I don't know how this works with eBay but can tell you what the issue is with Amazon US.
In simple terms they are pulling a fast one by making third party vendors responsible for sales tax. Amazon benefit from vendors who ignore this by having a marketplace where buyers can avoid sales tax, which can amount to a significant chunk of change.
Why do vendors avoid it? Well, it isn't necessarily because they want to defraud the government. It's because of how ridiculously complex the system can become.
If Amazon were responsible for the collection and payment of sales tax it would be super easy. They make the sale, collect the money, have the data and can automate the entire thing.
What does it look like for third party vendors using FBA?
Well, let's say you have a business registered in, Nevada. No state sales tax there. However, by selling through Amazon and using FBA you now have to be aware of something called "nexus".
If your little box containing your widget is located and shipped from an Amazon warehouse located in California you now have to register in California, obtain a resale permit, collect, file and pay sales tax in that state. And, of course, you have to do the same with every state where Amazon has a warehouse. I think the number is somewhere around 16 states. In other words, it's a mess and a nightmare.
Amazon could make this super easy by collecting, filing and paying sales tax themselves but, for some strange reason, they've managed to convince government folk that THEY are not the sellers. This, of course, is ridiculous. Amazon allows businesses to list and sell on their platform but it is no different from selling to Walmart. Amazon has total control over absolutely everything. In that sense it isn't like eBay at all where you truly are the seller.
BTW, as I understand it, the whole business of "nexus" connected to Amazon warehouse locations is still something that has not been fully sorted in law. I've read opinions on the side of single state nexus (meaning, you are only responsible for sales taxes where your business has is located and nowhere else) as well as the exact opposite case where you have to register, collect, file and pay on every state your product is stocked at an Amazon warehouse.
In simple terms they are pulling a fast one by making third party vendors responsible for sales tax. Amazon benefit from vendors who ignore this by having a marketplace where buyers can avoid sales tax, which can amount to a significant chunk of change.
Why do vendors avoid it? Well, it isn't necessarily because they want to defraud the government. It's because of how ridiculously complex the system can become.
If Amazon were responsible for the collection and payment of sales tax it would be super easy. They make the sale, collect the money, have the data and can automate the entire thing.
What does it look like for third party vendors using FBA?
Well, let's say you have a business registered in, Nevada. No state sales tax there. However, by selling through Amazon and using FBA you now have to be aware of something called "nexus".
If your little box containing your widget is located and shipped from an Amazon warehouse located in California you now have to register in California, obtain a resale permit, collect, file and pay sales tax in that state. And, of course, you have to do the same with every state where Amazon has a warehouse. I think the number is somewhere around 16 states. In other words, it's a mess and a nightmare.
Amazon could make this super easy by collecting, filing and paying sales tax themselves but, for some strange reason, they've managed to convince government folk that THEY are not the sellers. This, of course, is ridiculous. Amazon allows businesses to list and sell on their platform but it is no different from selling to Walmart. Amazon has total control over absolutely everything. In that sense it isn't like eBay at all where you truly are the seller.
BTW, as I understand it, the whole business of "nexus" connected to Amazon warehouse locations is still something that has not been fully sorted in law. I've read opinions on the side of single state nexus (meaning, you are only responsible for sales taxes where your business has is located and nowhere else) as well as the exact opposite case where you have to register, collect, file and pay on every state your product is stocked at an Amazon warehouse.
It's a mess.