If you’re a non-US Amazon seller and you think Marketplace Facilitator laws mean you’re done with US sales tax — you’re about to learn the hard way that they don’t. Amazon collects on your marketplace sales in 45 states, but that does NOT eliminate your registration obligation, your filing obligation, or your liability for inventory-state nexus, off-Amazon sales, or back taxes the IRS and state DORs already know about through 1099-K data and Marketplace Tax Collection (MTC) reports.
This guide is written for the seller in Auckland, London, Cape Town, Berlin, or Sydney who has FBA inventory sitting in California, Texas, Pennsylvania and another dozen states, who doesn’t have an SSN, who doesn’t have a US bank account, and who is being told by the major SaaS sales tax platforms to “just register everywhere yourself” — without anyone explaining how, or whether they actually need to.
We’ll cover what MF laws really do (and don’t), how the two nexus triggers work for a foreign seller, how to get an EIN without an SSN, which inventory states are aggressive, how to reconcile Amazon’s MTC with your own filings, off-Amazon channel risk, the income-tax trap that state nexus questionnaires create, and how to clean up years of non-compliance through a VDA.
If you’d rather not figure this out yourself: Sales Tax Compliance USA is a done-for-you service that handles the entire stack — nexus assessment, EIN, registrations, MTC reconciliation, filings, remittance, sales tax audit defence — for a single fee. No software for you to learn. Book a free consultation.
Why Foreign Amazon Sellers Are Not Off the Hook (Even With Marketplace Facilitator Laws)
Bottom line: MF laws shift collection responsibility to Amazon for marketplace sales only. They do not eliminate your registration obligation, your filing obligation, your off-Amazon sales obligation, your physical-presence (inventory) nexus, or your audit risk.
What marketplace facilitator (MF) laws actually do
Every US state with a sales tax now has an MF law (the last holdouts adopted them between 2019 and 2021). The mechanism is simple: when a “marketplace facilitator” (Amazon, Walmart, eBay, Etsy, TikTok Shop) facilitates a sale to a customer in that state, the marketplace — not the third-party seller — is the legal collector and remitter of sales tax.
For example, California’s Marketplace Facilitator Act (AB 147) became effective October 1, 2019, and Texas enacted marketplace facilitator legislation with a specific effective date that should be confirmed against current Comptroller guidance before relying on it for prior-period exposure analysis. If you need to determine your Texas marketplace collection start date, contact us for a current review.. When Amazon ships your kettle from a Houston FBA warehouse to a Dallas customer, Amazon — not you — collects and remits the 8.25% Texas sales tax.
What MF laws do NOT cover for foreign sellers
This is where every generic guide stops and where every foreign seller gets in trouble. MF laws do not relieve you of:
- Registration in physical-presence (inventory) states. This is the single most misunderstood point in foreign-seller compliance. Storing FBA inventory in a state creates physical nexus — and most states require you to register and file regardless of whether 100% of your sales are MF-collected.
The Texas Comptroller is unambiguous on this. Per Texas Comptroller guidance generally provides that a marketplace seller must obtain a Texas sales and use tax permit if it has nexus with Texas independent of its marketplace sales, including through inventory stored in Texas warehouses such as Amazon FBA. If you have FBA inventory in Texas, contact us for a current review of your Texas registration obligations..
California’s CDTFA takes the same position: a marketplace seller is generally required to register with CDTFA if it has a sufficient physical presence in California, including maintaining inventory in California.
Pennsylvania’s Department of Revenue requires online retailers with economic presence (over $100,000 in PA annual gross sales) to register, collect and remit Pennsylvania sales tax.
- Off-marketplace sales. Anything you sell through Shopify, BigCommerce, your own website, wholesale, B2B, TikTok Shop (in some jurisdictions), or any channel that isn’t a registered MF, you collect and remit yourself.
- Use tax on samples, returns repurposed for promotion, and inventory withdrawn from FBA for personal/business use.
- Zero / informational returns. Once you’re registered in a state, you generally must file even if Amazon collected 100% of your tax. Filing nothing does NOT mean you’re not obligated to file.
