Amazon Collects Sales Tax, But You’re Not Off the Hook Yet

Amazon does collect and remit sales tax on behalf of sellers in Marketplace Facilitator states, but this does not mean sellers are completely off the hook for sales tax compliance.

What Is the Marketplace Facilitator Law?

Many U.S. states have passed Marketplace Facilitator Laws, which require large online platforms like Amazon, Walmart, and eBay to collect and remit sales tax on behalf of third-party sellers for orders shipped to certain states.

If your sales occur in a state with this law, Amazon automatically collects and remits the sales tax for you.

If a state doesn’t have this law, you are responsible for collecting and remitting the tax yourself.

Does Amazon Handle ALL Sales Tax Compliance?

No. Even if Amazon collects and remits tax in some states, sellers must still handle:
Sales tax registration: Even if Amazon collects in some states, you may still need to register for a sales tax permit.
Filing returns in certain states: Some states still require sellers to file sales tax reports, even if Amazon collects on their behalf.
Other sales channels: If you sell through Shopify, your own website, or other platforms, you need to track sales tax separately for those channels.
Exemption certificate management: If you sell tax-exempt products or to tax-exempt buyers, Amazon doesn’t handle these for you.

Where Does Amazon Collect and Remit Sales Tax?

Amazon collects and remits sales tax in states with Marketplace Facilitator Laws, which include most U.S. states. The most up-to-date list can be found on Amazon’s help page:
Amazon Marketplace Tax Collection States

What Should Amazon Sellers Do?

Check where Amazon collects tax for you and where you still need to handle it manually.
Register for a sales tax permit in states where you have nexus but Amazon doesn’t collect for you.
File sales tax returns where required—even if Amazon collects the tax. Some statesrequire sellers to file a zero-dollar return.
Automate sales tax tracking using tools like TaxJar or Avalara.