Amazon Warehouses Can Still Create Nexus

You read that correctly. Amazon warehouses CAN still create nexus, even after Amazon begins collecting taxes. It may not matter if you are only selling through marketplaces. If you have sales through your own website, Shopify, WooCommerce, BigCommerce, etc., or even if you sell by phone, by catalog, or any other channel, it will generally continue to create nexus and a responsibility to collect and remit tax regardless of whether you exceed the economic nexus thresholds. So how do you keep track of where these warehouses are located? What do you do about it if you are selling on other platforms, and how do you start trying to mitigate this risk? 

In order to tell if you have a potential problem with exposure, it’s important to go back and start looking at dates. How long have you had inventory in Amazon warehouses? How long have you been selling on other platforms? Are you meeting economic thresholds from state to state?

Start where your potential exposure is greatest

Our advice here at Sales Tax and More is to start where your potential exposure is greatest. If you’ve had inventory in a particular warehouse for the past seven years, your economic nexus will be greater than in a state where you’ve only had inventory for the past 15 months. 

Do I need to worry about sortation centers? 

Sortation centers do not create nexus; however, the warehouse where your inventory is stored does. The Amazon fulfillment center is what we are worried about. 

Take a look at our Amazon Fulfillment Center chart

We did some of the hard lifting for you and created a chart listing where the current Amazon fulfillment centers are located. You can check it out here. It’s good to keep in mind that a chart is a good place to start. Specific questions require specific answers and taking the time to make sure you get those specific answers always pays off. 

It can be complicated trying to understand the complexity of the sales tax world. We are always here to help and offer many services and resources to help get you where you need to go. We have helped our clients navigate through the sales tax world so they can rest easy. Feel free to contact us at contact@salestaxandmore.com.

By: Ellie Moffat

This blog is intended for educational purposes and not as tax advice. Tax policies and procedures change frequently, so specific information, such as thresholds, rates, etc. included in this blog may have changed since it was originally published. Please request a consultation for more in-depth information.