Do you participate in the Fulfillment by Amazon (FBA) process? If so, you may have uncollected / unpaid sales tax liabilities.
If you have inventory sitting in an Amazon warehouse waiting to be shipped, then you have sales tax nexus in that warehouse jurisdiction. Many amateur on line sellers do not know the hidden sales tax responsibilities that are inherit with storing their inventory in an Amazon fulfillment facility.
The Multistate Tax Commission (MTC) recently announced a voluntary disclosure program. The program encourages remote sellers to voluntarily register to collect sales tax. Within this program sales tax, penalties and interest may be forgiven.
There are currently 25 states and districts participating in the MTC Online Marketplace Seller Voluntary Disclosure Initiatives: Alabama, Arkansas, Colorado, Connecticut, District of Columbia, Florida, Idaho, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Minnesota, Missouri, Nebraska, New Jersey, North Carolina, Oklahoma, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, and Wisconsin
Eligibility requirements within this program are:
- You cannot currently be registered to collect and remit sales tax within that state,
- You have not previously been notified that you have an outstanding tax liability in that state,
- You have no physical presence in that state other than inventory stored at a third-party fulfillment center,
- Must timely complete and file the application for Voluntary Disclosure Agreement document.
Program Benefits include the possibility of waiving all prior uncollected sales tax, penalties and interest. Each state’s benefits will vary.
Application Process: To participate, the application must be completed and submitted to the MTC no later than November 1, 2017. The application must indicate the specific state in which VDA is being sought and provide complete and accurate disclosure of estimated taxes uncollected.