Introduction

Selling through Fulfillment by Amazon (FBA) changes where your business has a presence. When Amazon stores or ships your products from warehouses in different states, that storage can create physical nexus and a requirement to register for sales tax in those states. After the Supreme Court’s decision in South Dakota v. Wayfair, Inc. (2018), states can also require registration based on economic nexus — typically a sales-dollar or transaction threshold. This guide explains how to evaluate nexus, register correctly, and reduce risk.

Why registration matters for FBA sellers

  • Registration establishes your legal obligation to collect sales tax and file returns in a state.
  • Without registration you can face back taxes, interest, penalties, and in extreme cases, liens or collection actions by a state revenue department.
  • Even if Amazon collects tax as a marketplace facilitator in a state, registration may still be necessary to obtain resale certificates, claim exemptions, or to file required informational returns.

Authoritative context

  • The Supreme Court’s South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018) allowed states to impose tax obligations based on economic activity rather than physical presence.
  • State guidance and updated thresholds are published by each state’s department of revenue and aggregated at the State Tax Administrators site (taxadmin.org).

Step-by-step: How to determine whether to register

1) Map your inventory and order fulfillment locations

  • Download Amazon reports (Inventory Event Detail Report and Fulfillment Reports in Seller Central) to see in which states Amazon currently stores or transfers your stock.
  • Treat each state that stores your inventory as a potential physical nexus state until you confirm otherwise.

2) Check marketplace facilitator coverage

  • Many states have marketplace facilitator laws that require Amazon to collect and remit sales tax on behalf of third-party sellers for certain sales. In those states Amazon may collect tax for consumer-facing transactions, but the law varies by state and product type.
  • Confirm whether Amazon is collecting tax in each state and for which transactions by checking Amazon Seller Central and the relevant state DOR guidance. Even where Amazon collects tax, you may still need to register to obtain resale certificates or to report exempt sales.

3) Evaluate economic nexus thresholds

  • After Wayfair, most states set economic thresholds that trigger registration — common triggers are $100,000 in sales or 200 separate transactions in the previous 12 months, but thresholds vary by state and some states use different dollar levels or a transactions-only test.
  • Use the most recent state DOR guidance or the aggregated resources on taxadmin.org to confirm current thresholds.

4) Consider other nexus triggers

  • Inventory in a third-party warehouse (like Amazon) generally creates physical nexus in that state.
  • Activities such as using affiliate marketers, attending trade shows, having returns processed in a state, or hosting employees or contractors may also create nexus.

How to register in practical terms

1) Prepare required information

  • Business legal name and DBA (as applicable)
  • Federal Employer Identification Number (EIN) or Social Security Number for sole proprietors
  • Business address, contact information
  • NAICS code (industry classification) and initial sales estimates by state
  • Banking information for electronic payments (where required)

2) Register online with the state Department of Revenue

  • Most states provide online registration portals (search “[State] sales tax permit registration” or use the link on the state DOR website). The registration may be called a seller’s permit, sales tax permit, or sales and use tax license.
  • Some states allow registration through multiservice vendors or combined registration portals for employers and sellers.

3) Set up tax collection in Amazon Seller Central

  • Once you have a permit number for a state, enter it in Amazon Seller Central tax settings so Amazon can display the correct tax on buyer orders if required, and apply the correct tax behavior for returns and exemptions.
  • If Amazon is the marketplace facilitator and already collects tax, check whether your permit is still needed for resale certificates or for inventory purchase exemptions.

4) File and remit returns on schedule

  • Filing frequency (monthly, quarterly, annual) depends on the state and your sales volume. Follow your state’s assigned filing frequency and use the state portal to file electronic returns.
  • Even if you have no taxable sales in a reporting period, some states require a ‘‘zero’’ return.

