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How to ensure your being charged California Sales Tax on Amazon Purchases

Jul 24, 2018

From the blog article you might be confused... why would anyone *want* to pay California Sales Tax when they could avoid it?

Well for businesses operating in this state (and technically individuals too!) if you reside in California you are required by law to pay sales tax. Read the full law here:

http://www.boe.ca.gov/lawguides/business/current/btlg/vol1/sutl/sales-and-use-tax-law-chapters.html

Because of this many small businesses who purchase products on Amazon run into an issue where some items don't charge sales tax and they must manually report and pay this tax to the state. This process can take a lot of extra time for your bookkeeper or accountant to do and so it is often much easier to simply choose to purchase products where sales tax is being collected. This way no extra paperwork is needed.

This article came to me when the accountant of one of our Oakland Law Firm MSP clients told me the firm was looking for alternative vendors to Amazon to purchase Flash Drives from, as often Amazon wasn't charging them the proper sales tax. 

In this blog article I am going to show you

How to tell if Sales Tax is being charged on an Amazon item.

In this example we will look at two Amazon products for memory keys:

A Sandisk Flash Drive where tax is being charged and a Pnstraw Flash Drive Pack where no tax is being charged.

The first step on any product page is to find out who the seller is - Amazon directly, or another 3rd party seller selling on Amazon that may or may not be charging tax. To do this simply click on the "New from" or "Used & new from" link. You will always find this not to much farther down from the price, just under the product's summary description. 

Find the new and used from link on amazon tech plus consulting

After clicking into the seller information you will be presented with a new page showing you who the seller is and the estimated California Sales Tax to be collected:

Amazon seller page showing california sales tax tech plus consulting

In the example above for the SanDisk flash drive you can see there are 6 sellers (5 of them Amazon divisions) and one of them 3rd Party. All sellers in this example are collecting sales tax, so you would be good to purchase this item.

 

Let's look at another item where tax isn't being collected on the Pnstraw Flash Drives:

Find the new and used from link tech plus consulting

Here there is only one seller, and we click into the details the same way.

 

Amazon Seller not charging california sales tax tech plus consulting

On the seller page we can see this item is

Fulfilled by Amazon, but that it is a 3rd party seller who is NOT collecting California Sales Tax.

 

As a final fail-safe when you are at the checkout stage be sure to check that sales tax is being charged:

Confirm sales tax is in checkout tech plus

Please note if you have multiple items some may be from sellers charging sales tax and some might be from sellers not collecting it. Be sure to look at the total and make sure it ads up. If in doubt go back to the product page for each item and drill into the seller information page like we did above.

 

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Hopefully this has been helpful. Tech Plus Consulting provides outsourced IT Support for Oakland and San Francisco Bay Area Law Firms, Accounting Firms, and other small businesses. Our mission is to help you work smarter and be productive with your technology. We offer a great IT Scorecard for new customers looking for an in-depth IT Assessment of their network infrastructure and business processes.