TAG Tax

Author: Matthew T. Fuller

The Multistate Tax Commission ("MTC") has just announced that it is going forward with a voluntary disclosure program for sellers on Amazon who have created nexus in a state because of their participation in the Fulfillment by Amazon ("FBA") program.  The MTC is an intergovernmental state tax agency that works on behalf of states and taxpayers to facilitate the equitable and efficient administration of state tax laws that apply to multistate and multinational enterprises.

What is the FBA Program and How Does it Create State Tax Nexus? 

Under the FBA program, sellers can list their products with Amazon and have Amazon hold their products at one of its warehouses before shipping products to the purchaser.  The presence of inventory in a state is sufficient to create nexus for sales tax, corporate tax, and personal income tax purposes, regardless of whether the seller has any other presence within the state where the inventory is stored.

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