How US sales tax works in one paragraph
There is no federal sales tax in the US. Sales tax is set by each state, and often by counties and cities too, and it is collected by the seller from the buyer at the point of sale. A seller only has to collect in a state where it has "nexus", a legal connection to that state. Before 2018, nexus meant a physical presence. In South Dakota v. Wayfair, Inc. (21 June 2018), the Supreme Court allowed states to require collection from remote sellers based on the volume of their sales into the state, called economic nexus.
For a non-resident founder, sales tax is separate from the LLC's federal filings. A foreign-owned single-member LLC files Form 5472 with a pro forma 1120 with the IRS; sales tax permits and returns are filed with state revenue departments.
Marketplace facilitator laws: why Amazon collects for you
After Wayfair, states passed marketplace facilitator laws. These move the duty to collect and remit sales tax from the individual seller to the marketplace. Amazon's help page on Marketplace Tax Collection says that, as a marketplace facilitator, it is "responsible to calculate, collect, remit, and refund state sales tax on sales sold by third party sellers" in the states covered.
That same page adds a warning: "in certain states, local taxes are not included within Marketplace Facilitator Legislation; Amazon is not responsible for those taxes." So "Amazon handles it" is true for most sales in most places, but not everywhere.
State rules show how this works in practice:
- Florida: from 1 July 2021, marketplace providers with a physical presence in Florida, or that facilitate over $100,000 of remote sales, must collect and remit Florida tax on marketplace sales. Florida's TIP 21A01-03 says the marketplace seller "may not collect the tax and must exclude sales made through the marketplace" from its own return.
- Texas: the Comptroller's marketplace FAQ says a remote seller that sells only through a marketplace does not need a permit if it has "received and accepted in good faith a certification that the marketplace provider will collect sales and use tax". No special form of certification is required.
- New Mexico: the Taxation and Revenue Department applies its $100,000 remote seller rule to marketplace providers too. New Mexico charges a gross receipts tax rather than a classic sales tax.
When an Amazon seller still needs a sales tax permit
Marketplace collection covers marketplace sales. It does not switch off your own obligations. These are the four common reasons an Amazon seller with a US LLC still has to register somewhere.
1. FBA inventory creates a physical presence
Storing goods in a state is a physical presence in that state. With Fulfillment by Amazon, you choose to send stock to Amazon, but Amazon decides which fulfillment centers hold it, so your inventory can end up in states you never picked. Check your FBA inventory records for the states where your units are stored.
States treat this differently. Texas is unusually clear. Its FAQ says a remote seller below the $500,000 safe harbor with goods "temporarily stored in Texas at a marketplace provider's facility does not need to obtain a permit". A remote seller above $500,000 with goods stored that way "must obtain a tax permit". A seller that is based in Texas has a physical presence and needs an active permit even if it sells only through a marketplace.
California's tax department says a physical presence, including "inventory or office locations in California", creates registration obligations separate from its economic threshold. Other states have their own positions, so check each state where stock is held.
2. You sell through your own website or other channels
Sales on your Shopify store, your own site, social media or at events are not marketplace sales. No facilitator collects on them. If you have nexus in a state, you must register there and collect on those direct sales yourself. Florida says marketplace sellers with a physical presence, or with substantial remote sales outside the marketplace, must register as dealers and collect on those non-marketplace sales.
3. Your total sales pass an economic nexus threshold
Some states count all your sales into the state toward their threshold, including sales that Amazon taxes. Texas says: "You must include all sales in the safe harbor calculation, including marketplace sales, even if the marketplace provider is collecting and remitting the sales tax." A seller with modest website sales but large Amazon sales can pass a threshold on the combined total.
4. The state requires registration anyway
Some states expect sellers with nexus to hold a permit and file returns even when every sale was taxed by a marketplace. Texas, for example, says marketplace sales go in total Texas sales on the return but are excluded from taxable sales where the provider has certified that it collects. Filing zero-tax returns is still filing.
