For US orders, Amazon sales tax for sellers is mostly handled by Amazon: under marketplace facilitator laws, Amazon calculates, collects, remits and refunds sales tax on third-party orders shipped into the states that enacted those laws, and Amazon’s Seller Central FAQ states that all US states with a sales and use tax had enacted them as of January 1, 2023 (checked 2026-10-01). What that does not settle is whether you still need a state registration, still file returns, or still owe a different tax such as a gross receipts tax. Those answers come from each state’s tax agency, not from Amazon.
This guide works through four gates: collection, registration, non-sales taxes, and filing. Sales tax software is compared in TaxJar alternatives; federal income reporting is in Amazon FBA taxes and Form 1099-K.
This article is general information, not tax advice. State rules change and depend on your facts; confirm your position with the state tax agency linked below or a qualified tax professional.
How Amazon Marketplace Facilitator Sales Tax Works
A marketplace facilitator law moves the duty to collect and remit sales tax from the third-party seller to the marketplace. Amazon’s customer help page Marketplace Tax Collection puts it this way: “As the marketplace facilitator, Amazon calculates, collects, remits, and refunds sales tax on third party sellers transactions destined to states where this legislation is enacted.” (checked 2026-10-01).
Amazon’s seller-facing US Marketplace Tax and Regulatory Fee Collection FAQ (Seller Central help page G7VYHGJ8ZT2M58CP, read 2026-10-01) adds the operational detail that matters to sellers:
| Question | What Amazon’s FAQ says (checked 2026-10-01) |
|---|---|
| What is covered | Sales and use taxes and/or regulatory fees on products shipped to buyers in jurisdictions (state, county, city, district) that enacted these laws |
| Who calculates the tax | Amazon, using the listing’s product category and item description; your own tax settings and product tax codes are not used when Marketplace Tax Collection applies |
| Does it depend on your size or location | No: “sellers agree to automatic MTC irrespective of their location, volume, or quantity of sales” |
| Can you opt out | “No, there is no option to opt out.” |
| Non-US sellers | Yes, it applies; the rules follow where the buyer is located |
| Fee for this | Amazon does not charge the Tax Calculation Service fee on Marketplace Tax Collection calculations |
Two terms appear in reports. Marketplace Tax Collection (MTC) is tax Amazon collects and remits itself. Tax Calculation Service (TCS) is an optional Professional-plan service: tax is calculated with your settings, paid out to you, and you remit it. Since 2023, TCS matters only for orders and products outside MTC.
Where Collection Stops: The Documented Exceptions
“All states with a sales tax” is not the same as “every tax on every order.” Amazon’s own pages list the gaps (checked 2026-10-01):
| Gap | What Amazon says |
|---|---|
| Colorado home rule cities | State legislation “does not include Colorado home rule city sales and use tax on third party sales when the city has not adopted an applicable marketplace facilitator ordinance” |
| Alaska | Amazon lists Alaska (effective 4/1/2020) but points to the Alaska Remote Seller Sales Tax Commission (arsstc.org) for the municipalities that enacted marketplace collection; the FAQ names “some Alaska cities and boroughs” among local jurisdictions where state laws do not apply |
| Alabama rentals | “MTC also does not apply to rentals in Alabama”; Alabama has a separate rental and leasing tax |
| New York services | New York marketplace collection “applies only to tangible personal property”; taxable services are excluded |
| Whole-order regulatory fees | Fees that apply to the whole order, such as the Colorado Retail Delivery Fee, are not shown in your order, transaction or payments reporting |
The states absent from Amazon’s list of marketplace facilitator states are Delaware, Montana, New Hampshire and Oregon. Amazon’s list does include the District of Columbia and Puerto Rico.
For any gap that applies to you, the FAQ is explicit: “Sellers are responsible for their tax calculation, collection, and remittance obligations on sales of products to a buyer in a non-MTC jurisdiction, regardless if supported by our service.”
