Taxes

You are responsible for identifying your business’ sales tax obligations and for correctly configuring your business’ sales tax settings. This article does not constitute tax, legal, or other professional advice. If you have questions, consult your professional tax service provider. Tax service providers can help you with identifying your business’ sales tax obligations and provide advice on how to configure your business’ sales tax settings.

When tax settings are applied to your business, sales tax is assessed and calculated for each shopper’s order based on the settings, tax rates, and override rules that you’ve configured. You can manage tax settings from the Settings tab of the merchant console.

Manage taxes

Use the merchant console to activate tax settings, add locations to specify where you need to collect taxes, configure how tax should be calculated for each location, create tax categories and tax override rules.

You can manage tax settings from the Settings tab of the merchant console. In Tax settings are tabs for General and Categories. Toggle on Apply taxes in the General tab, to view or set up Tax regions and access the Categories tab. If you need to apply and collect taxes on any of your Buy with Prime products, choose Apply taxes in the General tab. Then, configure which locations need to collect taxes by choosing Manage locations & overrides and then Manage locations. You can create tax categories in the Categories tab. You can create and manage tax override rules by choosing Manage locations & overrides and then Overrides.

Apply tax settings:

Note: Applying taxes does not automatically start calculating and charging taxes for your customers’ orders. You must specify which locations need tax calculation and collection.

Step 1 Open the merchant console.
Step 2 Choose Settings, and then Taxes.
Step 3 Choose Apply taxes.
Step 4 When prompted to apply taxes at checkout, choose Apply taxes.
Step 5 Choose Manage locations & overrides to begin adding locations where you want sales tax applied.

Add location:

Note: You need to add locations for every state where you need to charge sales tax on your store’s website. You can select more than one location at a time.

Step 1 Open the merchant console.
Step 2 Choose Settings, and then Taxes.
Step 3 Choose Manage locations & overrides.
Step 4 Choose Manage locations.
Step 5 Select locations where you want to apply taxes. You can choose up to as many as necessary. Confirm selection in the dialog box. Tip: You can use the search box to quickly find the location that you need to select.
Step 6 Choose Save changes.

Note: After you Confirm selection in the dialog box, your selected locations will be added to the Locations table.

Configure tax calculation method:

Note: For each location you add, you can configure settings for how tax should be calculated.

Step 1 Open the merchant console.
Step 2 Choose Settings, and then Taxes.
Step 3 Choose Manage locations & overrides.
Step 4 Select Change tax rate for a Location. If you are selecting more than one location to edit at the same time, check the box(es) next to each location, and choose Change tax rate.
Step 5 In the dialog box, select Auto if you want Buy with Prime to automatically apply the sales tax rate that’s calculated from a third-party service provider based on each order’s information. The tax rates that are calculated include state and local jurisdiction taxes.
Step 6 Select Manual and enter a tax rate in the provided text box if you want to apply a manual custom tax rate for the orders that are being shipped to addresses in that given state. The tax rate that you can manually enter can have up to four digits after decimal point.
Step 7 Choose Save.
Step 8 Choose Save changes.

Create tax category:

Note: Tax category allows you to group products that you would like to configure to follow the same unique tax rule. It’s your responsibility to understand how your products are taxed in the jurisdictions that you are responsible for collecting, filing, and remitting taxes.

Step 1 Open the merchant console.
Step 2 Choose Settings, and then Taxes.
Step 3 After applying Taxes, choose Categories.
Step 4 Choose Create tax category.
Step 5 Enter the General Information details, then choose Select products.
Step 6 Select products for the tax category, and then choose Save.
Step 7 Choose Create.

Note: The tax category you’ve set for a product will apply to all of its variations (such as size or color).

Create override:

Important: The Create override button will be inactive until you add at least one location and one tax category.

Note: After you create a tax category, you need to create an override rule so that the sales tax rate that you set for the override is used for the product(s) in the tax category.

Step 1 Open the merchant console.
Step 2 Choose Settings, and then Taxes.
Step 3 After activating Taxes, choose Manage locations & overrides.
Step 4 Choose Overrides, and then Create override.
Step 5 Select the location, tax category, and override rate, and then choose Create.
Step 6 Choose Save changes.

Tax service providers

Disclaimer: Buy with Prime is providing this tax service provider list solely as an informational resource. If you choose to retain a tax service provider, you will be contracting directly with that provider, which will be providing services to you at your direction. Buy with Prime does not endorse any tax service provider or their services.

The following tax service providers have experience working with ecommerce businesses:

For more information about tax service providers, go to the Amazon Service Provider Network.

FAQ

Yes, the business address you set up for your account is one of the inputs for tax calculation. Make sure you complete the setup process with a current and valid address. For example, make sure you enter a correct zip code. If the zip code you enter does not match the state, there will be an error at shopper order checkout. To find the business address that you have on file, go to Settings>Account details>Business details.

You can create and manage override rules for a tax category. You can add products that are subject to a tax exemption rule to the tax category, and then create an override. To add a tax category, go to Settings > Taxes > Categories. To add an override, go to Settings > Taxes > Manage locations & overrides > Overrides. Select the tax category, specify the location in which the override rule is applicable, and then enter the tax rate.

Yes, you can manually apply rates at a location level and product level. To apply overrides at a location level, go to Settings > Taxes > Manage locations & overrides. For the location that you want to apply manual rates, make sure that Manual and enter the tax rate in the provided text box. To apply overrides at a product level, go to Settings > Taxes > Manage locations & overrides > Overrides. For the tax category with the product that you want to apply manual rates, Add Override, select the location and enter tax rate, then choose Add. Choose Save changes.

As of August 2022, Buy with Prime has a feature to automatically apply certain tax rules for products you put in a category you set up and name as auto-clothing. To set up this category, follow these instructions:

Open the merchant console.
Choose Settings, and then Taxes.
After applying Taxes, choose Categories.
Choose Add tax category.
Enter the General information details with the category name as auto_clothing, then choose Select products.
Select your applicable general clothing and footwear products for the tax category, then choose Save.
Choose Add.

The following tax rules will be applied to products in the auto_clothing category:

In Massachusetts, the tax rate will be 0% for any amount of the price $175 or less and the automated rate for any amount of the price over $175.
In New York, the tax rate will be 0% for any product priced less than $110 and the automated rate for any product priced $110 or higher.
In Rhode Island, the tax rate will be 0% for any amount of the price $250 or less and the automated rate for any amount of the price over $250.

Disclaimer: Information on this page doesn’t constitute tax, legal, or other professional advice. Don’t use it as such. If you have any questions, consult your professional tax advisers. Note: This content was updated on 02/15/2023. Be sure to confirm the latest rules with the tax collection authorities.

No. Tax support resources don’t constitute tax, legal, or other professional advice. And any of the resources in merchant console or the knowledge center should not be used as such. Tax support and related information is strictly a resource to help you manage Buy with Prime tax settings. All tax-related questions beyond how Buy with Prime tax settings work, should be directed to your professional tax advisor.

You’re responsible for configuring taxes to be compliant with your tax obligations. It’s up to you and your business to decide whether you should set up taxes or not. To prevent not charging sales tax on orders that do need sales tax collection, remember to set up taxes before you launch the Buy with Prime widget. Note: Setting up taxes and activating your Buy with Prime orders to charge sales tax isn’t a mandatory step for merchants prior to launching Buy with Prime.