Fulfillment by Amazon: New Jersey Nexus and Sourcing Rules

Fulfillment by Amazon New Jersey Nexus and Sourcing Rules

Five years after launching its operations in New Jersey, Amazon now has five fulfillment centers in the state, with plans to open three additional New Jersey locations in the future.  The fulfillment centers not only house Amazon’s own inventory, but also the inventory of independent online sellers whose product shipments are fulfilled by Amazon.  For out-of-state sellers, it is important to understand how Fulfillment by Amazon (FBA) may trigger nexus for New Jersey income tax purposes. 

The New Jersey Division of Taxation recently provided informal guidance pertaining to FBA sellers where the State explained that although the storage of inventory creates nexus for corporation business tax (CBT) purposes and the receipts for tangible property sold by a corporation are sourced on a destination basis, the same is not true for the inventory of a partnership or a sole proprietor.  For partnerships and entities taxed as partnerships, the mere presence of inventory in New Jersey does not trigger nexus for gross income tax purposes, and as a result, out-of-state partnerships participating in the FBA program with no other physical presence in the State of New Jersey have no income tax filing requirements.

For more information, or if you have any questions about this or any other tax matter, please contact your Wilkin & Guttenplan advisor or email us at This email address is being protected from spambots. You need JavaScript enabled to view it..

IRS to Implement a Trial Basis Video Conferencing System

IRS to Implement a Trial Basis Video Conferencing System

The IRS Office of Appeals has announced their planned trial of a virtual face-to-face video conferencing system for taxpayers looking to resolve disputes. This pilot platform is stated to be secure while offering greater flexibility than existing video conferencing services. The video conferencing will be of particular benefit to taxpayers that cannot easily access an IRS appeals office due to proximity, and to those who prefer face-to-face interaction when dealing with sensitive tax matters. The platform will be accessible to taxpayers anywhere with proper internet access. The IRS’ goal of enabling this technology is to provide taxpayers with timely advice and efficient service. The program rolled out August 1st, and will be assessed for permanent implementation based on taxpayer satisfaction.

For more information, or if you have any questions about this or any other tax matter, please contact your Wilkin & Guttenplan advisor or email us at This email address is being protected from spambots. You need JavaScript enabled to view it..

Sales Tax Amnesty Program Available to Amazon Vendors

Sales Tax Amnesty Program Available to Amazon Vendors

The explosion of the online marketplace over the past decade has created some confusion regarding the collection of sales tax which has only been exacerbated since Amazon’s launch of its Fulfillment by Amazon (FBA) program. Merchants selling products through the FBA are not always aware of the physical location of their inventory, and therefore, also unaware of possible sales tax obligations. As a result, Amazon retailers have accumulated an estimated $2 million in uncollected sales tax across various taxing jurisdictions. In an attempt to set these vendors back on track, the Multistate Tax Commission (“MTC”) has decided to introduce a sales tax amnesty program aimed to give Amazon retailers new footing as they initiate compliance with any applicable sales tax regulations.

The states currently committed to participate include: Alabama, Arkansas, Colorado, Connecticut, Kansas, Kentucky, Louisiana, Nebraska, New Jersey, Oklahoma, Texas, Utah, and Vermont. There are currently eight additional states considering participation in the program. Any Amazon vendor seeking to participate must file a voluntary disclosure agreement (VDA) with the MTC during the amnesty period of August 17 – October 17, 2017. The amnesty program will allow noncompliant merchants to begin paying sales tax on future sales while forgiving all prior noncompliance.

For more information, or if you have any questions about this or any other tax matter, please contact your Wilkin & Guttenplan advisor or email us at This email address is being protected from spambots. You need JavaScript enabled to view it..

The IRS Announces Additional Tax Relief for Hurricane Harvey Victims

The IRS Announces Additional Tax Relief for Hurricane Harvey Victims

After the recent destruction that Hurricane Harvey has caused to Texas, the IRS has released additional relief to assist taxpayers affected by the storm. This assistant will allow taxpayers in and outside of the disaster areas to provide relief for themselves and those in need. The relief is focused around distributions and loans being made from a retirement plan with regards to a “Hardship Distribution.” . Frequently the procedures to take a distribution or a loan against a retirement account are relatively strict. The IRS, however, is disregarding these proceedings for distribution beginning on August 23rd, 2017 through January 31st, 2018 for those affected by Harvey and individuals related to those affected by the Hurricane. This means that you do not need to be in a FEMA classified disaster area to assist a qualified person (mom, dad, son, daughter, grandparents) by taking a hardship distribution from your plan or a loan to support a family member.

It is critical to note that the IRS tax treatment on loans and distributions remains unchanged. Normally loan proceeds are tax-free if repaid within five years, and hardship distributions are taxable and subject to a 10% early-withdrawal tax. Please consult with a tax advisor or plan administrator before taking a distribution.

On another note, many Americans are providing contributions to a charity. This is an excellent way to provide assistance, and if you itemize your deductions, then you can claim the contribution on your 2017 tax return. The IRS has made mention of being aware of scams and criminals that are trying to profit from the Hurricane. Be careful with emails that you receive as they could bring you to a website that appears to be affiliated with a charity, and the site could steal any credentials that you provide.

Below are some useful links for further information.

For more information, or if you have any questions about this or any other tax matter, please contact your Wilkin & Guttenplan advisor or email us at This email address is being protected from spambots. You need JavaScript enabled to view it..

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