The 1099-K, W-8BEN-E, and state DOR data-sharing reality
Amazon issues you (or your foreign entity) a Form 1042-S or, depending on entity classification and W-8BEN-E declarations, includes you in 1099-K reporting. The IRS and state DORs share this data. For tax year 2025 and beyond, the federal 1099-K reporting threshold is $20,000 and more than 200 transactions under the One, Big, Beautiful Bill (see IRS FAQs on the Form 1099-K threshold). — the dollar figures and timing have moved several times, so treat the threshold as “low and getting lower.”
State DORs run automated matches against marketplace-reported gross receipts data. If Amazon reported $480,000 of California-shipped sales under your seller account and you have no California Seller’s Permit on file, expect a nexus questionnaire — eventually escalating to a Notice of Determination if you ignore it.
The Two Nexus Triggers Every Foreign Amazon Seller Must Track
Bottom line: physical nexus (FBA inventory) registers you in roughly 15-20 states regardless of revenue. Economic nexus (sales volume) registers you in additional states once you cross dollar thresholds — which range from $100,000 to $500,000 depending on the state.
Physical nexus: FBA inventory in a state
Every state with a sales tax treats inventory stored in the state as physical-presence nexus. Amazon’s “Inventory Placement Service” and “Amazon Warehousing & Distribution” (AWD) routinely move your stock across 20+ fulfillment centres without your specific approval — and you bear the nexus consequences.
Once even a single unit of your stock arrives at a fulfillment centre in a given state, you’ve established physical nexus. The state doesn’t care that you didn’t choose the warehouse. The state doesn’t care that you have no employees, office, or US presence beyond that inventory.
Economic nexus: how marketplace sales count toward thresholds
Wayfair (2018) authorised states to require sales tax collection from sellers with no physical presence based purely on economic activity. Most states’ thresholds settled at $100,000 in gross sales or 200 transactions over the prior calendar year. But the two largest economies are outliers:
- California’s economic nexus threshold is $500,000 in total combined sales of tangible personal property delivered into California, with no transaction-count alternative.
- Texas’s economic nexus threshold is $500,000 in Texas gross revenue over the preceding 12 calendar months.
The aggregation question matters enormously: does the state count Amazon-facilitated sales toward your threshold? California’s threshold language references “total combined sales” which is broadly interpreted to include marketplace-facilitated sales. Other states explicitly exclude marketplace-facilitated sales from the seller’s threshold calculation. This is a state-by-state question — see our economic nexus thresholds tracker for the current matrix.
Click-through and affiliate nexus
Largely superseded by Wayfair-era economic nexus statutes. If you’re running affiliate programs with US-based affiliates, mention it to your advisor — but for most pure-FBA foreign sellers, this is not the primary risk.
Step-by-Step: How a Foreign Seller Registers for US Sales Tax
Bottom line: you can register without an SSN and without a US bank account in most states, but the process is paper-based, slow, and varies by state.
Step 1: Get an EIN without an SSN/ITIN
Form SS-4 is the IRS application for an Employer Identification Number. As a foreign entity, you cannot apply online — the online form requires an SSN or ITIN for the responsible party.
The path for non-US entities: complete Form SS-4 with the foreign entity’s responsible party listed (officer, director, owner) and submit by international fax or by phone to the IRS international business line. Typical turnaround is a few business days for fax submissions; phone applications can issue an EIN within the call.
For more detail, see our EIN-for-foreign-sellers guide.
Step 2: Determine your nexus footprint
Before you register anywhere, you need:
– A current list of states where Amazon has stored your FBA inventory (Inventory Event Detail Report from Seller Central — pull at least 24 months back).
– Your Amazon-collected sales by state for the prior 12 months (MTC report).
– Your off-Amazon sales by state.
This produces your nexus map. Without it, you’ll either over-register (wasted fees and ongoing filing obligations) or under-register (audit exposure).
Step 3: Register in each nexus state
The Streamlined Sales Tax Project (SSTP) Central Registration System lets you register in all Sellers can register in the 23 Streamlined Sales Tax Full Member States (plus Associate Member Tennessee) through a single application via the SSTRS at streamlinedsalestax.org.. SSTP is the cleanest path for sellers with broad multistate nexus and no US presence.
Non-SSTP states (including the big ones — California, Texas, Pennsylvania, Florida, New York) require individual registration through each state’s DOR portal.
