Overview

Amazon collects and remits sales tax on certain seller fees depending on state tax laws and where your business or fulfillment centers are located. This is a critical financial consideration for U.S.-based Amazon sellers, as the additional tax on fees like referral fees, FBA prep fees, and subscription charges can affect your overall cost structure. Understanding which fees are taxable — and under what circumstances — helps sellers accurately forecast expenses and avoid surprises on their transaction detail pages.

Key Points / What Sellers Need to Know

• Amazon collects tax on seller fees in certain states — Some U.S. states classify Selling on Amazon (SOA) fees and Fulfillment by Amazon (FBA) fees as taxable services, requiring Amazon to collect and remit sales tax on those charges.
• SOA fee taxability depends on your business location — Whether tax applies to referral fees, per-item fees, and subscription fees is determined by the state where your business is registered.
• FBA fee taxability depends on fulfillment center location — Tax on FBA-related charges like inventory prep fees is based on where the fulfillment center processing your goods is located, not where your business is headquartered.
• Tax rules vary significantly by state — Each state has its own rules about which fees are taxable, at what rate, and whether local taxes also apply. Some states tax only prep fees while leaving other FBA fees untaxed.
• Exemptions require manual processing — If your business holds a tax exemption, Amazon cannot automatically apply it to seller fees. You must contact Seller Support with documentation.

How Fee Taxation Works

Amazon divides seller fees into two broad categories for tax purposes. Selling on Amazon (SOA) fees include referral fees, variable closing fees, per-order item fees, and your monthly subscription fee. These are taxed based on your business location. Fulfillment by Amazon (FBA) fees cover services like inventory prep (such as bubble wrapping or labeling), storage, and disposal. These are taxed based on the location of the fulfillment center handling your inventory. When a taxable fee is charged, Amazon automatically calculates the applicable state and local tax, collects it, and remits it to the appropriate tax authority. The tax charge appears on your transaction detail page alongside the original fee.