Amazon Begins Collecting Sales Tax on FBA Sales for New Jersey

New Jersey marketplace tax begins on November 1, 2018. As a result, Amazon has begun to collect sales tax for FBA products sold to residents in New Jersey. Read more from New Jersey’s Department of the Treasury.

Since the South Dakota v. Wayfair ruling in June 2018, more and more states have passed or are passing legislation that requires marketplaces to collect sales tax.

If you’re an Amazon seller, you may have seen sales transactions with “MarketplaceFacilitatorTax-Principal” and “MarketplaceFacilitatorTax-Shipping” on sales orders from states that have passed new sales tax legislation.

Since these items show up on the sales orders, you’ll want to record the transactions in your accounting software as well. See the link at the end of the article for how SellerZen handles these taxes.

Visit Amazon’s page on Marketplace Tax. But other online marketplaces such as eBay and Etsy are also required to collect and remit sales tax on behalf of their sellers.

New Jersey joins a growing list of states for which Amazon collects sales tax. Thus far, they are:

  • Oklahoma
  • Minnesota
  • Pennsylvania
  • Washington

The threshold for New Jersey is:

The remote seller’s gross revenue from sales of tangible personal property, specified digital products, or services delivered into New Jersey during the current or prior calendar year, exceeds $100,000or

 

The remote seller sold tangible personal property, specified digital products, or services delivered into New Jersey in 200 or more separate transactions during the current or prior calendar year.

While Amazon collects and remits sales tax for FBA sales, many sellers who do both FBA and FBM are unclear as to what to do. We recommend that you speak with your tax advisor for professional advice for your business.

If you’re using SellerZen to automatically sync and import your Amazon transactions into QuickBooks Online, then you’ll have to add New Jersey as a tax agency. Once configured, SellerZen will map the new tax agency and create the corresponding deposit into the Marketplace Facilitator Tax account used to offset the sales tax liabilities.

Learn how to set up marketplace facilitator sales tax in QuickBooks Online and SellerZen for both the new automated sales tax engine and the old sales tax engine.

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