US Sales Tax for Amazon Sellers - State by State

The TL;DR for Indian FBA sellers

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:

1. A customer in California buys your product on Amazon.
2. Amazon calculates the correct CA sales tax (state + local).
3. Amazon adds it to the customer\'s total.
4. Amazon remits the tax to California Department of Tax and Fee Administration.
5. 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

When do you actually need to register for state sales tax?

Three scenarios:

1. 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.
2. 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.
3. 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.

Related reading

• US Sales Tax for Amazon Sellers (full guide)
• US LLC for Indian Sellers
• Sales Tax & IRS Compliance service