What Does California’s New Amazon Fulfillment Center Mean for Online Sellers?

by Mark Faggiano

Amazon Fulfillment Center

Amazon just announced their fifth fulfillment center in California. This one will open up in Redlands in San Bernadino County. It joins another fulfillment center in that county, but says, Amazon, this one is designed to ship large items like television and kayaks.

That’s great news for Amazon, but what does the new California Amazon fulfillment center mean for online sellers?

Heightened Chance of Sales Tax Nexus

Even if you don’t currently have nexus in California, Amazon may ask you to route shipments to this new fulfillment center. Sellers who source and sell large items should especially be on the lookout for a new ship location. If you don’t currently have nexus in California but expect you might soon, learn more about collecting sales tax in California here.

Fulfillment Centers Expanding

No one can dispute that Amazon’s FBA program is growing by leaps and bounds. The eCommerce giant only built their first fulfillment center in California two years ago, and now they’re about to open #5. Be on the lookout right here at the TaxJar blog for news of more fulfillment centers (and thus more states where a FBA seller might find herself with sales tax nexus!)

More Marketplace Fairness Act Pain

Most online sellers already know and dread the Marketplace Fairness Act (MFA). This would-be law would mean that many sellers – whether they have sales tax nexus in a state or are considered “remote sellers”  — would have to collect sales tax on purchases and file sales tax returns with each state.

But if the MFA passes, Amazon will no longer be required to negotiate sales tax deals with the individual states. This will mean that they can branch out into almost any state in the union, giving online sellers “sales tax nexus” whiplash.  It will be harder to determine whether you have sales tax nexus in a state or are a remote seller. And that could change month to month as Amazon builds more fulfillment centers and directs sellers to ship to more states.

What do you think? Will this new California fulfillment center affect your Fulfillment by Amazon business?  Start the discussion in the comments.

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