Sales Tax Permits in Every State (http://blog.taxjar.com/how-to-register-for-sales-tax-permits/) is the first place to begin.
Sign up for TaxJar and receive 10% off your bill for your first 12 months when you use this link or coupon ANNEZARRAONANDI http://ssqt.co/pecb. Good luck and get compliant in 2016.