As of September 2018, Amazon requires all sellers to obtain an EIN (employer identification number) in order to sell on the marketplace. This includes both individuals and businesses that are selling goods or services on Amazon’s marketplace. Yes, you heard right, you are no longer allowed to be selling on Amazon without an EIN!
Amazon has a resource for tax-exempt organizations that want to apply for a PTIN (professional tax identification number), but this is not relevant to people who do not need one. If you don’t have an EIN, then you’ll need a separate account with your name and Social Security Number in order to list items for sale.
Why Obtain an EIN for Amazon?
If you’re wondering why EIN for amazon is important, it’s because Amazon needs more information about its sellers so it can pay them accurately and identify any potential risks related to the sale of goods on its marketplace. Owning an EIN is not mandatory for U.S. citizens, but it does provide businesses (and individuals) with the opportunity to donate to charity and claim tax deductions for those donations.
Here are 3 key reasons why Amazon requires EIN:
1. Provides proof that you’re a real business
Part of the reason why Amazon requires individuals and businesses to obtain an EIN is that it validates your business. This includes proof of existence and proof of affiliation with the company in case there are any problems or disputes down the line between a seller and buyer.
2. Restricts access to certain tax benefits
Those who sell on Amazon may want to keep track of their earnings, handle expenses, add these figures into their personal income tax returns (or corporate tax returns), and claim specific deductions based on those figures. However, only businesses registered with the IRS can do this; individual sellers cannot apply for an EIN when they don’t even have a business.
3. Keeps users safe from identity theft
There have been a number of cases in which Amazon sellers have experienced identity theft or had their accounts used for fraudulent purposes. While it’s possible to just use an individual’s Social Security Number, the EIN carries more weight. It prevents individuals from getting into trouble with Amazon and its policies because they will be able to provide an employer identification number that shows they’re actually running a legitimate business.
Amazon Seller Account Requirements
Now that you know all about amazon ein requirements , here are some additional aspects related to your seller account:
- Sell only items listed on Amazon’s marketplace- This is part of what makes Amazon a great place to shop; products are authentic, vetted by experts, and shipped by the company itself.
- Amazon handles returns, shipping, and provides customer service- That’s why it’s important to stick with selling items on the marketplace rather than selling items privately (outside of Amazon). This can actually result in your account being suspended if you’re operating under someone else’s EIN.
- You must report income related to sales- If you sell a product for $100 or even more, then you must report that sale to the IRS at tax time. You may need an accountant or a qualified tax professional who is familiar with online sales and how they’re taxed in order to ensure this is handled properly.
How To Get An Amazon EIN Number
If you are an individual or business that needs an EIN for Amazon, there are two ways to receive one: via mail or online. The process for this varies by state, so make sure you check out our guide to obtaining your EIN . And if you need your Amazon’s EIN faster, E-delaware can help!
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