Gate 1: Does Amazon Collect on This Order?
For most sellers of physical products, the answer is yes, and it can be checked order by order. Amazon’s FAQ says MTC amounts are labelled in order detail pages and payments reporting as “Marketplace Facilitator” or “Amazon”, and that amounts deducted from an order appear as “Marketplace Withheld Tax,” “Marketplace Facilitator Tax,” and/or “Marketplace Facilitator Regulatory Fee.”
Answer Gate 1 as “no, or not fully” if you:
- rent or lease items to Alabama buyers, or sell services into New York;
- ship into a Colorado home rule city or an Alaska municipality that has not joined marketplace collection;
- see tax disbursed to you with your order earnings instead of withheld. Amazon’s FAQ says any tax “not deducted for MTC is disbursed to you with your normal order earnings for you to remit to the appropriate tax authority.”
If Gate 1 is “yes” for every order, sales tax collection on Amazon is not your job. Gates 2 to 4 still apply.
Gate 2: Do You Still Need a State Registration?
There is no single rule. Some states say an Amazon-only seller need not register; others require registration anyway. Examples from state agency pages, checked 2026-10-01:
| State | Marketplace-only seller position (state agency wording) | Source |
|---|---|---|
| California | “you as a marketplace seller are not required to be registered with CDTFA for a seller’s permit or a Certificate of Registration – Use Tax if all of your retail sales of merchandise will be facilitated by a marketplace facilitator that is registered as a retailer with CDTFA” | CDTFA |
| Virginia | “If all of your sales in Virginia are conducted through a marketplace facilitator’s platform, you generally do not need to register to collect Virginia sales tax.” | Virginia Tax |
| Texas (remote seller) | “Remote sellers that only sell through a marketplace provider that has certified they will collect sales and use tax on your behalf are not required to hold a Texas tax permit.” | Texas Comptroller |
| Texas (Texas seller) | “you are still responsible for having a Texas tax permit and filing your sales and use tax returns timely” | same page |
| Washington | No sales tax collection needed with proof the facilitator collects, but “You will still file and pay your B&O and other taxes if you meet a registration threshold.” | Washington DOR |
Three facts change the answer:
- Your home state. Texas shows that being based in a state can require a permit even when every sale goes through Amazon. Check your home state first.
- Sales outside Amazon. Virginia says that if you also sell to Virginia customers through your own website and meet its remote seller threshold (“more than $100,000 in annual gross retail sales or 200 or more transactions”), you must register to collect tax on those direct sales. California says marketplace sales are included when you test for economic nexus.
- FBA inventory. Whether inventory held in a fulfillment center creates physical presence is a state-by-state question. Illinois answers it directly: “If the inventory is used strictly to fulfill orders made over the marketplace, the inventory does not create physical presence nexus for you.” Inventory that also fulfils your own sales does create it. Check each state where Amazon stores your goods.
Gate 3: Do You Owe a Tax That Is Not Sales Tax?
Marketplace collection covers sales tax and certain regulatory fees, and nothing else. Amazon’s FAQ says: “Amazon is not responsible for filing taxes on your behalf, including any income or gross receipts taxes that may be due on your sales into a state.”
Washington is the clearest example. Its Department of Revenue says a marketplace seller must register if it “Has more than $100,000 in combined gross receipts sourced or attributed to Washington” or is organized or commercially domiciled there, and report marketplace and direct sales under Retailing B&O (checked 2026-10-01), whoever collected the sales tax.
Income tax is a separate system; see Amazon FBA taxes and Form 1099-K, and for entity setup, do you need an LLC for Amazon FBA.
