I opened a store on Amazon, but I operate out of Ohio. I purchased cosmetic items wholesale and resell them on Amazon using Amazon's fulfillment warehouses. Amazon charges fees for storage, packing each item and by price and weight. What are my sales tax reporting obligations?

ANSWER

The BIDaWIZ Team's Answer:

You certainly still should be collecting sales tax on items you sell to customers located in Ohio as you have tax nexus in that state. It's also important to note that in the state of Ohio, cosmetic items are subject to sales tax when sold to a customer in Ohio. This is referenced in the Ohio sales tax code. Are you sure that Amazon hasn't been collecting sales tax on your behalf? You should be able to pull a sales report detailing any sales tax collected. The state sales tax rate in Ohio is 5.5%, but will be increasing to 5.75% in September. Also, don't forget about local sales taxes. The other very important component to note is the fact that you're part of the Amazon fulfillment program. While it's easier for you to manage, it technically means you have tax nexus in states in which you store your inventory in Amazon fulfillment centers. This means if you store it in a center in Texas, you have to collect sales tax for customers located in Texas. There's actually a big issue now, as many sellers using the fulfillment program may not be confirming to state sales tax regulations.