United States

MTC nexus program extends limited-time amnesty for Amazon retailers

Does inventory held in FBA distribution channel create nexus?


The Multistate Tax Commission Nexus Committee has agreed to extend the application deadline for submitting requests to enter the Marketplace Sellers Amnesty program from Oct. 17, 2017 to Nov. 1, 2017. The amnesty program is intended for those sellers making sales through a marketplace that do not have a physical presence in the state and who 1) uses the “Fulfilled by Amazon” (FBA) platform (or similar program) for distribution of product to a state, or 2) have other nexus-creating activities performed by the marketplace provider/facilitator on behalf of the online marketplace seller in the state.

Under the FBA program, retailers who market and sell their products through Amazon.com also utilize Amazon to fulfill packaging and shipment of their inventory to the ultimate purchaser. The retailers maintain ownership of the inventory through completion of the fulfillment process. However, Amazon controls the inventory and may subsequently relocate the inventory to warehouses throughout the country based on sales metrics and shipping logistics. Accordingly, the presence of inventory in a state will generally establish state tax nexus for the retailer, regardless of whether the retailer intended or has knowledge of the inventory movements.

Please see the original article, MTC nexus program offers limited-time amnesty for Amazon retailers, for further details.


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