Economic nexus thresholds in common states
Thresholds are set by each state and change from time to time. These figures come from each state's own pages, checked on the date at the foot of this page.
| State | Remote seller threshold | Notes |
|---|---|---|
| California | Over $500,000 of sales of tangible personal property for delivery in California, in the preceding or current calendar year | Includes sales by related persons. Physical presence, such as inventory, creates obligations regardless. |
| Texas | Total Texas revenue of $500,000 or more in the preceding 12 calendar months | Counts taxable and non-taxable sales and marketplace sales. A permit is needed by the first day of the fourth month after exceeding it. |
| Florida | Over $100,000 of taxable remote sales in the previous calendar year | State rate 6% plus any county surtax. |
| New Mexico | $100,000 or more of taxable gross receipts in the previous calendar year | Gross receipts tax, rate varies by location. |
| Wyoming | Over $100,000 of gross revenue into Wyoming | State rate 4% plus local taxes. |
| Delaware | No state or local sales tax | Delaware charges a gross receipts tax on sellers doing business there. |
Your LLC's state of formation does not decide where you owe sales tax. A Wyoming LLC selling to customers in Texas and California follows Texas and California rules. For formation state choices, see our Wyoming vs Delaware vs New Mexico comparison.
A practical check for Amazon sellers
- List your channels. Amazon, other marketplaces, your own store, wholesale. Only marketplace sales can be covered by facilitator laws.
- Map your inventory. Note every state where FBA or a third-party warehouse holds your stock, now and over the past year.
- Total sales by state. Add marketplace and direct sales for each state and compare them with that state's threshold and measuring period.
- Read each state's marketplace rules. Check whether marketplace sellers with nexus must still register and file.
- Register before collecting. Get the permit first, then charge tax on direct sales. Florida, for example, expects you to register before you start taxable activity.
- Diary the returns. Each permit comes with a filing schedule, and returns are due even in months with no taxable direct sales.
Registering and filing where you need to
Each state runs its own registration. The LLC registers, not you personally, using its EIN, formation documents and details of its owners and responsible people. Texas says there is no fee for the permit, though it may ask for a security bond, and asks you to allow 2 to 3 weeks for the permit to arrive. Florida says that in most cases you must register before you begin business activities subject to its taxes.
After registration, the state assigns a filing frequency, such as monthly, quarterly or yearly, and you file on that schedule until you close the permit. If you stop selling into a state, close the account rather than let returns lapse.
Borderless Filings registers LLCs for state sales tax permits: we confirm which states you have asked us to register in, prepare each application from your documents, submit it and track it in your portal. We do not decide nexus for you; that is a tax question, and a sales tax adviser can review your data if the position is unclear. See our sales tax registration service for what is included.
Income tax is a separate question
Sales tax nexus and US income tax are different tests. Holding inventory in the US, or having people act for you there, can raise the question of whether a non-resident owner is engaged in a US trade or business, which can bring federal and state income tax filings such as Form 1040-NR. That depends on your facts and needs advice from a US tax professional. Our guide to US LLCs for non-residents explains the basic filing picture.
Selling into the UK as well? Our guide to UK VAT for non-resident sellers covers the marketplace rules there, which work differently.
Sources
- Supreme Court of the United States: South Dakota v. Wayfair, Inc. (2018)
- Amazon: Marketplace Tax Collection
- Texas Comptroller: Remote sellers and marketplace FAQs
- Texas Comptroller: Remote sellers
- Texas Comptroller: Sales tax permit FAQs
- Texas Comptroller: Sales and use tax permit
- Florida Department of Revenue: TIP 21A01-03, remote sales and marketplace providers
- Florida Department of Revenue: Sales and use tax
- Florida Department of Revenue: Registering your business (DR-1N)
- California Department of Tax and Fee Administration: Remote sellers (Wayfair)
- New Mexico Taxation and Revenue Department: Determining nexus
- Wyoming Department of Revenue: Excise tax FAQs
- Delaware Division of Revenue: Gross receipts taxes
Fees, deadlines and rules on this page were last checked on 27 September 2026.