Amazon FBA Sellers Win in Sales Tax Battle

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A court ruled in favor of Amazon sellers on Friday in a dispute over their obligation to pay Pennsylvania state sales tax simply because they used Amazon’s FBA fulfillment service, resulting in storing some of their inventory in state Amazon fulfillment centers.

The Online Merchants Guild had filed a lawsuit for declaratory and injunctive relief last year regarding Pennsylvania Department of Revenue requests asking merchants to register with the Pennsylvania Department of Revenue based on their participation in the FBA program. from Amazon.

Online Merchant Guild Director Paul Rafelson told EcommerceBytes on Friday, “The Pennsylvania Commonwealth Court today ruled that FBA was not a large enough presence to subject sellers to tax.”

In its opinion, the court said the key issue before it was whether non-Pennsylvania businesses that sell goods through Amazon’s FBA program must collect and remit sales tax in Pennsylvania.

“After careful review, we find that Revenue has not provided sufficient evidence that non-Pennsylvania businesses selling goods through the FBA (FBA Merchants) program and whose ties to the Commonwealth have been found to be limited only to stocking goods by Amazon. at one of Amazon’s Pennsylvania warehouses, have sufficient Commonwealth contact so that the tax authorities can require them to collect and remit sales tax or pay IRP pursuant to Sections 237(b)( 1) and 302(b) of the Internal Revenue Code.

A law firm wrote more about the case on its state and local tax blog.

Rafelson seemed cautiously optimistic about the decision’s impact on disputes with other states, telling EcommerceBytes, “Fundamentally, all of this tax nonsense of the past five years, and even into the future, was wrong and unconstitutional.” Of course, this is a state decision, but it is a first state decision.

Ina Steiner

Ina Steiner
Ina Steiner is co-founder and editor of EcommerceBytes and has been reporting on e-commerce since 1999. She is a widely cited authority on marketplace selling and is the author of “Turn eBay Data Into Dollars” ( McGraw-Hill 2006). His blog was featured in the book “Blogging Heroes” (Wiley 2008). She is a member of the Online News Association (September 2005 – present) and Investigative Journalists and Editors (March 2006 – present). Follow her on Twitter at @ecommercebytes and send topical tips to [email protected] See disclosure at EcommerceBytes.com/disclosure/.
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