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Amazon Integration with TaxJar

How TaxJar connects to Amazon, what data flows between them, and crucially -- what Amazon already handles that TaxJar takes credit for.

How the Connection Works

  1. One-click connection from TaxJar dashboard using your Amazon Seller ID and MWS Auth Token
  2. On initial connection, TaxJar back-imports all sales from January 1 of the current year
  3. After setup, Amazon transaction data syncs to TaxJar daily (automatic)

Data Flow: Amazon -> TaxJar

TaxJar pulls the following from Amazon:

  • All order transactions (revenue, tax collected, shipping, product details)
  • Refund transactions
  • FBA fulfillment center locations (creates physical nexus indicators)
  • Marketplace facilitator tax amounts (what Amazon collected/remitted on seller's behalf)

What TaxJar Does That Amazon Does NOT

Amazon, as a marketplace facilitator, collects and remits sales tax in all 45 US sales tax states. However, Amazon's built-in system has these gaps:

1. Amazon Does NOT File Sales Tax Returns for Sellers

Many states require sellers to file returns even when Amazon collected the tax as facilitator. TaxJar handles this filing via AutoFile.

2. Amazon Does NOT Track Your Nexus Obligations

If you use FBA, your inventory is distributed across Amazon's warehouse network in multiple states, creating physical nexus. TaxJar monitors where your inventory sits and tracks the resulting filing obligations.

3. Amazon Does NOT Consolidate Multi-Channel Data

If you sell on Amazon + Shopify + your own site, TaxJar combines all channels into unified state-by-state reporting. Amazon only knows about Amazon sales.

4. Amazon Does NOT Prevent Double-Payment

TaxJar's "Expected Sales Tax" report separates marketplace-facilitated tax (already remitted by Amazon) from seller-responsible tax, preventing double remittance when filing.

5. Amazon Does NOT Alert About Non-Amazon Nexus

No economic nexus monitoring for sales outside the Amazon marketplace.

The FBA Physical Nexus Problem

When a seller enrolls in FBA, Amazon distributes inventory across its fulfillment center network. Key facts:

  • Amazon has fulfillment centers in 25+ states
  • Inventory stored in a state creates physical nexus in that state
  • Some states treat this physical nexus as creating an independent filing obligation
  • TaxJar tracks which FBA warehouses hold your inventory and flags resulting obligations
  • This is a genuine compliance gap that Amazon does not address

Key Takeaway for Our Replacement

For an Amazon-only seller, the main value TaxJar provides is:

  1. Filing automation (filing $0 or marketplace-collected amounts)
  2. Nexus monitoring (especially FBA warehouse tracking)
  3. Multi-channel consolidation (only relevant if selling elsewhere too)

The tax calculation itself is already handled by Amazon for marketplace sales.

Sources