Online sellers that use the Fulfillment by Amazon (FBA) service received a troubling notification from Amazon that the marketplace platform has a valid and binding legal demand to provide detailed seller information to the Massachusetts Department of Revenue (the Department). This affects remote sellers that use the FBA service and store their inventory at Amazon fulfillment centers. Amazon indicated it would provide the following information to the state by January 26, 2018:
- Seller name, address, federal tax ID number and phone number
- Estimated value of seller inventory in the state’s fulfillment centers, calculated based on the seller’s selling price in late 2016 and 2017
This summons stems from a Massachusetts judge’s court order after Amazon refused to comply with the Department’s request to provide the seller information last fall. The Department filed a petition with the court to enforce the summons.
It’s speculated the Department will use this information to contact these sellers and send nexus questionnaires or audit notices. Remote sellers affected by this order are encouraged to preemptively evaluate potential sales tax liability in Massachusetts and may be able to participate in the state’s Voluntary Disclosure Program to limit look-back periods and waive penalties.
This bold step by Massachusetts to require sensitive seller information is a precedent that other states also may follow in the near future.
To learn more about this Amazon disclosure, its effects and possible remedies, contact Jana or your trusted BKD advisor.