Amazon sent a message to its sellers informing them the company will begin collect sales tax for orders shipping to Minnesota addresses on October 1, 2018.
“Based on changes to Minnesota State tax law, Amazon will begin calculating, collecting, and remitting sales tax for all orders shipped to customers in Minnesota on October 1, 2018.
Your existing tax calculation settings, order details, and payments reporting will update automatically to reflect this change. No action to your tax settings or seller account is required.
Answers to common questions are available in the Marketplace Tax Collection FAQ. Consider working with your tax advisor to determine any ongoing tax remittance and reporting obligations your business might have.
For more information from Minnesota, see Update for Marketplace Providers.”
Etsy Also Added Minnesota to Sales Tax List
And just like Amazon, Etsy will add the sales tax to orders going to Minnesota addresses starting on October 1 to follow the law’s requirements.
There is no action required by Etsy or Amazon sellers as the marketplaces have the full responsibility to collect, report, and submit the sales tax.
Marketplace Facilitator Laws
The marketplace facilitator laws that those states have passed places the burden of sales tax collection on the marketplaces, instead of the sellers.
This solution is a better method for states to gain larger compliance rates on sales tax collection than trying to find every small business online seller.
It seems strange that eBay is dragging its feet on this issue, and only last week announced it would start collecting sales tax in 2019.
That appears out of step with Amazon and Etsy and may place a higher burden on eBay sellers to comply with new sales tax collection laws.
What do you think about these marketplace facilitator laws?
Let us know your thoughts in the comments section below. Or head over to our Facebook Group for Small Business Sellers to share your views and interact with other small business owners.