Critical foreign-seller blockers:
- California: the CDTFA online registration system asks for SSN/ITIN of officers. Foreign-officer applicants typically must use alternative ID (foreign passport, matricula consular). The Seller’s Permit itself has no fee, but a security deposit may be required at CDTFA’s discretion based on creditworthiness.
- Texas: the online application explicitly states you cannot use it without an SSN. Foreign owners/officers must apply using paper Form AP-201, submitted by mail, email to sales.applications@cpa.texas.gov, or fax to 512-936-0010, with typical processing times of 2-3 weeks.
- Pennsylvania: registration via myPATH portal; manageable for foreign entities.
Most states issue sales tax permits without requiring a US bank account at the time of registration, but a few will block payment setup until you have one. ACH debit from foreign accounts is generally not supported; you’ll need either a US bank account, a US payment provider intermediary, or you’ll pay by ACH credit / wire / credit card (with convenience fees).
Step 4: Set up Amazon tax settings and external channel collection
In Seller Central → Tax Settings, add your state registration numbers. Amazon uses these to populate certain tax reports and to confirm MF treatment. Note: adding a tax number to Amazon does NOT create your registration — you must register with the state first.
For Shopify, BigCommerce, or your own site: configure tax collection per state where you have nexus. Most platforms integrate with a SaaS rate engine for automated calculation — but you remain liable for the filing.
Step 5: Step 5: File and remit sales tax returns on time
Filing frequency is assigned by each state DOR based on your tax liability:
– High-volume states (Texas, California): often monthly with prepayment requirements at large-filer thresholds.
– Mid-volume: quarterly typical.
– Low-volume (under a few hundred dollars annual liability): annual.
Texas sales tax returns are due on the 20th of the month following the period. California sales and use tax return due dates depend on the filing frequency CDTFA assigns to the business; monthly, quarterly, quarterly prepay, and annual filers each follow distinct schedules published by CDTFA..
Miss a deadline and you’ll face penalties of In California, the late-filing and late-payment penalties are each 10% of the tax due, and when both apply the combined penalty is capped at 10% (not stacked); see CDTFA Publication 75., plus interest.
FBA Inventory States: The Foreign Seller’s Risk Map
Bottom line: roughly 15-20 states have at least one Amazon fulfillment centre. Three of them — California, Washington, and Texas — are aggressive enforcers against foreign sellers. Pennsylvania has historically been the most rigid on registration. The rest range from mildly enforcing to silent.
States with significant Amazon fulfillment center concentration
Amazon’s primary FBA states (subject to ongoing change as Amazon adds and closes facilities) include California, Texas, Pennsylvania, New Jersey, Illinois, Georgia, Florida, Arizona, Tennessee, Nevada, Ohio, Indiana, Washington, Maryland, and Kentucky. For your specific footprint, pull the Inventory Event Detail Report from Seller Central — Amazon does not always notify you when stock moves to a new state.
States that aggressively pursue foreign FBA sellers
California runs the most sophisticated foreign-seller enforcement. CDTFA cross-references marketplace data, federal customs/import data, and Amazon storage location data. California’s $500K economic threshold is high, but FBA inventory triggers physical nexus regardless.
Texas Pub 94-170 is the canonical document. Foreign FBA sellers are explicitly named. Comptroller enforcement has accelerated since 2022.
Washington has historically been a leader in pursuing FBA sellers; their Department of Revenue was running marketplace-seller compliance programs years before most states.
Pennsylvania is the textbook “register-even-if-100%-MF” state. PA DOR’s stated position is that Pennsylvania requires marketplace facilitators and remote sellers exceeding the state’s economic nexus sales threshold to register, collect, and remit Pennsylvania sales tax. If your Pennsylvania sales are approaching the threshold, contact us for a current review of your registration obligations..
States with foreign-seller-friendly VDA programs
If you’ve been operating with FBA inventory in a state for years without registering, going forward without addressing the past leaves you exposed for the lookback period (typically 3-4 years, sometimes longer).
The Multistate Tax Commission’s Multistate Voluntary Disclosure Program (MVDP) lets you negotiate with multiple states simultaneously, anonymously, through a single intake. Foreign entities are eligible. Standard outcome: 3-4 year lookback, penalty waiver, interest still due. See our VDA guide for details.
