{"id":32,"date":"2023-01-03T17:15:09","date_gmt":"2023-01-03T22:15:09","guid":{"rendered":"https:\/\/www.crescentkao.com\/blog\/?p=32"},"modified":"2024-02-06T20:17:02","modified_gmt":"2024-02-07T01:17:02","slug":"alibaba-sales-tax-how-to-avoid-paying-it-astep-alibaba-sales-tax-exemption-program-explained","status":"publish","type":"post","link":"https:\/\/www.crescentkao.com\/blog\/2023\/01\/03\/alibaba-sales-tax-how-to-avoid-paying-it-astep-alibaba-sales-tax-exemption-program-explained\/","title":{"rendered":"Alibaba Sales Tax &amp; How to AVOID Paying It | ASTEP Alibaba Sales Tax Exemption Program Explained"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">What\u2019s up guys, my name is Crescent. So, the long arm of the tax man has finally reached all the way to Alibaba. And if you haven\u2019t already noticed, there\u2019s a new line on your Alibaba invoices that says Tax. Ick. And of course, no one wants to pay taxes if they don\u2019t have to. So, why is Alibaba suddenly charging sales tax? Well, in this video, let\u2019s talk about that and how it affects you and I\u2019ll show you how you can easily avoid paying this new tax added by Alibaba and do you know what else you can easily do? Smash that like button for the Youtube algorithm. It doesn\u2019t cost you anything but it does help me out tremendously by letting youtube know to show this video to more people and I would really appreciate it, so thank you. And with that said, let\u2019s begin.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So, if you\u2019ve tried to make a purchase or asked for a quote recently on Alibaba, you\u2019ve probably noticed a new tax line on the invoice. Alibaba never charged sales tax before, why the sudden change? Well, recent changes in legislation has deemed Alibaba as a marketplace facilitator to 3rd party sellers, similar to eBay and Amazon, so Alibaba is now required to collect and remit sales tax. That\u2019s why we\u2019re seeing this new tax line on the quotes and invoices.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/service.alibaba.com\/page\/knowledge?pageId=128&amp;category=1000088734&amp;knowledge=1060989315&amp;language=en\">https:\/\/service.alibaba.com\/page\/knowledge?pageId=128&amp;category=1000088734&amp;knowledge=1060989315&amp;language=en<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But in case you didn\u2019t know, having to pay sales tax only applies to the end user, not a retailer, wholesaler or supplier. The end user is the person that is actually going to use the product for its intended purpose. For example, if you buy a tube of toothpaste and you\u2019re actually going to use it to brush your teeth, then you\u2019re the end user so you have to pay sales tax. However, if you\u2019re Target or Walmart and you\u2019re buying the toothpaste with the intent to sell it, then you\u2019re a retailer, and you don\u2019t pay sales tax. This is the same if you\u2019re doing private label and you\u2019re manufacturing products to sell under your own brand, you don\u2019t pay sales tax.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So, if you\u2019re watching this video, then I\u2019m assuming you\u2019re not the end user. So, how do you get around having to pay the sales tax on Alibaba? Well, if you already have an Alibaba account, then you probably already got an email notification letting you know about the change and what you can do about it. You can see here that it says, To get verified as a tax exempt buyer, you can sign up for our Alibaba US Sales Tax exemption program called ASTEP.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/service.alibaba.com\/page\/knowledge?pageId=128&amp;category=1000088728&amp;knowledge=1060997810&amp;language=en\">https:\/\/service.alibaba.com\/page\/knowledge?pageId=128&amp;category=1000088728&amp;knowledge=1060997810&amp;language=en<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And if we jump over to the Help Section, it says \u201cThe ASTEP is a program that can easily help buyers identify himself\/herself as an eligible tax-exempt buyer for US Sales Tax purposes.\u201d All you have to do is enroll in the ASTEP program by completing a few steps and answering some questions which I\u2019ll go over with you in a second, and \u201csubject to tax law requirements and changes, once Alibaba confirms you as an eligible tax-exempt buyer, your future purchases eligible for exemption will not be subject to sales tax at checkout.\u201d And I should mention here that if you haven\u2019t already figured this out already, this new sales tax issue only applies to US based buyers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Alright, so in order to enroll in ASTEP, you\u2019ll need to have the following information: the state(s) which you have sales tax exemption certificates or qualification, Entity type of your organization, Organizations address and Exemption numbers or exemption form (if applicable).