Amazon recently announced it would build it’s first Utah fulfillment center in Salt Lake City. The 855,000 square foot facility is slated to bring 1,500 jobs to the area.
For Amazon FBA sellers, this means one more potential state where you might have sales tax nexus in the future.
Amazon and Utah Make a Tax Deal
Back in January 2017, rumors swirled around a secretive tax deal between the state of Utah and Amazon. In March, the Utah State Tax Commission agreed, under pressure, to release details on the terms of the deal.
As it turned out, Amazon negotiated to receive the same 1.31% sales tax discount in-state Utah taxpayers receive for filing and paying sales tax on time. Perhaps the fact that Amazon soon planned to build a fulfillment center in Salt Lake City factored into the decision to treat the company as an in-state presence.
What to do if You Have Nexus in Utah
According to the Utah State Tax Commission’s Publication 37, “Retailers must collect and pay sales and use tax if they have or use an office, distribution house, sales house, warehouse, service enterprise or other place of business” in the state.
When the Utah Amazon fulfillment center is complete, you may find that you have sales tax nexus in the state if Amazon stores your inventory in Utah.
If this is the case, these are the steps to follow to become sales tax compliant:
1. Register for a Utah sales tax permit – Follow the instructions in our How to Register for a Sales Tax Permit in Utah post or contact a sales tax professional to help you register for your Utah sales tax permit.
2. Set up sales tax collection in Utah – Once you have nexus in Utah and are registered for your Utah sales tax permit, your next step is to make sure you are collecting sales tax on all shipments to Utah on all of the online shopping carts and marketplaces on which you sell. Here’s a quick video on how to setup your Amazon sales tax collection settings.
3. File Utah sales tax returns by the deadline – When you register for your Utah sales tax permit, you’ll be assigned a monthly, quarterly or annual sales tax filing frequency. Utah sales tax is due on the final day of the month after the taxable period ends. (For example: Your July Utah sales tax collected would be due on August 31, 2017). Be sure to report and file your sales tax returns on time, or better yet, let TaxJar AutoFile your Utah sales tax returns for you!
You can find more Utah sales tax resources for businesses here.
Do you have questions or comments about the new Utah Amazon fulfillment center? Start the conversation in the comments!