Marketplace Tax Collection (MTC) Mechanics on Amazon
Bottom line: Amazon collects in all 45 sales-tax states + DC, but registered sellers must still file returns reporting the marketplace sales — typically as a deduction line — in most states where they’re registered.
What Amazon collects automatically
Amazon’s Marketplace Tax Collection covers all states with active MF laws (every sales-tax state). Tax is calculated at checkout based on the destination state and applicable local rates, collected from the customer, and remitted by Amazon to the relevant state DOR.
Where you still report (zero-return obligations)
Once you have a state Seller’s Permit, you’re a registered taxpayer. The state expects a return on every filing date — even if your Amazon-only sales were all MF-collected. The mechanic varies:
- Texas: report gross sales, deduct marketplace-facilitated sales on the appropriate schedule line, remit any non-marketplace tax. Filing required.
- California: report total sales, exclude MF-collected on Schedule G2 (Marketplace Sales), remit any non-MF tax. Filing required.
- Pennsylvania: report and exclude MF sales as appropriate; filing required.
Filing nothing because Amazon collected everything is the most common foreign-seller mistake and the most common source of late-filing penalties.
Reconciling Amazon’s collected tax with your state filings
Reports needed each filing period:
1. Amazon Sales Tax Calculation Report (per state, per period).
2. Marketplace Tax Collection Report (the tax Amazon collected and remitted on your behalf).
3. Your off-Amazon sales by state (Shopify, etc.).
Reconcile total marketplace sales (Amazon report) against the marketplace-deduction line on each state return. Discrepancies are the #1 audit trigger.
This is one of the things our done-for-you service handles end-to-end — you don’t pull reports, we do.
Off-Amazon Channels: Where Foreign Sellers Get Caught
Bottom line: every dollar you sell through your own Shopify, BigCommerce, direct B2B, or any non-MF channel counts toward economic nexus thresholds AND must be self-collected and self-remitted. Mixing channels for the same SKU is where most accounting errors happen.
Shopify, BigCommerce, and direct-website sales
Shopify does NOT automatically remit sales tax for you — Shopify is not a marketplace facilitator. Shopify Tax (and a SaaS rate engine plugins) calculate the rate at checkout, but the seller is the legal collector and remitter. You must register in each state where you have nexus from Shopify sales, file returns, and remit.
Wholesale and B2B channels (resale certificates)
Selling to US-based resellers (e.g., a Texas distributor buying your kettles to resell)? Collect a valid resale certificate from the buyer. Most states accept their own state-specific resale form; some accept the MTC Uniform Sales & Use Tax Resale Certificate. California in particular has CDTFA-specific forms (CDTFA-230 series) and does not always accept the Uniform Certificate.
See our resale certificates by state guide.
TikTok Shop, Walmart Marketplace, eBay — MF coverage varies
Walmart, eBay, and Etsy all act as marketplace facilitators in MF states — they collect and remit. TikTok Shop has been adding MF coverage state-by-state; verify current coverage before assuming. Always confirm the marketplace’s MF status per state — gaps mean YOU collect and remit.
Income Tax and Treaty Considerations (The Hidden Trap)
Bottom line: registering for sales tax is not the same as registering for income tax, but the registration process often triggers a state nexus questionnaire that probes income/franchise tax — and FBA inventory has been argued by some states to create state income tax nexus despite federal treaty protection.
State sales tax registration does not equal income tax obligation — but it can trigger one
When you register for a Seller’s Permit in California, CDTFA shares your registration with the Franchise Tax Board (FTB). FTB may then send you a nexus questionnaire asking about your activities in California — including whether you have inventory there. Same dynamic in many other states.
Effectively Connected Income (ECI) and FBA inventory
For US federal income tax, foreign sellers may have ECI if they have a US trade or business. Holding inventory in the US through FBA, having it sold and shipped from US warehouses, can constitute a US trade or business under IRS analysis. ECI is taxable at graduated US rates and requires Form 1120-F (for foreign corporations) or 1040-NR.
Tax treaty Permanent Establishment analysis
US tax treaties with the UK, South Africa, Germany, Australia, and most major economies override federal-level taxation on ECI if no Permanent Establishment (PE) exists. Whether FBA inventory creates a PE is a fact-specific analysis turning on:
– Whether the warehouse is “at the disposal” of the seller.