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Now, as for the tax exemption certificate, this is typically issued to you by the state where you registered your business. How you get the tax exemption certificate varies by state so it\u2019s beyond the scope of this video but if you don\u2019t have one already, you can visit your state\u2019s government website and you\u2019ll probably find information on how to get it. For example, my business is registered here in Washington state. If I do a quick search for \u201cwashington state sale tax exemption certificate\u201d, the first link conveniently takes me to what I need to do.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/dor.wa.gov\/taxes-rates\/retail-sales-tax\/reseller-permits\/approved-exemption-certificates-wholesale-purchases\">https:\/\/dor.wa.gov\/taxes-rates\/retail-sales-tax\/reseller-permits\/approved-exemption-certificates-wholesale-purchases<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You can also find more information on how to apply for a sales tax exemption certificate for your state on this website here. I\u2019ll leave a link to it in the video description below.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">How to get your Sales Tax\/Resale Permit<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-wp-embed is-provider-patriot-software wp-block-embed-patriot-software\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"J2kpIWOvBN\"><a href=\"https:\/\/www.patriotsoftware.com\/blog\/accounting\/resale-certificate-sales-tax-exemption\/\">Resale Certificate, the Get Out of Tax Free Card<\/a><\/blockquote><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;Resale Certificate, the Get Out of Tax Free Card&#8221; &#8212; Patriot Software\" src=\"https:\/\/www.patriotsoftware.com\/blog\/accounting\/resale-certificate-sales-tax-exemption\/embed\/#?secret=UDJoJACHZy#?secret=J2kpIWOvBN\" data-secret=\"J2kpIWOvBN\" width=\"600\" height=\"338\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Ok, now once you have your sales tax exemption certificate, you\u2019ll need to jump onto Alibaba to enroll in ASTEP. Now, if you don\u2019t already have an Alibaba account, you\u2019ll have to create one. Just click on the My Alibaba button at the top and create a new account. After you\u2019ve signed in, click on My Alibaba > My Account > My Profile. In the My Company section, click on Edit and fill in your details. If you have a registered business, enter the business name here, otherwise, you can just make one up.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Now, once you\u2019ve logged in to Alibaba, to apply for the ASTEP program, click on My Alibaba &gt; Account &gt; tax information &gt; Add\/Modify Tax Exemption<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Step 1<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Make sure you read through the terms and conditions here so you understand what is going on and if this is applicable to you or not. Once you\u2019ve done that, click the check box to agree and then click on Start Your Application.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Step 2<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Now select the state that your business is registered in or has tax exemption status. Now, it doesn\u2019t matter if you\u2019re selling on Amazon or shopify or whatever and you\u2019re selling products all over the country, this is the home state where you&#8217;re conducting your business in. If you don\u2019t have a registered business, this is the state where you live. In my case, my business is registered in Washington state. Click Continue.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Step 2<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On the next step, you need to choose your exemption type. Here\u2019s where you need to the reason why you need a tax exemption. Now, there\u2019s a lot of options to choose from here but most are not going to apply to us. For most of us here, we\u2019re doing private label or wholesale, so you\u2019re going to choose resale which is one of the two most popular options. We are buying inventory or products with the intent to resell it. The second most popular option is Industrial Production\/Manufacturing. You\u2019d choose this option if you&#8217;re selling a product that requires you to buy parts and assemble them together for the final product. For example, if you\u2019re selling a lawn mower and you need to buy the plastic wheels and the engine from another manufacturer and then assemble those parts into the final lawn mower to sell. You don\u2019t need to pay sales tax on those sub components. Ok, click Continue.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Step 3<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Ok, step 3. Here\u2019s where you\u2019ll need to provide your business details. Again, if you don\u2019t have a registered business, just use your personal information and make up a business name. Once you\u2019ve filled in all of the fields and click on Continue.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Step 4<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Ok and now on step 4, you\u2019ll going to need to answer a few questions here on this questionnaire. The answers you provide here will help prefill the tax exemption form or resale tax certificate for your state. Now keep in mind, the tax exemption form or resale tax certificate varies by state, so the questions you see on this step may differ from what you\u2019re seeing now on my screen.