Common scenarios and examples

Example 1 — Physical nexus from inventory

A seller based in Florida uses FBA. Amazon distributes the seller’s inventory across several fulfillment centers, including ones in Georgia and Ohio. Because the seller’s inventory is physically stored in those states, the seller is required to register for and collect sales tax in Georgia and Ohio (physical nexus), even if Amazon remits some tax as a marketplace facilitator. The seller registers, obtains resale certificates for inventory purchases, and configures Amazon to use the seller’s permit where needed.

Example 2 — Economic nexus after Wayfair

A second seller located in Texas sells nationwide. In the last 12 months they had $120,000 in sales to buyers in State X. That state’s economic nexus threshold is $100,000 in sales. Even though the seller has no physical presence in State X, they must register, collect, and remit sales tax once the threshold was crossed.

Why sometimes you must register even when Amazon collects tax

  • Resale certificates: Sellers may need a seller’s permit to issue resale certificates when purchasing inventory wholesale.
  • Product taxability: In some states the marketplace facilitator collects tax for most retail sales but not for certain product categories or taxable services — a seller’s registration helps ensure correct handling of those exceptions.
  • Registration records: States may require sellers with inventory on the ground to have an active registration for audit or reporting reasons, regardless of who collected the tax.

Recordkeeping, audits, and penalty avoidance

  • Keep precise inventory reports, shipping records, purchase invoices, and marketplace transaction reports for at least three to seven years (requirements vary by state).
  • Track the date you crossed any economic thresholds — use a rolling 12-month lookback to determine when nexus was established.
  • If notified of a state audit or nexus notice, respond promptly. If you find you should have been registered earlier, many states offer voluntary disclosure programs that limit lookback periods and reduce penalties if you proactively register and correct prior liabilities (check the state DOR voluntary disclosure policy).

Practical tips and professional guidance (from experience)

  • Quarterly nexus checks: In my practice I advise clients to run inventory and sales nexus reviews at least quarterly. Small changes in Amazon’s distribution network can create new nexus in unexpected states.
  • Use automation: Tax automation tools reduce errors and accelerate compliance. See FinHelp’s guide to sales tax automation tools for small e-commerce businesses for vetted options and integrations.
  • Keep resale certificates organized: Maintain an electronic library of state resale certificates; states accept seller-issued resale documentation for exempt purchases.
  • When in doubt, register: Registering in a state before receiving an audit notice is often less costly than correcting years of uncollected tax and accruing penalties.

Further reading and internal resources

  • For detailed tests on when remote sellers establish nexus, see our article on “state sales tax nexus tests” which walks through practical examples and thresholds: State Sales Tax Nexus: Practical Tests for Remote Sellers in 2025.
  • For marketplace-specific guidance, read “Sales Tax Compliance for Marketplace Sellers: Registration and Reporting” to understand how marketplace facilitator laws affect FBA sellers.
  • To evaluate automation options that integrate with Amazon, use our resource “Sales Tax Compliance Automation: Tools for Small E-commerce Businesses.”

(Internal links)

Authoritative sources

  • South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018).
  • State revenue departments and guidance aggregated at State Tax Administrators (taxadmin.org).
  • Amazon Seller Central tax help pages for marketplace collection rules (sellercentral.amazon.com/help).

Professional disclaimer

This article is educational and not tax or legal advice. State rules change frequently; consult a tax professional or your state department of revenue to confirm requirements for your specific business, and consider working with a CPA or sales tax specialist familiar with marketplace and FBA scenarios.

Final checklist for FBA sellers

  • Map current Amazon inventory locations.
  • Confirm whether Amazon is collecting tax in each state and which transactions it covers.
  • Compare your sales/transaction history to state economic nexus thresholds.
  • Register for a seller’s permit where required and enter permit numbers into Amazon.
  • Set up filing and payment schedules and keep detailed records.
  • Reassess nexus and registrations regularly, especially after product line changes or growth.

By taking these steps you’ll reduce the chance of unexpected tax liabilities and maintain smoother operations as your FBA business grows.