– Whether activities at the warehouse are “preparatory or auxiliary” or core business activities.
The IRS position has historically favoured “no PE from third-party warehousing” but recent guidance and audit practice has tightened. State-level income tax does NOT honour federal treaties in most states, so even if you have treaty PE protection at federal level, California, New York, and Texas may still claim state income tax / franchise tax nexus.
This is where the sales-tax registration intersects most painfully with the broader US tax picture for foreign sellers. PL 86-272 protection — which historically shielded foreign and out-of-state sellers from state income tax on mere solicitation — has been narrowed by the MTC’s revised 2021 statement (cookies, post-sale chat, etc.). Adoption by states varies.
This is genuinely hard to navigate alone. If you’re a foreign seller with FBA inventory in California, New York, or Texas and revenue over $1M, contact us for a current review.
Practical Compliance Stack for a Foreign Amazon Seller
Bottom line: software handles filings; specialists handle strategy, registrations, and clean-ups. Most foreign sellers need both — or a single done-for-you service that covers the full stack.
Software vs. specialist: when each makes sense
- SaaS sales tax platforms (the major plug-and-play tools): calculate rates at checkout, file returns. They don’t advise on whether you need to register, how to handle a foreign-entity registration without an SSN, how to do a VDA, or how to defend a sales tax audit.
- Bookkeeping integrations (A2X, Link My Books): convert Amazon settlements into clean accounting data. Essential for accurate book-to-tax reconciliation and for surviving an audit.
- Done-for-you specialist (us): handle nexus assessment, registrations, MTC reconciliation, filings, remittance, audit defence, VDAs, treaty/income tax coordination — for a single fee.
Annual cost expectations
For a foreign Amazon seller with FBA inventory in ~15 states:
– Registration costs: most states are $0 fee for the permit itself; a few charge $10-100.
– Annual filing volume: ~120-180 returns per year (15 states × monthly/quarterly mix).
– Bookkeeping (A2X or equivalent): ~$50-300/month depending on volume.
– Either software fees + your time, or a service fee for done-for-you.
The hidden cost in the DIY path is your time and your risk. Foreign sellers who try to DIY US sales tax across 15 states typically spend 10-20 hours per month and still file errors — which get caught in audit.
If You’re Already Behind: Voluntary Disclosure Agreements (VDAs)
Bottom line: if you’ve had FBA inventory in states for years without registering, simply registering forward leaves liability exposure for the lookback period. A VDA caps the lookback (typically 3-4 years), waives penalties, and lets you regularise quietly.
When a VDA beats simply registering forward
If you register forward today in California, the state can still assess sales tax on the prior 8 years (no return filed → extended SOL applies). A VDA negotiates the lookback down — typically to 3-4 years — and waives penalties. Interest is usually still due.
MTC multistate VDA vs. direct state VDA
- MTC Multistate Voluntary Disclosure Program: one application, anonymous, covers multiple participating states. Best when you have nexus in many states.
- Direct state VDA: state-by-state. Best when you have one or two problem states or when MTC doesn’t cover the state you need (CDTFA runs its own In-State and Out-of-State VDA programs that are not MTC).
Typical lookback and penalty waiver outcomes
- Lookback: 3-4 years standard.
- Penalties: typically waived.
- Interest: typically due (some states reduce).
- Anonymous start: yes, in most programs.
- Eligibility: must not have been contacted by the state DOR yet, must not be under audit.
Foreign entities are eligible for nearly all state VDA programs. See our VDA guide for the full state matrix.
Don’t Want to Figure This Out Yourself?
This article gave you the map. Walking the map — getting an EIN, registering in 15 states without an SSN, filing 180 sales tax returns a year, reconciling Amazon’s MTC, handling state nexus questionnaires, dealing with the FTB cross-reference, doing a VDA for the 4 years you didn’t register — is a full-time job.
Sales Tax Compliance USA handles your entire US sales tax compliance — registration through filing — for a single fee. No software for you to learn. No 50 separate state portal logins. No reconciliation spreadsheets. We do it.
