Earlier this week we wrote about a tax amnesty for US sellers who may not have been remitting sales tax to States where they have a nexus. We can no announce that the amnesty will also apply to all UK and EU sellers who may wish to make use of it.
Put simply, if you have a nexus in a State (i.e. you operate from premises which can be taken to include holding stock in a warehouse including Amazon FBA) then you are liable for sales tax in that State.
The amnesty, which runs from the 17th of August 17 until the 17th of October 2017, is an opportunity to wipe the slate clean and start paying any Sales Tax due. So long as the participating State hasn’t already started chasing you for Sales Tax there will be no back tax and no penalties to pay.
This is an interesting one for UK and EU sellers because in all honesty we’re not sure quite how easy it would be for a US State to start legal proceedings to collect sales tax and apply financial penalties to you. However what is much more likely to happen is that one day they’ll harangue Amazon who will immediately freeze your stock and put your account on hold – otherwise Amazon (or any other fulfilment house you use) could potentially become liable for your unpaid taxes and fines.
Assuming you are a responsible and ethical business which wants to render any taxes due, the amnesty period is the ideal time to come forward if in the past you’ve wondered about US Sales Tax and been unsure quite how to handle it. Getting any past taxes wiped without any penalties takes away the worry of a massive bill so all you’ll need to do moving forward is to pay any tax due to the relevant States.
There are 15 States who have confirmed participation in the amnesty: Alabama; Arkansas; Colorado; Connecticut; Idaho; Iowa; Kansas; Kentucky; Louisiana; Nebraska; New Jersey; Oklahoma; Texas; Utah; and Vermont. If you come forward under the voluntary disclosure agreement then you will be required to file returns, pay the tax due under the returns, and register with the State (if required) without penalty or liability for unpaid, prior accumulated sales tax in the participating states.
