Overview

Amazon's role in collecting and remitting sales tax in the United States is governed by marketplace facilitator laws that have been enacted across the country. This FAQ-style reference from Seller Central breaks down three critical tax concepts every Amazon seller should understand: Marketplace Facilitator (MPF), Marketplace Tax Collection (MTC), and Tax Calculation Service (TCS). Knowing how these mechanisms work—and which one applies to your transactions—is essential for staying compliant and avoiding costly tax filing errors.

Key Points / What Sellers Need to Know

• Amazon is a Marketplace Facilitator (MPF) — Under state laws, Amazon qualifies as a marketplace facilitator because it contracts with third-party sellers to facilitate the sale of physical goods, digital products, and services through its online marketplace.
• MTC means Amazon handles tax collection and remittance — In jurisdictions with marketplace facilitator laws, Amazon calculates, collects, remits, and refunds applicable sales and use taxes and regulatory fees on behalf of sellers directly to tax authorities.
• TCS is a seller-managed tax tool — The Tax Calculation Service is available to professional sellers who need to handle their own tax obligations. Taxes calculated through TCS are collected from the customer but disbursed to the seller, who is then responsible for reporting and remitting those taxes.
• Regulatory fees are separate from sales tax — Some jurisdictions impose additional regulatory fees on certain product categories, and these may also fall under marketplace facilitator collection requirements.
• The distinction between MTC and TCS directly affects your tax filing obligations — Understanding which mechanism applies to each transaction determines whether you or Amazon is responsible for remitting the tax.

How Marketplace Facilitator Laws Work

Marketplace facilitator legislation has been adopted by virtually every US state that imposes a sales tax. These laws shift the responsibility for sales tax collection from the individual seller to the marketplace platform—in this case, Amazon. When Amazon acts as the marketplace facilitator, it becomes the party legally required to calculate the correct tax amount, collect it from the buyer at checkout, and remit it to the appropriate state, county, city, or district tax authority. This applies to sales of physical property, digital goods, and certain services sold by third-party sellers through the Amazon marketplace. The goal of these laws is to ensure tax compliance on online transactions, particularly after the landmark 2018 Supreme Court ruling in South Dakota v. Wayfair that allowed states to require remote sellers and marketplaces to collect sales tax.