Amazon Sharing 3rd Party Seller Info with New York (Again)

by TaxJar November 1, 2020

We were recently notified by several 3rd party Amazon sellers that they received a notification from Amazon regarding the state of New York.

The notification reads:

Amazon has received a valid and binding legal demand from the New York State Department of Revenue (DOR) requiring that Amazon disclose the following information about your business:

  • Contact information (name, address, and federal tax ID number)
  • Total amount of your sales during the 2014 calendar year
  • Total amount of your Amazon sales made to New York customers during the 2014
    calendar year

To comply with our obligations under the law, we plan to provide this information to the DOR by June 1, 2018.

The notification further clarified that the New York Department of revenue has requested this information from 3rd party Amazon sellers who have not elected to use Amazon’s sales tax collection service.

If you received this notice, you are likely wondering why. Unlike other recent notices regarding Amazon sharing 3rd party seller information with state taxing authorities, this notice does not seem to correspond with a new or newly in effect New York law.

However, this latest round is somewhat similar to a notification Amazon sent New York-based 3rd party sellers back in 2016.

What does this notification mean for Amazon sellers?

This is unclear, however it could mean one of a few things:

  • New York may be attempting to locate 3rd party sellers with nexus in the state who are not collecting sales tax – Just as the 2016 notification appeared to be an attempt to locate Amazon 3rd party sellers who had collected, but not remitted, sales tax, this may be an attempt to locate sellers who have nexus in the state but are not collecting sales tax from buyers in the state.
  • New York may be gathering information – Sales tax laws are changing rapidly. New York may simply be using all possible information in order to determine policy recommendations. (Though this seems like a lot of trouble to go through.)
  • New York may be looking to enforce use tax – As evidenced by the fact that they are looking for information on 3rd party sellers who do not collect New York sales tax, the state may also be attempting to enforce consumer use tax. Consumer use tax is due from a consumer when the sellers from whom they buy is not required to charge sales tax.

What happens next?

This notification is a bit of a mystery, though we do know that Amazon will share information with the New York Department of Revenue by June 1, 2018. If you are concerned that you may owe past due New York sales tax and that Amazon sharing your information with New York will pose a problem for your business, we recommend speaking with a vetted sales tax expert to help you determine a course of action.

Did you receive this notification? What do you plan to do? Start the conversation in the comments, or over in our Sales Tax for eCommerce Sellers Facebook group.

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