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What do Amazon fulfillment centers mean for FBA sellers?

by TaxJar January 8, 2024

Please note: This blog was originally published in 2020. It’s since been updated for accuracy and comprehensiveness.

As Amazon grows and expands their operations, they will continue to build new fulfillment centers across the US. What do these new facilities mean for FBA sellers when it comes to sales tax?

Sales tax nexus in new states

While not all Amazon distribution centers create nexus, if the fulfillment center is one that houses items that are stored for sale, chances are, these centers will create nexus in the state. In this case, Amazon FBA sellers may soon find themselves with sale tax nexus in new states. (Important to note: Sometimes Amazon calls various facilities “fulfillment centers” even when items only transition through there and thus don’t create nexus for Amazon FBA sellers. Sometimes a building that Amazon or the press refers to as a “fulfillment center” will not house activities that create nexus for FBA sellers.)

What to do if you have sales tax nexus in the state where a fulfillment center is located

Here’s what to do:

1.) Determine if you have inventory stored in the state – You can do this by either pulling your “Inventory Event Detail Report” in your Amazon Seller Central account or checking your TaxJar dashboard. If you see a brown badge next to the state, then we’ve shown items shipping from a confirmed Amazon fulfillment center. If you don’t have TaxJar, you can try a 30-day free trial today.

FBA Sales Tax Nexus TaxJar

2.) Register for a sales tax permit in the state – Once you’ve determined that you have nexus in the state, your next step is to get registered. Check out our guide to registering for a sales tax permit in each state here.

3.) Setup sales tax collection from customers in the new state – Once your sales tax permit is in hand, start collecting sales tax from your Amazon customers in the new state where you have met nexus.

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Please note: This blog is for informational purposes only. Be advised that sales tax rules and laws are subject to change at any time. For specific sales tax advice regarding your business, contact a tax advisor.

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