Amazon

How to Find Where Amazon FBA Gives You Sales Tax Nexus

by Georgene Harkness

Amazon FBA Sales Tax Nexus

One of the reasons so many people are comfortable purchasing from Amazon – and thus from you and me – is because they know they can get their order in two days with Prime, or even less in some cases. But there’s a catch! The only way Amazon can deliver on this promise is to distribute products country-wide before the customer orders it.

Having your merchandise stored in several states can be a huge problem, though, when it comes to sales tax compliance. After all, if you don’t know where your merchandise is, how can you know where to register for your permit to collect sales tax?

Amazon reports to the rescue! You must be a Pro Seller to collect sales tax on Amazon, and that matters because Amazon’s reports are much more comprehensive for Professional Sellers than they are for individual sellers. In addition, spreadsheet functionality discussed below should be the same or similar between Excel, Google Drive, Open Office and Numbers if you have a Mac.

Amazon Fulfillment reports will tell you where your inventory has been stored for any given period of time. To see this report, go to:

  1. Seller Central
  2. Reports
  3. Fulfillment

Your Inventory Event Detail will help you determine where your inventory has been stored.

Pull your Amazon FBA Inventory Report

The Amazon Inventory Event Detail report has a lot of information in it, but you should download the report, rather than try to read it on screen. Choose the Download tab and pick the time period that is of interest to you. If you want to determine states where you have nexus, you should select the date you first started selling on Amazon. This is available through the exact date option on the report. For testing, I chose November 1, 2012 to today, although the data is generally 24 hours old. You will need to wait a few minutes until the report is generated.

How to Pull Your Amazon FBA Inventory Report

Once your report is ready, download it to your local computer. It will be in a .txt file, and you can either load it into Excel, or open the .txt file, Select All, Copy, and Paste into your spreadsheet. The list of Fulfillment Centers lies that have housed your inventory lies under the “fulfillment-center-id” column. This is where your nexus lies, and where you’re required to collect sales tax.

Once you have opened your Inventory Event detail, it will look something like this:

How to Find Out Which Warehouses Amazon FBA Stores Your Goods In

The column that we want to look at is the fulfillment-center-id. So, in your worksheet, click on the top row of the fulfillment-center-id column and choose the filter symbol, either in the ribbon or on your Quick Access Toolbar, and that will put a down-arrow in the top row of your worksheet.

What warehouses does Amazon FBA store my products in?

Once you have used the filter command, just click on the down-arrow, and you will be presented with a list of Fulfillment Centers where your inventory has been. This can be a LOT!!!

Pull your Amazon FBA Inventory Report

You now have a list of every Fulfillment Center where product has been stored. If you see any Fulfillment Centers you didn’t expect, then uncheck the (Select All) button and check only the buttons that are questionable to you and the only the products that are stored in those FCs will appear. That’s simply for your information, though – you really need to know every active Fulfillment Center for your inventory.

You may be asking: how do I know what Fulfillment Center is indicated by those letters and numbers? The Fulfillment Centers have been designated by the closest airport. So, “DFW” means Dallas Fort Worth Airport, which is Texas, of course, and CHA means Chatanooga, TN, which means you have inventory stored in Tennessee! The numbers after the three-letter airport designation means that there is 1, 2, or 3 (or more) centers near that airport hub. Here is a link to a webpage that lists every airport alphabetically by code and state. And here’s a list of the locations of all Amazon Fulfillment Centers.

Once you have identified all the states where your product has been stored, it’s a simple matter to log in to TaxJar and check the detailed tax analysis report which is linked from your Dashboard.

TaxJar Dashboard

On your Detailed Sales Tax Analysis page, you can easily choose the time period you want to look at to see where most of your sales occur. Use the information you learn here in conjunction with the nexus information you just gleaned from your Inventory Event detail report, to see where you need to either start collecting (if you haven’t already), or add states that you didn’t know you were active in.

Increasing your knowledge about your own tax situation is a positive step toward taking control of your business, and between Amazon Fulfillment Reports and TaxJar’s Detailed Sales Tax Analysis Page, the task can be much easier than it seemed at first.

Finally, for a quick tutorial on how to set up sales tax collection on Amazon, check out this video:

  • TJ

    Hi Georgene. When I called Amazon to determine where my inventory was located, they told me to use the “daily inventory history” tab instead of “inventory events detail.” When I compare the data, I get differing locations. I would assume the daily inventory history is more accurate because it determines exactly your products locations whereas inventory events details seem to only measure the warehouse transfers. The quantity column does not actually tell you how many of those items you have. For example, when I saw a -1 I thought it meant an item that was either moved or sold but when I searched my catalog it was still active and in stock. Perhaps you should double check with Amazon because this makes a difference, especially when you start out a small seller like myself and you don’t have nexus in all the Amazon states.

  • Georgene6767

    Hi, TJ, and thanks for your comment.

    I disagree with the answer you got from Amazon, but let me explain why.

