what is up Internet is Kevin back again
and today I'm going to be teaching you a
little bit about taxes on Amazon it's a
lot of good information out there and
obviously this isn't any legal or
official tax advice but I'm gonna break
down exactly what I understand about
Amazon FBA taxes and what you need to
understand as well alright so how taxes
work with Amazon is you establish what's
called Nexus and so basically Nexus is
just a fancy word for where you store
your physical inventory and so let's say
that you ship you a product to one FBA
fulfillment center and they redistribute
it around so Amazon has a report which
they call the inventory event detail
report and I'm going to show you guys
how to access that and it will show you
exactly where your inventory is and
that's how you establish Nexus alright
so what you do from here is head over to
reports fulfillment in an under
inventory you just head down to the
inventory event detail page go over to
download exact dates and then do the
entire calendar year so once you
download that I have an example here for
you guys just to make it a little bit
easier you highlight all of the data and
since it gives you it to you in kind of
a unpalatable format I usually like to
run a quick pivot table I'm and the main
things you're looking at here are the
fulfillment center ID and the quantity
right so what this does is it shows you
how many units of your inventory are
stored at which Amazon Fulfillment
setters so if we do a quick look over on
this we can see that you know we have a
lot of inventory over in California in
Oakland it looks like we have a lot of
inventory and oh and if you don't know
what one is called for example Ont 2
let's take a look at that so you all you
do is a quick Google search and it shows
you that this one is in San Bernardino
right so that's California so basically
you just do that summit where the most
of where the most of your inventory is
and then from there we are going to head
over to a website called tax jar all
right guys so I've set up a trial tax
jar just as an example to make things a
little bit easier to understand for
everyone so what this does it walks you
through setting up your account and
linking it to your Amazon account it's
pretty easy to do so what it's showing
you is the amount of state sales tax
that you owe based on the sales data
that it imports from your Amazon account
and so technically what you are supposed
to do is file a state sales tax return
for each state that you're selling
merchandise in and so this is not
particularly realistic so what I've
heard right this is a hypothetical what
I've heard is that people kind of base
which state returns they file on their
Nexus which is given to them by the
inventory event detailed page that I
showed you guys before right so let's
say that you have five hundred units in
Montana and you have you sold or you
have one unit in Ohio right so you you
probably aren't going to go through all
the trouble of filing a state return for
Ohio just for that one unit right so
take a look at the event detail page and
then you know make the choice about what
you feel comfortable with so technically
you are supposed to file for every state
that you are selling in all right and so
we've sold in all 50 states and so you
basically just have to make the decision
yourself about what you feel comfortable
with if you want to cover all your bases
and do it you know exactly right it's
gonna gonna take a lot more time it's
gonna cost a lot more but if it makes
you feel better then you know it's worth
it so that's kind of a that's kind of a
basic rundown of all the different tax
stuff there's really no other tutorials
out there on this because people just
necessarily don't understand it and they
don't want to be held liable but you
know I showed you guys you know these
are just examples obviously it's not
legal
vice but I hope this sheds a little bit
more light on you know how taxes work
generally for Amazon and so just to
summarize right so you have Nexus based
on where your inventory is kept you find
that from the inventory event detailed
page tax jar for I think it's like 20
bucks you can import an entire year of
sales data you can find what you owe in
sales tax for the different states based
on where you've sold and then you know
depending on whether or not you want to
establish Nexus in the state you live or
you know if you want to establish Texas
Nexus in the state where most of your
inventory is held then that's kind of
how you decide which state tax return
forms to file so definitely be checking
with your accountants and your CPAs
right like they they don't necessarily
understand this but if you you know
mention your Nexus you mentioned you
know paying sales tax where you've sold
show them a list of where your
inventories been held that really will
kind of give you a big boost in helping
them understand and get to the bottom of
ecommerce because you know not many CPAs
understand this stuff either so
hopefully this gives you a head start
guys and we will definitely see you next
time all right guys I hope that helps
shed a little bit more light on taxes
for Amazon it's definitely a complicated
subject so you know you want to do your
own research but I just wanted to give
you guys a kind of a head start of how
that you know me and some of my other
kind of serious sellers on Amazon
understand it and the steps that we're
taking to make sure that we're protected
and you know we're paying the taxes we
deserve but not getting killed or doing
you know too much crazy stuff when you
know nobody else is doing it so you got
to make your own choices definitely talk
to an accountant or CPA and explain some
of this stuff to them and if you guys
have any questions at all definitely
always reach out to me check out the
other videos definitely make sure you
check out the Facebook page and if it
was helpful to you subscribe guys and
we'll see you next time
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