Avalara, a leading tax management company, has surprisingly announced it will no longer provide sales tax and sales tax reporting services to Amazon sellers, leaving many merchants looking for alternative solutions to handle their tax obligations.
Attention Amazon sellers! Avalara has terminated its partnership with Amazon
For Amazon sellers, the consequences are significant. Without a seamless tax management solution, they risk non-compliance, fines, and not least the administrative burden of manually handling tax returns worldwide. This is happening at a time when effective tax management is more important than ever, given changing global tax rules and the increasing scrutiny of online sales. It’s certainly one of the reasons Avalara is dropping Amazon like a hot potato. Good advice is expensive now.
Here’s the solution
Avalara discontinues Amazon Tax Services
Avalara has been a trusted partner for Amazon sellers, offering automatic VAT registration, reporting, and remittance directly through the Amazon platform. However, the company has recently decided to discontinue these services for Amazon sellers as of November 1, 2024. In other words: The knot has sprung! This decision comes as a surprise to many sellers who have relied on Avalara’s seamless integration with Amazon to handle their complex tax compliance requirements in multiple states and jurisdictions. The sudden cancellation of services has left sellers unsure how to handle their taxes going forward.
But here’s a great alternative
The implications for Amazon sellers
The cancellation of Avalara services for Amazon sellers has significant implications:
- Increased compliance burden: Sellers must now manually track their VAT obligations, register with various authorities, file numerous separate VAT returns, and pay taxes, which can be a very time-consuming and risky process, especially for those operating in multiple jurisdictions.
- Risk of non-compliance: Without an automated solution, sellers are at a higher risk of non-compliance, which can lead to fines, interest costs, and potential legal issues if they fail to collect and remit taxes correctly and on time.
- Disruption: Transitioning to a new tax management solution or handling tax matters internally can cause disruption and require additional resources, taking time and effort away from the core business.
How to switch your Amazon sales management solution
Alternative solutions and next steps
While Avalara’s decision has created uncertainty, Amazon sellers have a few options to consider:
- Consider alternative tax compliance solutions: Sellers can research and evaluate other tax compliance providers that offer similar services and integrations with Amazon’s platform.
- Internal tax management: Larger sellers with sufficient resources can choose to handle tax compliance internally by hiring their own staff or using tax software solutions.
- Use professional help: Advice from tax experts or accounting firms specializing in e-commerce taxation can provide guidance and support during the transition phase. However, many refuse to deal with customers selling on Amazon and I understand why as I have tried to help some in the past. Getting Amazon’s accounts to comply with government and tax authority regulations in Europe and Sweden hasn’t been easy.
It’s high time for Amazon sellers to act fast and explore their options to ensure continued tax compliance and avoid potential fines or legal issues. Getting started with this type of tax management with a new partner doesn’t happen overnight, so it’s just a matter of getting started. In this case, it’s probably best to get help from Quaderno.
Go to Quaderno quickly before they drown in the tsunami of desperate Amazon sellers. Possible other options include TaxJar, Vertex, and Sovos. It’s only a matter of time before they start rejecting Amazon sellers too.
Avalara ends its partnership with Amazon, leaving sellers without an essential tax management tool
