Amazon and Etsy already collect sales tax on my sales. Am I done?
Yes, Amazon and Etsy collect and remit sales tax on sales made through their platforms. That’s the marketplace facilitator law at work, and it’s real. But no, that doesn’t mean your sales tax obligations are completely handled.
Marketplace facilitator laws require platforms like Amazon, Etsy, and eBay to collect and remit sales tax on transactions that happen on their marketplace. This is true in most states. For sales that go through the marketplace, you’re generally covered on the collection and remittance side.
Here’s where sellers get tripped up.
If you sell through your own website, sales tax collection and filing is entirely your responsibility. That Shopify store or WooCommerce site isn’t a marketplace facilitator. When a customer buys directly from your site, you need to determine if you owe sales tax in their state, collect it if so, and file returns with those states. The marketplace handling your Amazon and Etsy sales doesn’t touch these transactions at all.
Registration and filing obligations can exist even when your tax due is zero. In some states, once you cross economic nexus thresholds, you’re required to register. Many states count ALL your sales toward those thresholds, including marketplace-facilitated ones. And once registered, you may need to file returns every period even if the marketplace already remitted the tax. These zero-due returns confirm no additional tax is owed. Missing them can trigger penalties.
Not all states have identical rules. Thresholds vary. Some states have specific exemptions. The rules also change over time, so what was true last year may need to be verified now. ClearLedgers® works with e-commerce sellers across Georgia and South Carolina through small business bookkeeping services designed for the realities of selling online.
The trap is assuming the marketplace closed the loop when it only closed part of it. A seller running strong on Amazon might assume they’re fine, then launch a Shopify store and make sales for two years before realizing they’ve accumulated liability in multiple states. By the time they discover it, they’re dealing with back taxes, penalties, and interest.
If you’re selling on marketplaces and through your own channels, or if you’re not sure whether your registration and filing obligations are covered, our sales tax management service keeps track of where you have obligations and handles the filings so nothing slips through while you focus on selling.
Book a consultation and let’s review where you stand.
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