One frequent error is assuming Amazon handles all sales tax automatically. While they collect tax in many states, sellers remain responsible for understanding their own obligations, especially for merchant-fulfilled orders or states with special rules. Failing to register in states where you have nexus creates significant compliance risks and potential back-tax liability.

Another common mistake is misapplying Product Tax Codes. Using the wrong PTC can result in incorrect tax collection, leaving you either over-collecting (and owing refunds) or under-collecting (and paying the difference yourself). Neglecting to configure tax settings properly in Seller Central compounds these issues, particularly when expanding to new marketplaces or states.

Many sellers also fail to maintain adequate records or miss filing deadlines even when no tax is due. Some states require zero-dollar returns to maintain compliance. Additionally, not participating in ATEP when you have business customers means missing opportunities for tax-exempt sales. Finally, ignoring voluntary disclosure programs when you discover past non-compliance often results in harsher penalties than proactive resolution would have incurred.