US Sales Tax for Foreign Sellers: Amazon Collects, Shopify Does Not

TL;DR

Physical presence is not required for US sales tax nexus — sales volume into a state is enough, commonly $100,000 a year. Amazon collects and remits for you under marketplace facilitator laws. Shopify does not on your own storefront: you are the merchant of record, and Shopify Tax calculates and collects without registering or filing anything.

Being a non-resident does not exempt you

This is the first thing to settle, because it is the assumption most foreign sellers start from.

Sales tax is a state tax on a transaction with your customer. It is not an income tax, and it does not care where you live, where your LLC was formed, or whether you have a US visa. After South Dakota v. Wayfair (2018), a state may require collection based on economic activity alone — no office, no staff, no warehouse required.

So a seller in Greece with a Wyoming LLC and no US presence can have a sales tax obligation in Illinois. That is not an edge case; it is the design of the rule.

The distinction that decides everything: who is the merchant of record

Marketplace facilitator laws shifted collection and remittance onto the platform. Amazon is squarely inside them. Your own Shopify store is not a marketplace — Shopify is a software platform, and you are the seller.

The Shopify trap

Shopify Tax computes rates by buyer location and collects at checkout. It does not:

• register you with any state’s Department of Revenue
• determine whether you have nexus
• file returns on your behalf
• remit to any state where you are not registered

Which produces this failure:

Turn on collection for a state, never register there, and every dollar of tax your customers paid lands in your payout as ordinary revenue.

You are now holding money collected as tax, from customers, in a state where you have no registration and file no return. That is a materially worse position than not collecting at all — it converts a registration question into money you hold that is not yours.

If you enable collection for a state, register in that state first. The order matters.

The FBA complication nobody mentions

Amazon collecting the tax does not end the analysis, because FBA inventory creates physical nexus.

Amazon moves your inventory between fulfillment centers without asking you. Inventory stored in a state is a physical presence in that state — and physical nexus applies regardless of the economic threshold. A seller with $40,000 of sales into a state and inventory in an Amazon warehouse there has nexus, even though $40,000 is far below $100,000.

Across a typical FBA footprint that can mean physical nexus in 15 to 30 states.

What that does and does not mean:

• Amazon still collects and remits on marketplace sales. That part is handled.
• But physical nexus is a state-level presence that can carry separate registration and filing obligations, and can matter for sales you make outside Amazon into the same state.
• It can also interact with other state-level questions, which is why FBA sellers with a Shopify store as well have the most complicated position of anyone in this article.

Where the thresholds sit

Treat these as orientation, not as a compliance table. Thresholds, measurement periods (calendar year vs trailing twelve months), and whether the count is gross or taxable sales all vary by state and change by legislation. Check the current rule for a state before acting on it.

What US sales tax is NOT

• Not federal. There is no US federal sales tax or VAT. Every rule here is state-level.
• Not income tax. Sales tax is collected from your customer and passed through. Whether you owe US federal income tax is a separate question about effectively connected income.
• Not Form 5472. That is a federal information return about related-party transactions. See “no activity” almost never means “no Form 5472”.
• Not affected by which state you formed in. A Wyoming LLC has no sales tax advantage. Nexus follows your customers and your inventory, not your certificate of formation.
• Not solved by a resale certificate. A resale certificate lets you buy inventory without paying tax; it does not address your obligation to collect from end customers.

What to actually do

1. Establish which channel you sell through, per channel. Amazon marketplace sales are handled by Amazon. Your own storefront is not.
2. Do not enable Shopify collection for a state before registering there. This is the single most expensive sequencing error.
3. Track sales by state from the first month. Nexus is a running measurement, and you cannot reconstruct it retrospectively without clean data. This is one of the practical reasons e-commerce bookkeeping is set up per channel and per state from the start.
4. If you use FBA, get your inventory placement report. It tells you which states hold your inventory, which is where physical nexus sits.
5. Register before you cross, not after. Registration is prospective; liability for past uncollected tax is not erased by registering later.
6. Reassess quarterly while growing. A threshold crossed in month seven creates obligations in month eight.

An honest limitation

Multi-state sales tax registration and filing is a specialist discipline with its own software, its own registrations and its own recurring filings — it is not an add-on to a federal tax engagement, and any firm that tells you it is has not priced it properly.

What a federal-focused practice can do is tell you which questions are actually yours — separating the sales tax question from the Form 5472 question from the effectively-connected-income question, so you are not paying to solve a problem you do not have. Where genuine multi-state registration is needed, that belongs with a sales tax specialist.

Frequently Asked Questions

Q: I only sell on Amazon. Do I need to do anything about sales tax? A: For marketplace sales Amazon collects and remits. FBA inventory still creates physical nexus in the states where it is stored, which can carry separate obligations — particularly if you also sell through any non-Amazon channel.

Q: My Shopify store has $30,000 of US sales. Do I need to register anywhere? A: Probably not on economic nexus, since most thresholds sit at $100,000. Check whether any single state is close, and confirm you have not enabled collection anywhere you are not registered.

Q: Does my Wyoming LLC’s registered agent address create nexus? A: A registered agent address is not inventory, staff or an office and does not by itself create physical nexus. See your US LLC has four different addresses.

Q: I collected tax without registering. What now? A: Stop collecting in that state, quantify what you hold, and get the registration and remittance question in front of someone who handles state filings. Holding collected tax is a different and more urgent problem than an unregistered nexus.

Next Steps

Most foreign sellers who ask about sales tax turn out to have a federal question first — whether they owe US income tax at all, and whether their Form 5472 filings are current. Those are answerable quickly and cheaply. Sales tax registration only becomes the priority once your channel mix and state-by-state volumes are actually measured, which is the case for far fewer sellers than the internet suggests.

This article is general information, not tax advice. State sales tax rules vary and change frequently — confirm the current rule for any state before acting.