Gate 4: Filing and Reconciling Amazon-Collected Tax
If Gate 2 left you registered anywhere, you file returns there, and you need to show that Amazon-collected tax is not yours to remit. Amazon’s help page Sales tax information in seller reports (G201706680, read 2026-10-01) describes three reports in the Tax Document Library for Professional sellers:
| Report | What it shows | Amazon’s caution |
|---|---|---|
| Sales Tax Calculation Report | Tax calculated on your orders under your own tax settings | Useful “when you are remitting sales tax” |
| Marketplace Tax Collection Report | Sales tax Amazon collected and remitted for orders into MTC states | “Do not use this report to remit sales tax.” |
| Combined Sales Tax Report | Both of the above | “Do not use this report to remit sales tax.” |
Individual-plan sellers do not get these sales tax reports, but Amazon says their other order reports still include Marketplace Tax Collection amounts. Plan differences are covered in Individual vs Professional plan.
How the Amazon sales go on a state return also varies, and states do not all agree:
- Washington: report gross sales, then “Take a deduction for your facilitated sales” using the “Gross Sales Collected by Facilitator” option on online returns.
- Illinois: “Sales made through a marketplace that is collecting and remitting taxes for you are not reported on your Form ST-1.” Its FAQ adds: “Just leave these sales off Form ST-1.”
- Texas: sellers “must keep required records of your marketplace sales for at least four years.”
Amazon notes you “may continue to have a reporting obligation” for MTC amounts it collected, and leaves refunds of double-remitted tax to you, your tax advisor and the state. Keep monthly exports of the Marketplace Tax Collection Report with your books; see Amazon FBA bookkeeping.
Common Mistakes
- Treating “Amazon collects” as “I have no state obligations.” Home-state permits, B&O-style gross receipts taxes and off-Amazon sales all survive marketplace collection.
- Remitting tax Amazon already remitted. Amazon marks the MTC and Combined reports “Do not use this report to remit sales tax.”
- Ignoring listing categories. Amazon decides taxability from your category and item description.
- Assuming Amazon sales don’t count toward nexus. California counts them in its economic nexus test; other states differ.
- Reading net payouts as gross sales. Amazon’s fees and withheld tax make your deposits smaller than your gross; see Amazon seller fees for what comes out before payout.
Checklist
- Confirm the Marketplace Facilitator Tax lines in a recent payments report cover your orders (Gate 1).
- List every state where you are based, sell off Amazon, or have FBA inventory.
- For each, read the state agency’s marketplace seller page and note: register or not, file or not, any gross receipts tax.
- Flag exceptions: Colorado home rule cities, Alaska localities, Alabama rentals, New York services.
- Export the Marketplace Tax Collection Report monthly and keep it with your returns.
- Review listing categories and your business and ship-from addresses in Seller Central.
- Hand the list to your accountant; ecommerce accountants for Amazon sellers covers how to choose one.
Frequently Asked Questions
Does Amazon collect sales tax for sellers in every state?
Amazon’s Seller Central FAQ states that all US states with a sales and use tax enacted marketplace facilitator laws as of January 1, 2023 (checked 2026-10-01). Local exceptions remain, including Colorado home rule cities, some Alaska municipalities, Alabama rentals and New York services.
Do I need a sales tax permit if I only sell on Amazon?
It depends on the state. California and Virginia generally do not require one for marketplace-only sellers, Texas requires one if you are a Texas seller, and Washington may require B&O registration above $100,000 in gross receipts (all checked 2026-10-01).
Can I opt out of Amazon marketplace facilitator sales tax collection?
No. Amazon’s FAQ says “there is no option to opt out” and no option to restrict sales to destinations for tax reasons.
Should I include Amazon sales on my state sales tax return?
Some states require it with a deduction (Washington) and others say to leave them off (Illinois Form ST-1). Follow the instructions for the specific return.
Conclusion
Marketplace facilitator laws moved sales tax collection on Amazon orders to Amazon in every US state with a sales tax. Registration, returns, gross receipts taxes and off-Amazon sales still sit with you, state by state. Work through the four gates, keep the Marketplace Tax Collection Report as evidence, and take the list to a tax professional. For a second walk-through of the collection mechanics, see Amazon FBA sales tax: what you need to know.