Drop Shipping & FBA TaxAnswered

A California warehouse will store my bestsellers. Is that enough to make my LLC's income effectively connected?

AP
ahsan_pk_fda4subscriber
November 9, 2024 2,510 views 1 answer
3plcaliforniainventoryecidropshippingdelaware-llc

I am based in Pakistan and use a Delaware LLC for an ecommerce brand that started as pure dropshipping. A 3PL in California now wants to store our top products for faster delivery. Annual revenue is around $210,000 and most customers are in the U.S.

I understand this may create sales tax nexus, but I am specifically worried about the federal side. Does moving inventory into California push the business into effectively connected income territory?

Related Questions

DropshippingAnswered

I used to ship direct from Asia but now I am considering FBA. Is that basically a tax line in the sand?

I am based in Taiwan and run an ecommerce brand through a Delaware LLC. So far we have shipped everything directly from Asia, but Amazon FBA could improve conversion and delivery times. Annual revenue...

KT
kevin_tw_95ae·Nov 13, 2024
2,2301
DropshippingAnswered

If I never store inventory in the U.S., is my dropshipping LLC usually safer from ECI?

I am in Nigeria and run a small dropshipping business through a New Mexico LLC. Products ship from China to U.S. customers and I do not keep inventory in the U.S. Revenue is only about $60,000 for now...

TN
temi_ng_4419·Nov 11, 2024
2,0701
DropshippingAnswered

My broker files the customs paperwork. If something is wrong, is my LLC still responsible?

I am based in the UAE and sell products into the U.S. through a Delaware LLC. We recently started importing small batches for faster fulfillment, and a customs broker handles the entries. Revenue is a...

H2
hamad_20b6·Nov 19, 2024
1,7101
DropshippingAnswered

My supplier sends samples and paid inventory shipments differently. Should duties be tracked separately?

I am based in India and use a U.S. LLC for an ecommerce brand. We import product samples one way and later larger commercial shipments another way. My broker handles the customs side, but our accounti...

PI
priya_in_d4cc·Nov 17, 2024
1,8701
DropshippingAnsweredFeatured

My supplier ships from China to U.S. customers. How do I know whether my LLC is the importer of record?

I am in Vietnam and run a dropshipping store through a Wyoming LLC. Orders are about $9,000 to $12,000 a month and the supplier in Shenzhen handles almost all shipping logistics. Sometimes they say du...

TV
trang_vn_cb85·Nov 7, 2024
2,7901
DropshippingAnswered

Etsy collects sales tax for marketplace orders, but what about my Shopify site for the same products?

I am in the Philippines and sell the same handmade products through Etsy and Shopify using one Delaware LLC. Etsy clearly says it remits U.S. sales tax for qualifying marketplace orders, but Shopify i...

IP
isabel_ph_d3a8·Nov 15, 2024
1,9601
EcommerceAnsweredFeatured

My 3PL wants to store inventory in New Jersey. Does that create a U.S. income tax problem, not just sales tax?

I am based in Colombia and sell home goods through a Delaware LLC. Right now I ship from abroad, but a U.S. 3PL offered to store inventory in New Jersey so delivery times would improve. Sales are abou...

LC
laura_co_2e5a·Nov 5, 2024
2,2601
InternationalAnsweredFeatured

My clients are abroad but my LLC is in the U.S. Does that automatically make the income foreign-source?

I use a U.S. LLC from Thailand for design retainers and online workshops. Most of my clients are outside the U.S., so I assumed the income must be foreign-source. Then I learned that service income ma...

N8
narin_87a9·Jan 30, 2025
2,7901
InternationalAnsweredFeatured

My 1040-NR has ECI from U.S. consulting through an LLC. Can I actually claim QBI as a nonresident?

I am from Singapore and file Form 1040-NR because I am still a nonresident for U.S. tax purposes. My foreign-owned LLC had about $118,000 of income that my preparer says is effectively connected with ...

AB
aaron_b8a0·Mar 9, 2026
2,3211
Digital NomadAnsweredFeatured

If I file a nonresident return with ECI, can my nomad health insurance even belong in the deduction conversation?

I live in the UAE and carry international health insurance because I move around a lot. This year I may have a nonresident U.S. return with effectively connected income, and I am trying to understand ...

R0
rashid_0534·Jul 29, 2025
2,1951

Have a similar question?

ForeignLLCTax members get expert answers with IRS citations. One CPA consultation costs $200+. Full access is $9.99/month.

Become a Member — $9.99/mo

Disclaimer: All content on ForeignLLCTax.com is created by a tax professional and is provided for general educational and informational purposes only. It does not constitute tax, legal, or accounting advice, and should not be relied upon as such. Every tax situation is different — for advice specific to your circumstances, please consult a licensed CPA, Enrolled Agent, or tax attorney. By using this website, purchasing a subscription, or accessing any tools or services, you acknowledge that no client-professional relationship is established between you and ForeignLLCTax.com or its operators. This website is not affiliated with the IRS.

Watch the walkthroughs