    In order to determine nexus, we don’t need to know where your inventory is located TODAY, which is what the Daily Inventory History tells you, nor do we care what the quantities are at each fulfillment center. We need to know where inventory has EVER been stored. That is why the Inventory Events Detail is what we need, instead of the Daily Inventory History.

    Here’s an example: Pretend for a minute that you had inventory stored at PHX7 for, say, 4 months, from January through April of this year. I think most of us would agree that this qualifies you for nexus in Arizona. Now, pretend for a minute that for any reason, Amazon has decided to quit sending your inventory to PHX7, and you have sold all the inventory you had stored there. You **still** have nexus, but the Daily Inventory History report for today will not show that Fulfillment Center on your report!

    Therefore, there will be a huge hole in your nexus and your sales tax reporting. Remember that once you have nexus in a state, you always have nexus there until you formally announce to the state that you are no longer selling there and have no inventory stored there. Since you never know when Amazon will capriciously decide to send your inventory back to Arizona, once established, you must retain nexus – and reporting – in Arizona as long as you are selling on FBA.

    I hope this helps explain why you need to use the Inventory Event Detail report instead of the Daily Inventory History.

  • ruben fern

    Hello if I live in a no state tax and sell something to someone that has a state tax how would the governmebt even know I sold to that state without reporting it?

  • You only have to collect sales tax in states where you have sales tax nexus. If you only have nexus in your state, and you live in a state with no sales tax, then you don’t need to collect sales tax from buyers.

    That said, if you do have nexus and don’t collect sales tax, then there are a number of ways state governments try to find you. They sometimes collaborate with online channels like Amazon to find out who is selling into their state. There are also rumors that they use form 1099-K to find this info. Basically, some states are more aggressive with enforcement than others, but they’re all trying to get more clever in coming after people with nexus in their states who aren’t collecting sales tax. It’s up to you as a business owner whether you comply or not.

  • WakeForestFan

    I have some questions. I live in NC. I have my sales tax number and my state has nexus. I’m sending in my first boxes. If I am sending my boxes in to three states (for example), should I wait to send the boxes to those locations and register for nexus in those states first or should I send them in and worry about that after the fact. How does that work?

    • Great question! You are technically supposed to have a sales tax permit before you collect sales tax in a state. We have a whitepaper on “when to register for a sales tax permit” that may give you some help. Here’s a link: http://offers.taxjar.com/sales-tax-permit

      I hope this helps!

  • Marco

    Hello,

    Does the transaction type column have any influence on deciding in which state to file for taxes? If a product is for example in a warehouse in Tennessee and has to go through a fba warehouse in texas to get to the end consumer, Do i have nexus in Texas also then?

  • Hi Marco,

    From our understanding, if the products are stored in a state long enough to meet that individual state’s threshold of nexus then yes, you then have nexus in that state and should register for a sales tax permit. Each state’s rules are different, but according to Texas: “a warehouse isn’t considered a place of business unless three or more orders are received at that location.” So if you’re just dealing with one order, then you may not have nexus. http://taxjar.wpengine.com/amazon-sales-tax-texas/

    That said, if the Texas facility is a “sortation center” and the item has already entered the “Stream of commerce” when it gets to Texas then our understanding is that single transaction won’t create nexus in Texas bcs the possession of the item has already transferred to the buyer. Here’s more about sortation centers and taxability: http://taxjar.wpengine.com/amazon-sortation-centers-create-nexus/

    I hope this helps!

    • Marco

      I find it all very confusing. How do i know if a warehouse is a sortation centre? So if a product is already sold and is only transported through another FBA wharehouse (transportation) there is no Nexus?

  • Brian Ellis

    This info is out of date. There is no longer an Inventory Event Detail button under the Inventory tab or anywhere else I can find. Do you know where to find this report now?

  • Hi Brian,

    It appears for us and a couple of other sellers we asked in our Facebook group. (Join here for eCommerce sales tax info! https://www.facebook.com/groups/SalesTax4EcommerceSellers/)

    They did say you have to click “Show More” to see the report. Also, I believe this report only shows up if you are a Pro Sellers, so that might also be the trouble. I hope this helps!

    • Brian Ellis

      Very odd. No Click More option, and we are Pro sellers. Thanks anyway.

    • Brian Ellis

      Figured it out and I’m a complete idiot. Thanks guys!

  • No problem at all! Amazon doesn’t make it easy!

  • Hi there,

    We have a list of Amazon Fulfillment Centers here: http://taxjar.wpengine.com/amazon-warehouse-locations/

    And Sortation Centers here: http://taxjar.wpengine.com/amazon-sortation-centers-locations/

    That said, your products will always be in a warehouse before they go to a Sortation Center. And it’s the warehouses, not the sortation centers, that give you sales tax nexus. I hope this helps!

    I know it’s confusing, so we’ve also put together a guide to Amazon FBA Sales tax here. This might help:

    http://www.taxjar.com/guides/sales-tax-guide-for-amazon-fba/

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  • Jeremy

    I’m not able to find it either – I also don’t have a ‘click more’ option.

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