Some Amazon 3rd party sellers received a notice from Amazon yesterday. According to the notice, a “binding legal demand” requires Amazon to turn over sales tax information about Amazon 3rd party sellers who use Amazon’s sales tax collection service to collect sales tax from North Carolina buyers.
Here is a copy of the notification:
What does this mean for Amazon sellers?
This notice is a bit different from some of the other instances where Amazon has shared information with the state. (To read more about that, see our posts about Amazon sharing seller info with Massachusetts and Amazon sharing seller info with Rhode Island.)
In this case, it appears that North Carolina only wants information about sellers who have already set up North Carolina sales tax collection in their Amazon settings. From this, we can infer that North Carolina’s Department of Revenue likely wants to double check that every seller who is collecting North Carolina sales tax is also filing a North Carolina sales tax return and remitting that sales tax back to the state. Collecting sales tax without remitting it is the cardinal sin of sales tax, and some states impose criminal charges for failing to file.
What if I collected sales tax from Amazon customers but did not remit the tax?
According to the North Carolina Department of Revenue, if it is found that a seller collected sales tax but did not remit the tax, they will first be subject to an audit and given the chance to remit the taxes they collected to the state’s Department of Revenue. If the seller does not respond, then the next step is having the case placed on the docket in criminal court. (Hopefully it wouldn’t come to that!)
If you are concerned that you collected North Carolina sales tax and did not remit it, we highly recommend speaking with a sales tax expert to help advise you how to proceed. You can find a vetted list of sales tax experts here.
Did you receive a notification that Amazon would share your personal information with the North Carolina Department of Revenue? How did you proceed? Start the conversation in the comments!