This is general information, not tax advice. Rules change and vary by situation — consult a licensed CPA or tax professional before acting.
If you run an operating store across Amazon and your own site, "nexus" is the word that decides your paperwork. Most sellers assume Amazon made the problem disappear. It handled one part of it and quietly handed you the rest.
This guide breaks down where you actually owe, why FBA is the trap, and what it costs your margin. For the wider picture, start with our taxes and compliance guide.
What "nexus" means for an Amazon seller
Nexus is the connection that obligates you to collect and remit a state's sales tax. There is no federal sales tax — every rule is set state by state.
Two different things create it. One is a physical tie to the state. The other is pure sales volume into that state.
The confusing part is that nexus and collection are separate questions. You can have nexus in a state where Amazon already collects the tax, and still owe that state a registration and a return.
Does Amazon handle your sales tax?
Yes — for your Amazon orders. Amazon is a marketplace facilitator, which means the law makes the platform collect and remit the tax on sales made through it. As of 2026, every US state that has a sales tax has a marketplace facilitator law, according to Shopify.
So the tax on a shirt a buyer orders on Amazon.com is calculated, collected, and sent to the state by Amazon. Same for eBay, Etsy, and Walmart orders. You do not touch it.
What Amazon does NOT do for you
Here is where sellers get burned. The facilitator law covers the marketplace channel only — it does nothing for the store you run yourself.
- Your own storefront. On your own Shopify site you are the seller of record. You must register, collect, file, and remit yourself wherever you have nexus. Our walkthrough on Shopify sales tax automation covers that side.
- Registration and filing in FBA states. Even where Amazon remits, a state can still require you to register and file a return because you hold inventory there — more on that next.
- Your income tax. Marketplace tax is sales tax only. You still owe income tax and self-employment tax on your profit.
The two ways you get nexus
Physical nexus: your FBA inventory is the trap
A physical tie to a state creates nexus: an office, an employee, a warehouse, or inventory stored there. For an FBA seller, that last one is the quiet killer.
When Amazon stores your units in a fulfillment center, many states treat that inventory as physical nexus for you — and per Beancount's 2026 nexus guide, FBA inventory in a state creates physical nexus regardless of who collected on the marketplace sale, without any dollar threshold.
That means Amazon can split your inventory across fulfillment centers in states you have never visited, and each one is a potential registration. The facilitator remits the tax, but the registration-and-filing duty can still land on you.
Economic nexus: the dollar thresholds
The second trigger is sales volume alone, created by the 2018 Supreme Court South Dakota v. Wayfair decision. Cross a state's dollar or transaction line and you have nexus even with zero physical presence.
The thresholds vary and you must check each state, but a common default is $100,000 in annual in-state sales, which Beancount reports applies in well over thirty states for 2026. The biggest markets sit higher — the same source lists California and Texas at $500,000.
One detail trips up multichannel sellers: in most states your Amazon sales still count toward your own economic-nexus threshold, even though Amazon remits that tax. The ConnectBooks state-by-state primer notes states like California, Connecticut, and Kansas count your marketplace sales toward the seller threshold. So your marketplace volume can push your own-store sales over the line.
A worked example: where a multichannel store actually owes
Say you run a POD apparel brand doing 900 orders a month at a $34 average order value — about $30,600 in monthly sales. Two-thirds flow through Amazon FBA and one-third through your own Shopify store.
- Amazon channel: 600 orders × $34 = $20,400/month. Amazon calculates and remits the sales tax on all of it. Your collect-and-remit duty on these orders is zero.
- Shopify channel: 300 orders × $34 = $10,200/month, or about $122,400 a year. You are the seller of record here. In any state where you cross the common $100,000 line, you must register and remit on your own-store orders.
- FBA inventory states: Amazon stores your units in, say, six fulfillment-center states. Each is a physical-nexus state — a potential registration and recurring return, even though Amazon handles the money.
Run the math on effort, not just dollars. If those six FBA states plus your home state each need a monthly or quarterly return, that is roughly 7 registrations and dozens of filings a year — before you count any economic-nexus state your Shopify sales trigger. That workload is the real cost, and it has nothing to do with the tax Amazon already paid.
The profit angle nobody mentions
Sales tax you collect is never your money — it is held for the state and passes straight through. The danger is treating it as revenue and spending it.
There is a second leak most POD sellers never plug: the tax your supplier charges you. When Printify, Printful, or Gelato produces an order, you are buying goods for resale, which should be exempt — but only if you file a resale certificate first. Without it you pay sales tax on every production order and then collect it again from your buyer, taxing the same item twice.
Set the certificate up on day one, because suppliers do not refund tax on past orders. Printful reviews a resale certificate in about two business days, and Printify processes one in roughly three to five business days.
One more number that confuses sellers: the 1099-K Amazon and your other processors send. Under the One Big Beautiful Bill, a processor only files one when gross payments exceed $20,000 and transactions exceed 200, per the IRS. That form reports gross dollars, not profit, and you owe income tax whether or not it arrives — see our breakdowns of the OBBBA 1099-K change and 1099-K vs 1099-MISC.
How Victor keeps your true margin in view
Compliance work matters because it eats the margin you already thin out with fees and ad spend. You cannot manage what you cannot see cleanly.
Victor is the AI employee inside PodVector AI. He computes true per-order profit on your Shopify store — pulling together every order, every ad dollar from Meta and Google Ads, and your real product cost from Printify, Printful, and Gelato — so the sales tax that passes through is never mistaken for revenue. He reprices your thin-margin SKUs, pauses the ad sets losing money, and builds the Klaviyo flows that lift repeat orders, then delivers the profit report to your Google Drive.
That gives you the one number this whole topic hinges on: what each product actually earns after costs, so a new filing obligation is a line item you planned for, not a surprise. Put Victor to work on your store.
FAQs
Do I need to collect sales tax if I only sell on Amazon?
Amazon collects and remits on your Amazon orders in every state with a facilitator law, so you do not collect that tax yourself. But holding FBA inventory in a state can still require you to register and file a return there, and you owe income tax on your profit regardless.
Does Amazon FBA create nexus in every state?
Only in states where Amazon actually stores your inventory, plus your home state. Amazon distributes units across fulfillment centers, so check your inventory placement reports to see which states you are in — each one is a potential registration.
Do my Amazon sales count toward economic nexus for my own store?
In most states, yes. Even though Amazon remits the tax, your marketplace sales often count toward the state's economic-nexus threshold, which can push your own-store sales over the line and create a filing duty on your Shopify orders.
What is the economic nexus threshold?
It varies by state, but a common default is $100,000 in annual in-state sales, with the largest states like California and Texas set at $500,000, according to Beancount. Always confirm the current figure with the specific state's Department of Revenue.
Does a resale certificate help with sales tax nexus?
It is a separate but related tool. A resale certificate lets you buy from your POD supplier tax-free for resale, which stops you from paying sales tax twice. You still owe collection and remittance to the state when you sell to the end customer.
Is this tax advice?
No. This is general information to help you understand how nexus works. Thresholds and rules change often and vary by state, so confirm your specific situation with a licensed CPA or tax professional before acting.