amazon tax id

How To Get Tax ID Number To Sell On Amazon

Amazon is a great place to sell your products online. About 40 percent of the merchandize sales are attributed to third-party sellers. The total revenues of third party sellers exceeded $40 billion last year. You can make it big on Amazon with little effort and investment.

One key requirement of selling on Amazon store is to provide your individual taxpayer identification number (ITIN). You should know How to Get Tax Id Number to Sell on Amazon. In this article, we will provide in-depth information regarding How to Get Tax Id Number to Sell on Amazon.

If you need help getting your tax id number, please call us at 407-344-1012, or email us at info@freedomtaxfl.com.

Why Know How to Get Tax Id Number to Sell on Amazon

The Internal Revenue Service (IRS) requires third-party payment processors including Amazon to file Form 1099-K on behalf of all US sellers who fulfill the following requirements:

  • Annual transactions amount to 200
  • Value of the unadjusted annual gross sales amounts to $20,000

Amazon, however, requires all professional sellers and individual sellers whose transactions exceed 50 in a given year to provide tax information. The requirement is irrespective of the sales volume. If you do not provide ITIN to Amazon, your account will be suspended.

In addition to providing the tax number, foreign nationals need to submit Form W-8BEN to request exemption of tax reporting requirements in the US.

Details About ITIN

ITIN is a 9-digit number that is used for tax identification purposes. IRS introduced ITIN in 1996 so that foreign nationals could pay taxes to the US government when required. The tax number does serve as a work permit or provide legal permission to reside in the US. Illegal migrants can use ITIN for tax purposes until their legal status is confirmed.

Every person is given a unique ITIN by the IRS that starts with the number 9 i.e. (9xx-xx-xxxx). This number is not used for any other purposes other than to report federal taxes. IRS issues ITIN to individuals who are not eligible for social security number (SSN). Keep in mind that the holder of ITIN is not entitled to earn income or work in the US. They also do not become eligible for social security benefits or Earned Income Tax Credit.

Another important point to note regarding ITIN is that it does not grant individuals the same benefits as those offered to US residents. It can only be used for paying taxes to the IRS. Additionally, the IRS section 6103 states that the tax agency will not divulge ITIN holder’s information to any government agency such as Department of Homeland Security unless specified by a court order.

Who Needs to Know How to Get Tax Id Number to Sell on Amazon

An ITIN is offered to individuals who do not have a SSN and are also not qualified for it. These include:

  • A non-resident person who is required to file a US based tax return
  • A resident alien residing in the US who needs to pay taxes
  • Spouse and other dependents of the resident alien
  • Real estate brokers who assist non-residents with property related matters
  • An international investor who invests in US retail market

In case the above applies to you, you must know How to Get Tax Id Number to Sell on Amazon. Anyone who wants to sell on Amazon and resides outside the US must find out How to Get Tax Id Number to Sell on Amazon.

Getting an ITIN number provides various benefits. You can pay taxes and also claim tax refunds. It also allow you to avoid legal entanglements related to taxation. In order to avoid being threatened with legal actions, it’s important that you obey the US legal requirements by applying for ITIN. Another important benefit of having an ITIN number is that you can open a bank account in almost any state in the US. Also, you can request for a child tax credit in case a child of below 17 years has resided with you for about half the days in the current year.

You can also apply for a loan and credit card with the ITIN. It can also help in getting residency in the US as you will be viewed as a law abiding citizen who regularly pay the taxes. The authorities will be easier to convince to grant you residency permits based on your past history.

In addition, illegal migrants who know How to Get Tax Id Number to Sell on Amazon will not be liable to a high withholding tax amount.

Steps that Outline How to Get Tax Id Number to Sell on Amazon

Now that you have understood the benefits of knowing How to Get Tax Id Number to Sell on Amazon, let’s take a look at the steps that are required to apply for the tax number. You can apply for ITIN either in-person, through mail, or via an IRS acceptance agent.

Whatever method you choose, you will have to provide the same information. Here we will provide a brief overview of How to Get Tax Id Number to Sell on Amazon using different procedures.

In-person

You can submit the W-7 form for applying ITIN to any of the IRS Assistance Centers located in the US. Foreign nationals can apply by visiting an IRS center abroad. The authorized IRS agent will review and validate your application for ITIN. The agent will also verify the documents that must be submitted with the application for the tax number. Once verified, the application will be sent to the IRS center located in Austin , Texas for further review.

By Mail

Another way you can obtain an ITIN number is to submit an application along with the required documents by mail. You need to download the W-7 Form from the IRS website. The form contains 8 boxes that you need to check to tell the reason for submitting the tax form. Below is a brief explanation of each of the check boxes.

  1. The first box ‘a’ should be checked by non-resident foreign nationals who wants to obtain an tax exemption due to a tax treaty with the country. You should place a check mark here if your country has a tax treaty with the US. When you place a checkmark here, you should check box ‘h’ as well to provide details of the tax treaty.
  2. The second box ‘b’ should be checked by non-resident foreign nationals who have to file a tax return. You should notify whether your business has to file taxes. Also, this box should be checked if you want to obtain a tax refund.
  3. The third box ‘c’ is applicable for illegal migrants who have to pay taxes. While these individuals are not allowed to work, they still require to pay taxes to the IRS. Keep in mind that IRS won’t divulge any information mentioned in the application form to third party agencies. This box is not applicable for Amazon sellers.
  4. The fourth box ‘d’ should be checked by dependents of a US citizen or illegal alien. These individuals cannot apply for an SSN. This box is not applicable for Amazon sellers.
  5. The fifth box ‘e’ is for spouse of a US citizen or illegal alien. The spouse needs to file tax return but is not eligible for SSN. This box is not applicable for Amazon sellers.
  6. The sixth box ‘f’ is applicable for researchers, students, or professors who have arrived in the US for temporary purposes such as teaching a course or carrying out a research. Amazon sellers do not need to check this box unless they have arrived in the US specifically for that purpose.
  7. The seventh box ‘g’ is for dependent or spouse of a person who holds a valid US visa. They are required to file tax returns but are not eligible for SSNs. This box is not applicable for Amazon sellers.
  8. The eighth box ‘h’ is to mention other reasons for applying ITIN. Amazon sellers should mention the treaty and treaty article number for applying tax exemption.

