Category: Taxes & Finances

Everything you need to know about the 1099-K

The 1099-K: Everything Important You Need to Know as an Amazon Seller

It’s that time of the year. When the clock rolls over into a new year, and we collectively exchange an old pile of days for fresh, new ones, ready to take on our resolutions and self-prescribed challenges, something else happens.

Yearly IRS tax season starts. For Amazon sellers, that means receiving a 1099-K from the mothership and for new Amazon sellers, potentially wondering what it even means and why it’s important.

Photo by Fabian Blank

All 37 U.S. States Requiring Marketplaces Collect Sales Tax Automatically Starting January 1, 2020

Collecting sales tax is a seemingly constant point of contention for sellers. Some states require all the tax handling to be done manually, some have laws that make it an almost automatic process, and the rest fall somewhere in between. As time passes, more states are requiring that marketplaces such as Amazon, eBay, Walmart, and others, collect sales tax for purchases made on the platform from 3rd-party sellers and remit those taxes to the states (called Marketplace Facilitator laws). In this post, we’ll cover all the states that will have this requirement as of January 1, 2020.

Photo by Josh Appel

Here are all the new states Amazon will automatically collect and remit sales tax for starting October 1st

As states start to come around to the idea that the future is the Internet, we’re hitting a tipping point where the majority of them are placing the burden for collecting sales tax from marketplace sales on the marketplace operator instead of the seller. For Amazon, here’s the list of states joining the ranks on October 1st.

Photo by Dmitry Demidko

How-to: registering for a sales tax permit in every state

Updated: August 27, 2019

As e-commerce business owners, it’s important to ensure we’re properly registered with states in which we do business. Getting the proper sales tax permit is a critical step, especially when it comes time to purchase product.

This is a list of links to registration sites for every state that collects sales tax. Most of these sites are also good for establishing a sales tax account for remitting sales tax collected from customers, too.

Photo by Ibrahim Rifath

Streamlined Sales Tax in a nutshell

To the surprise of no one, taking care of sales tax responsibilities as an Amazon business owner is a lot harder than it should be. Forty-five states require tax collection, and each has their way of going about it. Services like TaxJar and Avalara aim to make that more accessible, but there’s a program not often talked about (because it cuts into their revenue–I’ll explain why in a bit) called Streamlined Sales Tax.

Photo by The New York Public Library

Wisconsin is joining the ranks of states requiring marketplaces to collect sales tax

We’re inching ever closer to my ideal sales tax management scenario of marketplaces being responsible for collecting and remitting 100% of sales tax payments and businesses and individuals simply filing paperwork. To get us closer to my perfect world, Wisconsin announced they’ll be requiring marketplaces like Amazon to collect and remit sales tax effective October 1st. This will shift the burden from the businesses and sellers that make money on the platform, a welcome bit of news. 

Photo by The New York Public Library

Eight more states requiring marketplace facilitators to handle sales tax collection, and who’s up next

If there’s one thing that’s needless complex when selling on the Amazon US marketplace, it’s having to manage sales tax from up to 45 states plus the District of Columbia. Now that we’re comfortably post-Supreme-Court/Wayfair, we’re starting to see states take a more proactive and sane stance on how sales tax should be collected for online sales.