FAQs About the Amazon Tax Exempt Program, Answered!

Michael Pignatelli
Aug 04, 2022

If you are an Amazon seller, you may have heard about the Amazon Tax Exempt Program (ATEP). ATEP may sound more enticing than other tax topics because it is about exemptions. But what is it really, and how can you and your customers utilize the program? In this blog post, we’ll answer frequently asked questions about ATEP, like how it works, how you and your customers can take advantage of it, and the benefits of enrolling. So keep reading to find the answers!

How Does ATEP Work?

ATEP is a program Amazon sellers like you can enroll in using your Seller Account. In enrolled stores, buyers can upload tax exemption documents to get a certification from Amazon and enjoy tax exempt purchases. You can proactively optimize your ATEP settings to exempt specific individuals and groups from paying taxes. 

How Can Sellers Enroll in ATEP?

To enroll, click “Tax settings” on the menu above your Amazon Seller Central account. You can update the settings by clicking the “View/Edit Tax Collection Obligations and Shipping and Handling and Gift Wrap.”

Be prepared to fill in necessary information needed, specifically the territory/state you wish to enroll in, your organization entity, organization address, and tax exemption numbers or form.

Then, check out ATEP terms and conditions, and click “Accept” if you agree. It only takes a few minutes for your enrollment to be approved.

how to use tax exempt on amazon

How Can Buyers Be Tax-Exempted?

Some certain individuals and groups are deemed by law to be tax exempted. For instance, nonprofit groups, charity organizations, state and local government members, resellers, education providers, and direct payment holders shouldn’t be paying taxes. For members of these groups to enjoy the ATEP, they must upload tax exemption documents and get a tax exemption certificate. You can also make it easier for your customers to be tax-exempted by enabling specific groups for tax exemption on your Seller Central tax settings.

How is Enrolling in ATEP beneficial?

The main benefit of ATEP is making it easy for buyers to enjoy their right to tax exemption. Meanwhile, sellers attract sales from tax-exempted populations. In addition, Amazon uses a self-guided Wizard feature. Wizard allows sellers to enroll in ATEP quickly and for buyers to upload necessary tax-exempt information in just a few clicks. Approval of the enrollments and requests can be as quick as 15 minutes. 

ATEP also has a feature that restricts tax-exempt buyers from sellers that are not ATEP enrolled to avoid any hassles in their purchasing process.

Amazon Bookkeeping by Unloop

That’s it for our introduction to the Amazon Tax Exempt Program! We hope we answered all of your questions. 

If you have any further inquiries, feel free to reach out to us here at Unloop. If you are a seller looking for help with your Amazon business or Amazon FBA bookkeeping, tracking your ATEP data, or monitoring your sales taxes, you can partner with us too. 

We have a team of bookkeeping experts who can take the hassle out of tax season for you with the help of different accounting software. If you want to know more about our services, feel free to call us. We’d love to talk to you.

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Unloop is the first and only accounting firm exclusively servicing ecommerce and inventory businesses in the US and Canada. With the power of people and technology, our team dives deep into COGS and inventory accounting.. You are paired with a dedicated bookkeeping team that prepares accurate financial statements, financial forecasts, and can also pay bills or run payroll for you. Come tax time, everything is organized and ready to go, so you don't need to worry. Book a call with an ecommerce accountant today to learn more.
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