US Sales Tax for Amazon Sellers - State by State
The single most-confused topic for Indian Amazon sellers. Short answer: Amazon collects and remits sales tax on your behalf in all 45+ marketplace facilitator states. You generally don\'t need to register, file, or remit. The longer answer - and the exceptions - are below.
The TL;DR for Indian FBA sellers
- Amazon collects sales tax on your behalf in 45+ states under marketplace facilitator (MF) laws.
- You don\'t register for sales tax in those states purely from FBA sales.
- Exceptions: if you sell also via your own website or other marketplaces, or you have a physical office/employee in a state, you may have separate obligations.
- Federal income tax (Form 5472 + 1120) is unrelated to sales tax and IS required annually for your US LLC.
- State income tax only applies if you have nexus in that state (typically physical presence). FBA-only inventory presence generally doesn\'t create state income tax nexus.
Marketplace Facilitator (MF) overview
Following the 2018 South Dakota v. Wayfair Supreme Court decision, every state with a sales tax has enacted a "Marketplace Facilitator" law. These laws require marketplaces (Amazon, eBay, Etsy, Walmart Marketplace) to collect and remit sales tax on behalf of third-party sellers automatically.
What this means in practice for an Indian Amazon seller:
- A customer in California buys your product on Amazon.
- Amazon calculates the correct CA sales tax (state + local).
- Amazon adds it to the customer\'s total.
- Amazon remits the tax to California Department of Tax and Fee Administration.
- You see the sales-tax line item as "marketplace tax" in your Seller Central reports - you didn\'t touch it, you don\'t owe it, you don\'t file anything.
This applies to all 45+ states with a sales tax. The 5 states without statewide sales tax (Alaska, Delaware, Montana, New Hampshire, Oregon) have nothing to collect anyway.
The 10 most-relevant states
| State | Rate range | MF since | Economic nexus | Note |
|---|---|---|---|---|
| California | 7.25-10.25% | 2019 | $500K | Highest population. Critical for any seller. |
| Texas | 6.25-8.25% | 2019 | $500K | Many Indian LLCs domiciled here. Home state matters. |
| New York | 4-8.875% | 2019 | $500K + 100 trans | NYC high-volume. Strict enforcement. |
| Florida | 6-8% | 2021 | $100K | Later-MF state. Recent enforcement priority. |
| Illinois | 6.25-11% | 2020 | $100K or 200 trans | Complex local rates. Chicago zone. |
| Pennsylvania | 6-8% | 2019 | $100K | No sales tax on clothing/textiles (advantage for apparel sellers). |
| Ohio | 5.75-8% | 2019 | $100K or 200 trans | Standard rules. Mid-tier complexity. |
| Georgia | 4-8.9% | 2020 | $100K or 200 trans | Savannah FBA presence makes nexus likely. |
| North Carolina | 4.75-7.5% | 2019 | $100K or 200 trans | Growing FBA presence (Charlotte FCs). |
| Washington | 6.5-10.4% | 2018 | $100K | No state income tax. First-mover on marketplace facilitator. |
When do you actually need to register for state sales tax?
Three scenarios:
- Selling outside Amazon: if you also sell on Shopify (your own site), eBay (sometimes MF, sometimes not), or wholesale to US distributors, those non-MF channels create direct sales-tax obligations once you exceed economic-nexus thresholds.
- Physical presence: if you rent office space, hire a US employee, or own US property in a state, that creates "physical nexus" - separate from sales tax, this can also trigger state income tax obligations.
- Pre-2018 grandfathered situations: very rare for new Indian sellers; mostly relevant for legacy US-based sellers.
For a standard Indian Amazon FBA-only seller - selling exclusively on Amazon US with FBA fulfillment, no US office, no US employees - sales tax registration in any state is generally not required.
Compliance work we handle for clients
- Annual Form 5472 + 1120 filing: required for all foreign-owned US LLCs. We coordinate with our US CPA partner. ~$650-1,200 annually.
- State franchise tax / annual report: Texas franchise tax (typically $0 for LLCs under $1.23M revenue), Wyoming annual report ($60), Delaware annual franchise tax ($300). We file these.
- BOI / FinCEN: required Beneficial Ownership Information report. We file initial + update on changes.
- Sales tax registration (if needed): only if non-Amazon channels create obligations. We register and handle quarterly filings if required.
State-specific quote
Most Indian Amazon sellers need: federal LLC compliance + your home state\'s annual filings. We handle both. Brand tier includes everything.
Get a tax compliance quote →