Overview

Amazon offers sellers the option to enroll in its tax calculation service, but this feature is tied directly to your selling plan type. If you're considering switching between a Professional and Individual selling plan, it's important to understand how that change will impact your tax settings, product tax codes, and reporting capabilities. Making a plan change without preparation could result in lost configurations or unexpected tax handling on your orders.

Key Points / What Sellers Need to Know

• Tax calculation requires a Professional plan — Amazon's tax calculation service is only available to sellers on the Professional selling plan ($39.99/month). Individual plan sellers cannot enroll in or use this service.

• Downgrading erases your tax settings — If you switch from a Professional plan to an Individual plan, your tax calculation enrollment is canceled and your saved tax settings, including product tax codes (PTCs) and jurisdiction configurations, are removed.

• Upgrading doesn't restore previous settings — When you upgrade back to a Professional plan, you'll need to re-enroll in the tax calculation service and reconfigure all of your tax settings from scratch. Amazon does not retain your prior configurations.

• Marketplace Tax Collection is separate — Amazon's marketplace tax collection (also known as marketplace facilitator tax) operates independently of your selling plan. Amazon automatically calculates and collects sales tax in states where it is required by law, regardless of whether you have a Professional or Individual plan.

• Tax reports may become unavailable — Downgrading to an Individual plan can affect your ability to access certain tax reports that were generated while you were on a Professional plan with tax calculation enabled.

How the Tax Calculation Service Works

Amazon's tax calculation service allows Professional sellers to configure state-by-state tax collection on their orders. Sellers can assign product tax codes to their listings, which determine the applicable tax rates based on product type and buyer location. The service handles the complexity of varying tax rules across jurisdictions, making it easier for sellers to stay compliant with state and local tax obligations. However, it's worth noting that in most U.S. states, Amazon now collects and remits sales tax automatically under marketplace facilitator laws, which has reduced the need for many sellers to configure their own tax settings.