Can Amazon Sellers Deregister for Sales Tax in KS and FL?

0:36 Kansas, you can deregister

Okay, let's talk about Kansas first. So before July 1st, I guess now it still applies, if you are a seller selling on Amazon, Amazon did not have an obligation to collect and remit sales tax on your behalf. But that's all going to change. On July 1st, Amazon will legally need to start collecting and remitting sales tax on behalf of their sellers.

They also come up with a threshold for economic nexus for remote sellers, which is a hundred thousand dollars. So before, if you've registered with Kansas Department of Revenue, either because you sell anything into Kansas, because they did not have a threshold of a hundred thousand dollars, the threshold was one dollar, so a lot of sellers registered because they just make a few sales into Kansas.

So either you registered because you made some sales but you don't actually hit the hundred thousand dollars threshold, or you're selling on Amazon and Amazon is collecting and remitting sales tax on your behalf.

1:45

Then the good news is you can deregister. And to deregister you just need to fill out form CR-108 and submit it to Kansas Department of Revenue, and they will close your account. So I will link the form below in the description, and you can go ahead and fill that out and send it to Kansas and they will close your account.

But just remember, what the agent told me is you can close your account as long as you have proof that Amazon or someone else is collecting and remitting sales tax on your behalf. So if you need a refresher on how to find that report, I'll link the video below where I walk you through an Amazon report which will show the tax collection responsible party. And as long as those show that Amazon is collecting for transactions going into Kansas on your behalf, and you're only selling on Amazon, then you are good to fill out form CR-108 and deregister with Kansas Department of Revenue.

2:55 Florida, and your three options

So that's Kansas. It's super good news. It's not so much of a good news in Florida, unfortunately.

When I talked to the agent with Florida's Department of Revenue, they said if you pass the economic nexus threshold, which is also going to be a hundred thousand dollars as of July 1st for the previous calendar year, or if you have physical inventory, meaning if you have FBA warehouses in Florida that's housing your inventory, then you legally have to register and pay sales tax to Florida. And if you've already registered you cannot deregister, if you pass the hundred thousand dollars of sales into Florida or if you use FBA to store your inventory.

3:42

But the silver lining is, since Amazon is going to start collecting for you in Florida starting July 1st, you will just need to file zero dollar returns. You will put all your marketplace sales as gross income and then take the same amount as deduction, so you arrive at a zero dollar liability.

And Florida has confirmed that if you file zero dollar returns for eight quarters, they will automatically deactivate your account.

Or another thing you can do as a seller that's solely selling on Amazon, and you just have to report these zero dollar information, is you can contact Florida's Department of Revenue at accountcreation@floridarevenue.gov, and I'll link their email address below as well, and request to give you a less filing frequency. So instead of you having to file zero dollar returns every month, explain the situation to them, tell them that Amazon is collecting on your behalf, and ask for a less filing frequency. See if they can switch you to semi-annual filer or even annual filer. So that's option two.

5:07

Option three is if you don't hit the hundred thousand dollars threshold, or you don't have a FBA warehouse so you don't have any physical inventory in Florida, you can deactivate your account in Florida. You can do that either by emailing the same email address, accountcreation@floridarevenue.gov, or you can do it on the website. So I'm going to show you how to do it on the website next.

5:36 Recap

But just to recap, for Amazon sellers that have previously registered with Kansas, you can deregister if you can prove that Amazon is collecting and remitting sales tax on your behalf, and it does not matter if you have FBA warehouses in Kansas or not.

But for Florida, if you pass the economic nexus threshold for a hundred thousand dollars, or if you have FBA warehouse in Florida, and you've already registered, you cannot deregister with Florida. You have to keep filing zero dollar account. You can request a change of filing frequency, or the system will automatically deactivate your account after eight quarters of filing zero dollar returns.

But if you don't pass the threshold, or if you don't have any inventory stored in FBA warehouses in Florida, you can deregister by either emailing or [unclear], or do it online yourself. And I'm going to show you how to do that.

6:45 How to deactivate online in Florida

Okay, so you will go to Google and just google Florida Department of Revenue. It'll take you to their home page. And then under general tax, on the left side there's quick links, and you'll click on update account information. They'll take you to a new page. You need to fill out information about your account, tax type, and then on section 5 is change your account status, and you'll choose the inactivate.

So that's how you change your account status for Florida online by doing that yourself, or you can send them an email. And then just submit when you're done. Very easy.

7:28 Questions and next steps

Okay, let me know if you have any questions about Florida or Kansas or any other marketplace facilitator states, and how to understand your risk as an Amazon seller when it comes to sales tax. I'm more than happy to help.

Again, if you enjoyed this video please share it, like it, so other people can have this information as well. And if you need our help you can always find us at ledgergurus.com. We're happy to help you with any ecommerce accounting questions or sales tax questions. Until next time, have a good day. Bye.