→ Book a free consultation
→ See what our service includes
Frequently Asked Questions
Do foreign Amazon sellers need to register for US sales tax if Amazon collects it for them?
In most cases, yes. Marketplace Facilitator laws shift collection to Amazon, but they do not eliminate your registration obligation if you have physical nexus from FBA inventory in a state. Texas Comptroller guidance indicates marketplace sellers with FBA inventory in Texas may have a registration obligation independent of marketplace-collected tax. If you hold FBA inventory in Texas while selling through a collecting marketplace, contact us for a current review.. California and Pennsylvania take similar positions.
Does FBA inventory in a state create sales tax nexus for a foreign seller?
Yes, in every sales-tax state. Storing tangible personal property in a state — including in a third-party fulfillment centre like an Amazon FBA warehouse — is physical nexus under nearly every state’s statute. The seller’s foreign domicile is irrelevant.
Can a non-US resident get an EIN without an SSN or ITIN?
Yes. Foreign entities and foreign individuals apply via paper Form SS-4 submitted by international fax or by phone to the IRS international business line. The online EIN application requires SSN/ITIN and is not available to non-US applicants. See our EIN guide for foreign sellers.
Do marketplace sales on Amazon count toward state economic nexus thresholds?
It depends on the state. Some states explicitly include marketplace-facilitated sales in the seller’s threshold calculation; others explicitly exclude them. California’s $500,000 threshold is broadly interpreted to include marketplace sales. The rule varies, so check the specific state’s statute or our economic nexus thresholds tracker.
Which US states are most aggressive about pursuing foreign Amazon sellers?
California (CDTFA), Washington, Texas, and Pennsylvania have historically been the most active in identifying and pursuing foreign FBA sellers who have not registered. California in particular cross-references marketplace data, customs/import data, and FBA storage data.
What is the difference between Marketplace Tax Collection and seller-collected sales tax?
Marketplace Tax Collection (MTC) means Amazon, as a marketplace facilitator, collects sales tax from the customer and remits it to the state on your behalf. Seller-collected sales tax means you (the seller) collect tax at checkout, file the return, and remit it. MTC applies only to your Amazon sales; off-Amazon sales (Shopify, your website, wholesale) are seller-collected.
Do I need a US bank account to register for sales tax in a US state?
Most states do not require a US bank account at registration, but several block ACH-debit payment setup without one. Workarounds include ACH credit, wire transfer, or credit card payment (with fees). A few states’ filing portals work better with US banking — your service provider can typically handle remittance from a foreign source if structured correctly.
How far back can a US state assess sales tax against a foreign Amazon seller?
If you registered and filed returns: typically 3-4 years (varies by state). If you never registered or never filed: the statute of limitations is generally extended — California’s sales tax statute of limitations has a standard look-back period that extends substantially when no return was filed, and the exact tolling depends on filing history and any fraud allegations. If you have unfiled California returns or are facing a CDTFA audit, contact us for a current review of your exposure window.. Texas has a defined sales tax statute of limitations measured from return filing or due date, with extended look-back periods where no return was filed or fraud is alleged. If you have unfiled Texas returns or a pending Comptroller inquiry, contact us for a current review of your SOL exposure.. Practical implication: no SOL has started running on you for periods you never filed.
Does registering for sales tax mean I also owe US federal income tax?
Not automatically — they’re separate regimes. But sales tax registration often triggers a state nexus questionnaire that probes income/franchise tax. And independently, holding FBA inventory may constitute a US trade or business creating ECI for federal income tax purposes — though tax treaties (UK, SA, Germany, Australia, etc.) often provide PE protection at the federal level. State income tax usually does not honour federal treaties. This is fact-specific; contact us for a current review if revenue is material.
Can a foreign Amazon seller use a Voluntary Disclosure Agreement to fix past non-compliance?
Yes. Foreign entities are eligible for nearly all state VDA programs and for the MTC Multistate Voluntary Disclosure Program. Typical outcome: 3-4 year lookback, penalty waiver, interest due. Must apply before being contacted by the state DOR. See our VDA guide.
Last verified: 2026-05-10. Author: Paul le Roux, CA(SA), tax practitioner.
This article is for informational purposes only and does not constitute tax advice. Consult a licensed tax professional before acting on any of this content.