Keep in mind that you will not be issued ITIN to sell products on Amazon if you enter incorrect information. That’s why it’s important that you carefully and correctly fill the form. Also, you should not leave any section blank. Instead of leaving any section blank, you should write NA or Not Applicable.

Once you have filled the IRS form W-7, you need to attach supporting documents that prove your identity. These include a proof of identity such as a driving license, passport, or identity card. The IRS accepts only certain documents for identification purposes. These include:

  • Birth certificate
  • National Identity Card with picture
  • Passport
  • Visa
  • Foreign driver’s license
  • Military identification card
  • Voter’s registration card

Additionally, Amazon sellers need to submit an official letter sent by Amazon for obtaining ITIN. You can request Amazon to issue this letter in your name.

You can attach original or certified copies of the original documents. Note that IRS does not accept notarized copies. Instead, you need to submit copies that are certified by the agents authorized by the IRS. The documents will be returned within 60 days after processing the application.

Once you have filled the application form and arranged the required documents, you need to mail them to the IRS. The form along with the attached documents should be sent to the address mentioned below.

  • Internal Revenue Service

Austin Service Center

ITIN Operation

Austin, TX 78714-9342

P.O. Box 149342

You can submit an application for an ITIN number to sell products on Amazon anytime. There is no specific date by which you have to submit an application. However, it’s important that you submit the application before putting your products on sale. Amazon will not allow you to sell products on the platform unless you provide a valid ITIN number.

After you have submitted the application, it will be reviewed and processed by the IRS. If you are found eligible for the tax number, you will be notified through mail. The notification letter containing the ITIN number will be sent within six weeks of submitting an application. If you do not receive the notification letter within this time period, you should call the IRS hotline 1-800-829-1040. The hotline is open on weekdays from 7:00 am to 7:00 pm.

Acceptance Agent

The third way to apply for an ITIN number to sell on Amazon is through an acceptance agent. These agents have passed training, compliance reviews, and quality standards set by IRS. You can find a list of IRS authorized agents online.

An acceptance agent will help you in filling the W-7 form. Additionally, the agent will verify original documents and return them immediately to you. In contrast, IRS sends back the documents about two months after submitting an application.

After verifying the documents, the agent will attach copies of the documentations that are required to be submitted with the application. The agent also submits a certificate of accuracy mentioning that all the documents have been verified. The application is then submitted to the IRS by the agent after which you will be sent an ITIN number for selling goods on Amazon.

Steps After Receiving the ITIN Number

After you receive the tax number from IRIS, you should inform Amazon through a self-service interview process. The online process will guide you in entering the correct tax number information. You should consider answering all the information regarding tax payment. Provide the same information that is mentioned in the IRS ITIN certificate. The name and the ITIN should be mentioned exactly as mentioned in the certificate.

Misspellings or entering the wrong tax number can invalidate the Amazon account. You should complete the interview without rushing through. It’s important to provide as much accurate information as possible.

In order to ensure security of your ITIN number, you should not disclose it over the phone or through email. You should submit the tax number only on secure web sites. In order to know whether the site is secure, you should hover your mouse next to the web address in Chrome and Firefox. Secure websites have a green lock sign. If using Microsoft Internet Explorer, you should look for a lock sign at the taskbar. If you see an unlock button, the website is not safe. Entering information on such sites can result in identity theft.

Keep in mind that validation of the information will take anywhere between two to three weeks. Sometimes it takes a little longer to process your application. Once you have made an online application regarding your tax number, the Legal Entity section of the Amazon Info page will say ‘provided and pending validation’. Once the tax information that you have provided matches with the IRS records, you will be sent an email notifying the status of your application.

In case your application has been accepted, your store will be active. You will receive payments of sale of your product on Amazon. On the other hand, if for some reason the provided information regarding the tax identity comes as invalid, you have to respond within 30 days of receiving the email from Amazon to provide correct tax information. If you fail to provide accurate tax information within the prescribed period, Amazon will suspend your account. As a result, you won’t be able to sell goods on the online selling platform.

Conclusion

Every individual who wants to sell goods on Amazon needs a valid ITIN number. The tax number must be entered when opening an account with the online seller. A separate ITIN number is required if opening an account in the name of the spouse or other dependent.

After you receive an ITIN number from IRS, you can begin selling goods on Amazon. You need to enter the tax number when creating an account in Amazon. Foreign nationals self-publishers and developers can enter the tax number to sell good through the US based store.

While IRS does not charge taxes on sales made outside the US, an ITIN number is still required to sell goods on Amazon. The number is used for tax purposes only and does not afford any additional benefits to the individuals.

Once you receive the ITIN number from Amazon, you should update the information in your account. Amazon will validate the tax information and notify you about the same through an email. It’s important that you provide accurate tax information as providing wrong information can result in suspension of the Amazon seller account.

Lastly, you should note the recent policies regarding IRS. If an Amazon seller does not use the ITIN tax number for three years, it will expire. After expiry of the tax number, you may need to reapply. The same procedure should be followed for renewal of the tax number as when applying for the first time.

If you need help getting your tax id number, please call us at 407-344-1012, or email us at info@freedomtaxfl.com.

 

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