Amazon FBA sellers get a double message: Amazon collects the sales tax, so you do not have to. And then a state letter arrives about registration or a return. Both can be true. Marketplace laws moved the collection burden for some sales, but they did not erase every obligation. This guide explains where the lines are.
Marketplace facilitator laws
Most states have laws under which a marketplace facilitator, such as Amazon, collects and remits sales tax on sales it facilitates for third-party sellers. As a result, for many Amazon sales you do not charge or remit tax yourself. The scope varies by state, including what counts as a marketplace sale and what the facilitator must do. In Florida, for example, the Department of Revenue says marketplace providers must electronically register to collect and remit tax on sales they facilitate.
What FBA changes: physical nexus
Under FBA, Amazon may move your inventory among fulfillment centers in different states, often without you choosing the locations. Inventory stored in a state is a classic form of physical presence. That can create nexus in every state where your goods sit, which in turn can trigger registration and filing duties there even when Amazon collects the tax on the sales. Rules for what a state requires of a seller with only marketplace sales vary, so check each one.
Where your obligations may remain
- Sales made outside the marketplace, such as through your own website, wholesale, or other platforms, may still require you to collect and remit.
- Some states require registration, annual returns, or reports from sellers with physical presence even when the facilitator collects all tax.
- Exempt and wholesale sales require valid certificates.
- Use tax may be owed on inventory and supplies bought without tax for your own use.
- Income tax nexus is a separate question. Having inventory in a state can affect state income or franchise tax filing too.
How to find out where you stand
- 1Download the inventory placement and storage location data from your Amazon seller account to see which states hold your goods.
- 2Pull sales reports by ship-to state, separating marketplace-facilitated sales from direct sales.
- 3Check each state with inventory or significant sales for its registration and filing rules for sellers.
- 4Register where required, even if the expected tax is zero.
- 5Set a calendar for returns and annual reports.
Reconciling Amazon to your books
Amazon payouts are net of fees, refunds, advertising, and sometimes tax adjustments. Record gross sales, Amazon fees, FBA fees, advertising, and refunds as separate items so that income and expenses are correct, and reconcile the settlement reports to your bank deposits. Sales tax collected by Amazon is generally not your revenue or your liability when Amazon remits it, but the reports tell you how it was treated. See ecommerce accounting services.
Inventory and cost of goods sold
- Track inventory purchases, freight, and prep costs.
- Include units in Amazon's warehouses when counting inventory at year-end.
- Account for removals, disposals, and lost or damaged units.
- See cash vs accrual accounting for how inventory affects the accounting method.
If you have already missed registrations
Sellers sometimes learn about their obligations only after a state notice. Many states offer voluntary disclosure programs, but eligibility usually ends once the state contacts you. Get advice before responding. See sales tax audit help and sales tax filing services.
Other channels, same rules
If you also run a store of your own, the rules for those sales differ. See Shopify sales tax filing and sales tax nexus for online sellers.
Our sales tax compliance service reviews FBA footprints and handles registration and filing. To talk about your sales tax compliance, send your Amazon inventory locations and sales by state. This is general information, and state rules change.