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Ok and now click on Continue.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Step 5<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Now we\u2019re on the review page. Here you can look over everything to make sure it all looks correct and all the information is accurate. Make sure you look through this thoroughly so that your application isn\u2019t rejected. Once you\u2019ve done that, click on Continue.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Step 6<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And now on the final step here, make your signature and click on continue.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Ok, and now you can download the completed application form. Based on all the information you just entered, it filled in the proper tax exemption form for you as you can see here and this is what is going to be submitted to the state.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Now click on Activate Certificates and it\u2019ll tell you if it\u2019s been activated or rejected for some reason. And so you can see here that it\u2019s been Activated.&nbsp; So if we can click back to the Homepage, you can click on the Expand option here and you can see the current status of your application. We can see that it says it\u2019s currently pending. It can take some time but you\u2019ll just have to wait and come back to see at what stage your application is in. It\u2019ll go from pending to received and then to Active once it\u2019s been approved.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Alright, and that\u2019s it. Once your exemption is active, you should no longer see you\u2019re being charged tax on Alibaba. However, if for some reason you still see the tax line, contact Alibaba support. Don\u2019t contact the supplier, they can\u2019t help you, all transactions are taken care of by Alibaba, not the supplier.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Ok, so if you want to get in touch with me, you can find all of my contact details in the video description below. I\u2019d love to hear your thoughts, so leave a comment or question in the comment section below, I answer every single one.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And as always, if you found value in this video, consider subscribing. And do me a favor smash that like button for the youtube algorithm it really does help me out and I\u2019d appreciate it, and ring the bell so you never miss a future video! Alright, thanks for watching!<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>REFERENCES<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/service.alibaba.com\/page\/knowledge?pageId=128&amp;category=1000088734&amp;knowledge=1060989315&amp;language=en\">https:\/\/service.alibaba.com\/page\/knowledge?pageId=128&amp;category=1000088734&amp;knowledge=1060989315&amp;language=en<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Watch the Video<\/h2>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"Alibaba Sales Tax &amp; How to AVOID Paying It | ASTEP Alibaba Sales Tax Exemption Program Explained\" width=\"680\" height=\"383\" src=\"https:\/\/www.youtube.com\/embed\/GzFVyRlw-Po?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>What\u2019s up guys, my name is Crescent. So, the long arm of the tax man has finally reached all the way to Alibaba. And if you haven\u2019t already noticed, there\u2019s a new line on your Alibaba invoices that says Tax. Ick. And of course, no one wants to pay taxes if they don\u2019t have to. So, why is Alibaba suddenly&#46;&#46;&#46;<\/p>\n","protected":false},"author":2,"featured_media":33,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-32","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"jetpack_featured_media_url":"https:\/\/www.crescentkao.com\/blog\/wp-content\/uploads\/2023\/01\/maxresdefault-4.webp","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.crescentkao.com\/blog\/wp-json\/wp\/v2\/posts\/32","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.crescentkao.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.crescentkao.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.crescentkao.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.crescentkao.com\/blog\/wp-json\/wp\/v2\/comments?post=32"}],"version-history":[{"count":2,"href":"https:\/\/www.crescentkao.com\/blog\/wp-json\/wp\/v2\/posts\/32\/revisions"}],"predecessor-version":[{"id":35,"href":"https:\/\/www.crescentkao.com\/blog\/wp-json\/wp\/v2\/posts\/32\/revisions\/35"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.crescentkao.com\/blog\/wp-json\/wp\/v2\/media\/33"}],"wp:attachment":[{"href":"https:\/\/www.crescentkao.com\/blog\/wp-json\/wp\/v2\/media?parent=32"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.crescentkao.com\/blog\/wp-json\/wp\/v2\/categories?post=32"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.crescentkao.com\/blog\/wp-json\/wp\/v2\/tags?post=32"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}