Avoid Tax Nexus

Selling on Amazon yourself can create what is called a tax nexus. This is where you have business property physically in another state and thus must collect sales tax on any sales in that state.

Selling on Amazon yourself can create what is called a tax nexus. This is where you have business property physically in another state and thus must collect sales tax on any sales in that state. You may also have to file an income tax statement since there is profit generated by the sale of a product in their state. This can affect all aspects of your business because once your company has a tax nexus, it has to comply with the rules of that state in all business activities.

New in 2018, the Supreme Court ruled on South Dakota v. Wayfair, Inc. that the physical presence was no longer necessary. As a result, many states have adopted what is called an “economic nexus.” Most use the guidelines set up by South Dakota which is where a business has to have either 200 transactions into their state, or over $100,000 in sales. For companies selling on Amazon, it is very easy to meet the 200 transaction requirement.

As a seller of your products on Amazon, the nexus condition would rest on us and keep your business clear of this legal issue.