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Avoid Sales Tax Double-Dip: File a Resale Certificate

[Updated by the author July 19, 2019 to reflect Amazon’s shift from CreateSpace to KDP Print.] How many times have you ordered boxes of books from Amazon or IngramSpark to sell at an event? Did you pay sales tax on them? Oops! You have the right to get those books tax-free, just like any other… [Read More]

Sales tax tips for authors by Carla King for BookWorks.com

[Updated by the author July 19, 2019 to reflect Amazon's shift from CreateSpace to KDP Print.]

How many times have you ordered boxes of books from Amazon or IngramSpark to sell at an event? Did you pay sales tax on them?How to obtain a resale certificate for authors by Carla King for BookWorks.com Oops! You have the right to get those books tax-free, just like any other wholesale product, because you're going to collect tax when you sell them. Don't get double-taxed. Obtain a resale certificate (also called reseller's permit) and upload it to CreateSpace and IngramSpark and they won't charge tax. Here's how:

—First, obtain a resale certificate

—The tax exemption problem with Amazon's switch from CreateSpace to KDP Print

—Claim tax exemption status with IngramSpark by uploading your permit to your account

—Order your books

 


Obtain a Resale Certificate

Start by doing a Google search for resale certificate yourstate to find the right governmental institution. Here's what you're going to need. [I got this handy checklist from BookWorks' Legal Expert Helen Sedwick's newly updated Self-Publisher's Legal Handbook, 2nd Edition.]

—SSN and EIN

Sales tax tips for authors by Carla King for BookWorks.com

This is an essential for the publisher's bookshelf.

—Driver license or ID

—Email address

—Your business name (publishing imprint)

—State Employer Identification Number (SEIN), if any

—NAICS code 511130, Book Publishing, or for publishing online only, use 519130

—SIC 2731, Book Publishing

—Bank information

—Name and account number of your merchant credit card processor

—Name, address, and phone number of your bookkeeper (or you)

—Estimate of monthly sales of direct sales of print books.

Sedwick's book has lots and lots more information about taxation and what you need to set up your publishing business legally. This is one of the top books I recommend to authors.

 


Claim Sales Tax Exemption at Amazon KDP Print

Amazon KDP print currently has no way to waive sales tax on author copies. I've been contacting them now for a couple of months by phone and email about this, but have had no response. Want to help put the pressure on? Query them at tax-exempt@amazon.com to ask when the CreateSpace Direct Reseller Application form will be transferred over to KDP Print as I described in a previous version of this post. Here's the old form.

How to obtain resale certificate for authors by Carla King for BookWorks.com

Again, this capability has not been transferred over to KDP print. At this time, when you order author copies through your KDP Account, you'll pay the author price, which is Amazon's price to print your book. You'll also pay shipping charges, and (unfairly)  sales tax or local VAT.

In researching this issue, all I was able to find was the Amazon KDP help topic on author order discounts.

https://kdp.amazon.com/en_US/help/topic/G202132360#author_order_discount

When you order author copies through your KDP Account, you'll pay the author price for your own books. The author price is the printing cost for your selected marketplace times the number of copies. The trim size, interior type, page count determines this price and does not include shipping charges or taxes. On Amazon.com, any applicable sales tax will be applied at checkout. For European orders, local VAT will be applied at checkout. This price is the lowest price we can offer for your book; we are unable to offer additional discounts

It used to be that you'd email a PDF of your certificate to info@createspace.com with your CreateSpace Member ID in the subject line. A day or two after you emailed them the resale certificate, you would have received an email like this:

How to obtain resale certificate for authors by Carla King for BookWorks.com

Until Amazon KDP reimplements this feature you'll pay sales tax on your author (wholesale) copies as well as being legally obligated to pay sales tax on any of those books you sell to customers. If you're hit by this double-tax dipping you can email them at exempt@amazon.com to ask them to migrate the CreateSpace Direct Reseller Application to KDP Print.

 


Claim Sales Tax Exemption at IngramSpark

To upload your resale certificate to IngramSpark, follow the instructions below.

1. Log in to your account, navigate to the Account tab, and click Tax Information.

How to obtain resale certificate for authors by Carla King for BookWorks.com

2. Click the Upload Tax Document button, lower right.

How to obtain resale certificate for authors by Carla King for BookWorks.com

3. Claim an exception by clicking the Yes radio buttonHow to obtain resale certificate for authors by Carla King for BookWorks.com

4. Click the radio button Claiming exception based on resale.

How to obtain resale certificate for authors by Carla King for BookWorks.com

5. Drag and drop or click Choose File to upload your PDF resale certificate.

How to obtain resale certificate for authors by Carla King for BookWorks.com

6. Choose Reseller Affidavit of Sales Tax Registrations from the dropdown menu.

How to obtain resale certificate for authors by Carla King for BookWorks.com

7. When it's finished uploading you'll see your Reseller Affidavit listed in your tax documents.

How to obtain resale certificate for authors by Carla King for BookWorks.com

That's it! Now, when you order books, you won't be taxed.

(See alsoA Free EIN Simplifies the Business of Self-Publishing)


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2 thoughts on “Avoid Sales Tax Double-Dip: File a Resale Certificate”

  1. Missy says:

    Very informative.Would I still have to pay taxes to Ingram Spark if I am not going to sell the books,just use them for reviews or my own use?

  2. Carla King says:

    Good question. I believe this kind of printing is a business expense for advertising and promotion but please double check that with your tax pro.

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