Require Amazon to Collect and Remit Sales Tax For All FBA (Fulfilled By Amazon) Sales

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Please require Amazon to collect and remit sales tax for all FBA (fulfilled by Amazon) purchases.

Requiring the hundreds of thousands of small businesses to register in every state and collect and remit in all applicable states is not practical -- it is a complex, heavy financial burden on small businesses and it is causing states to lose billions of dollars in tax revenue each year.

With E-commerce now playing such a big role in the local economies, and with Amazon being THE major player, it is time for new legislation to be passed so that these matters can be properly addressed, removing any doubt regarding State sales tax liability and nexus -- especially as it relates to Amazon FBA and similar programs.

If Amazon FBA was recognized as consignment, from a sales tax perspective, as it should be, then this would solve a lot of the associated issues that we are currently seeing. Laws vary from state-to-state, but most states require that the consignee (the store, or, Amazon in this case) should collect and remit sales tax.

Arguments regarding consignment, who the seller really is and who the 'supplier' is:

1. FBA 'Suppliers' (as they should be called, and not FBA 'sellers') do not choose how/where their products are stored/shipped.

2. Commission is paid to Amazon on each unit sold.

3. FBA 'suppliers' must adhere to Amazon policy. Suppliers do not have the right to refuse sale/shipment without consequence and do not collect any money on transactions (all transactions are handled and controlled by Amazon, the store owner, with the supplier having no participation in said transactions).

4. FBA 'suppliers' have no real relationship with the customer as nearly all communication is prohibited as per Amazon (this relationship is owned and controlled by Amazon, the real seller).

5. Amazon provides advertising for products that they sell, including FBA products. Suppliers have no say in that message or how it's presented.

6. Amazon charges a 'monthly, rental fee' (FBA subscription fee) to display FBA products at their property, as well as additional fees for special exposure (e.g. special ad types or brand page vs. window or end-cap at front of store), as well as additional fees for how the product may be presented (e.g. videos on listing vs. in-store display).

7. Product ownership does not transfer to Amazon (the store owner), but sits on Amazon's shelves until a buyer is found...at which point, the buyer should pay the appropriate sales tax (Amazon/the store owner, is responsible for collecting and remitting this, as they handle all transactions with the end-buyer and own the property where all merchandise is stored and sold).

8. et al.

Amazon should be charging and then remitting the sales tax to all applicable states -- not the FBA seller. Not only would this eliminate any argument about complexity or what constitutes nexus amid the varying, questionable and ever-changing interpretations that each state has established, but convincing the States to get behind it should be easy if they only had to pursue one entity (Amazon), in lieu of the hundreds of thousands of small businesses that currently operate within the US marketplace.

It is estimated that the majority of the FBA sellers that sell on the Amazon-US marketplace are operating on foreign soil, and do not have a legal entity that is locally established inside of the United States. How are the states going to force compliance if a foreign seller, using a foreign bank account, is operating outside of the jurisdiction of local law? This poses serious problems and creates an environment of unfair competition if foreign sellers can offer products 10% cheaper due to not having to collect and remit sales tax. If Amazon were required to collect and remit on all FBA sales, not only would this reduce costs, man hours and complexity etc., but it would be a lot easier to ensure compliance and remittance. States could get the tax dollars that they desperately need, instead of missing out as they do now. If things continue as they are, States will waste tons of money auditing individual sellers and pursuing legal action, all, unnecessarily.

Since Amazon has decided to take full custody of its customer base and is essentially acting as consignment, this should put sales tax liability on Amazon's shoulders, not on FBA sellers. Since FBA sellers are currently required to collect and remit for all states where they are deemed to have a substantial nexus, then, in order to do that, they must first register their business in that State, apply for permits etc., and admit to having a substantial nexus.

Just having a single box of inventory in one of Amazon's warehouses will be sufficient for establishing nexus for most applicable states. Amazon may move inventory around, however they see fit, and in doing so, will force FBA sellers to have nexus in those states, oftentimes, unknowingly. Once nexus is established for a particular state, it applies to ALL subsequent sales to that State -- so, if a seller wants to sell something on Ebay, and the buyer is located in the nexus state, then that seller would need to collect and remit sales tax, even if that inventory was stored in and shipped from their home.

If FBA sellers are required to register in all of the applicable states and admit that they have a substantial nexus, they would then potentially be subject to Corporate/State income taxes for that state, use-tax for all products/services, franchise taxes, non-resident taxes, opportunity taxes and other, associated fees/taxes etc.. If non-local businesses have to admit that they have substantial nexus due to a single box of inventory, and if they have to remit in the same way (or worse) as a local business that is actually operating out of that state, then what other tax implications and responsibilities will they be subjecting themselves to? And wouldn't this put undue burden on FBA sellers? And isn't that illegal?

Please require Amazon to collect and remit sales tax for all FBA (fulfilled by Amazon) purchases.

Thank you.

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