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Tax Amnesty Program - How Amazon sellers can benefit from it?

January 24, 2018

The tax amnesty program supports the Amazon FBA sellers, Ebay and other online marketplace for sellers to become fully tax compliant without facing any fines or penalties. International sellers can also engage in this program if they have built sales tax liability in the past.

It is actually advantageous for both the states and the sellers because once they’ve registered to this program; they will be provided with a legal sales tax permit and can begin paying the sales tax for their online business. The states will not ask for the taxes prior to the last years that it was not collected. The program actually started on August 12, 2017 and would end on November 1, 2017, All Saints day.

The people who are not eligible to this program are the ones who had been submitting their taxes applicable on their state. But they are eligible for income/franchise tax amnesty program. Those people who have the National Nexus Program do not need to join this program as well. The nexus program has a disclosure program which gives its members the liberty to disclose anonymously their liabilities during the last years into a program member state in reciprocation for the state to limit the number of years that the taxes are long due.

The following states that are participating in the tax amnesty program are:

  • Alabama
  • Arkansas
  • Colorado Connecticut (Amazon state)
  • Florida (Amazon state)
  • Idaho
  • Iowa
  • Kansas (Amazon state)
  • Kentucky (Amazon state)
  • Louisiana
  • Massachusetts (Amazon state)
  • Missouri
  • Minnesota (Amazon state)
  • Nebraska
  • New Jersey (Amazon state)
  • North Carolina
  • Oklahoma
  • Rhode Island
  • South Dakota Texas (Amazon state)
  • Tennessee (Amazon state)
  • Utah (upcoming Amazon state)
  • Vermont
  • Washington DC
  • Wisconsin

These participating states will cooperate with Multistate Tax Commission (MTC) Voluntary Disclosure Program. It is an intergovernmental tax agency in the United States.

Their advocate is to promote uniformity in sales tax laws for anyone who owns a business. If you are interested to apply in this program, you can fill out the form “Multistate Voluntary Disclosure” paperwork from the Multistate Tax Commission. Once you fill that up, they will be in contact with your state to assist you to be able to cooperate in the Tax Amnesty Program. Make sure to remember not to participate in each state. 

They will require you to provide an estimate amount of your taxes from the previous years but you have to be clear and give the most accurate information even if it’s not an exact amount. If you want to learn more about this new program, you can talk to a trusted tax advisor or visit the sales tax amnesty and MTC Online Marketplace Seller Voluntary Disclosure Initiative websites. It will be great to be informed and equipped with knowledge for you to fully understand your obligation in paying your tax.

This is a rather big change both with the state and the seller. According to Hercalitus, “The only thing that is constant is change.” Our world grows rapidly and technology advances. Even in the prehistoric times, men learned to adapt to any change in their environment and society. Still, the decision is up to the sellers.