Physical nexus for Amazon sellers
Storing goods across various states through FBA can complicate sales tax obligations for Amazon sellers. This article explores these complexities and offers guidance on determining sales tax nexus in different scenarios.
When you sell via Amazon FBA that means that your goods are stored in Amazon warehouses. Generally speaking, when a seller stores goods in the territory of a State that means this seller has physical nexus in this state and needs to register for sales tax. However, some states made exemptions for sellers who only sell via marketplaces. If Amazon or other Marketplace is responsible for the sales tax collection on merchant’s sales in a state physical nexus may not lead to an obligation to register for sales tax.
Further, you can see a table where storage in the FBA warehouse doesn’t lead to registration.
However, when you start selling in the US Amazon you don’t know where your goods will be stored by Amazon. Just place your first order and you will see the final destination of your goods in the FBA warehouse and you will have around 30 days to register for sales tax.
Table: Physical nexus for Amazon sellers
| State | Can Amazon sales only create Economic nexus? | Amazon FC creates Physical Nexus? |
| Alabama | No | No |
| Alaska | No | No |
| Arizona | No | No |
| Arkansas | No | No |
| California | No | No |
| Colorado | No | No |
| Connecticut | Yes | Yes |
| Delaware | No sales tax | No sales tax |
| District of Columbia | Yes | No |
| Florida | No | No |
| Georgia | No | No |
| Guam | No sales tax | No sales tax |
| Hawaii | Yes | Yes |
| Idaho | No | No |
| Illinois | No | No |
| Indiana | No | Yes |
| Iowa | No | Yes |
| Kansas | No | No |
| Kentucky | No | Yes |
| Louisiana | No | Yes |
| Maine | No | Yes |
| Maryland | No | No |
| Massachusetts | No | No |
| Michigan | No | No |
| Minnesota | No | Yes |
| Mississippi | No | No |
| Missouri | No | No |
| Montana | No sales tax | No sales tax |
| Nebraska | Yes | Yes |
| Nevada | No | Yes |
| New Hampshire | No sales tax | No sales tax |
| New Jersey | Yes | Yes |
| New Mexico | Yes | Yes |
| New York | No | No |
| North Carolina | No | No |
| North Dakota | No | Yes |
| Ohio | No | No |
| Oklahoma | No | No |
| Oregon | No sales tax | No sales tax |
| Pennsylvania | No | No |
| Puerto Rico | No sales tax | No sales tax |
| Rhode Island | No | Yes |
| South Carolina | No | No |
| South Dakota | Yes | Yes |
| Tennessee | No | Yes |
| Texas | No | No |
| US Virgin Islands | No sales tax | No sales tax |
| Utah | No | Yes |
| Vermont | No | No |
| Virginia | No | No |
| Washington | Yes | Yes |
| West Virginia | Yes | Yes |
| Wisconsin | No | No |
| Wyoming | No | Yes |
If you see that your goods are stored in a state where you need to register, you can order a sales tax registration. As soon as Amazon remits sales tax from your sales your sales tax returns will be with zero amount of sales tax due. With Lovat–Amazon integration you can set an auto-pilot regime when your sales tax return data will be auto-uploaded and submitted to a relevant tax authority.