Does storing my inventory in Amazon FBA warehouses create ECI for me as a nonresident?
I'm a nonresident foreign owner of a single-member US LLC (disregarded). I sell physical products on Amazon and use Fulfillment by Amazon, so my stock physically sits in US fulfillment centers, and Amazon picks, packs, ships, and handles returns. I always thought I just filed Form 5472 with the pro forma 1120 and was done. But people keep mentioning 'effectively connected income.' Does holding inventory in FBA warehouses actually create a US trade or business and ECI for me?
Related Questions
If I have a US trade or business through FBA, how much of my sales income is actually ECI?
Suppose I accept that my Amazon FBA activity gives me a US trade or business. Does that automatically mean all my sales profit is effectively connected income, or does it depend on where the sales are...
Can FBA inventory create state income or franchise tax, or does Public Law 86-272 protect me?
I keep reading that Public Law 86-272 protects out-of-state sellers of physical goods from state income tax as long as they only solicit orders. I sell tangible products through Amazon FBA, so my inve...
There's no court case directly on Amazon FBA, so how confident can I be about the US tax answer?
Everything I read says there's no published court case that decides whether Amazon FBA creates a US trade or business. So how am I, a foreign LLC owner, supposed to make a decision? Is the 'FBA invent...
When does FBA push me from just filing 5472 into having to file a 1040-NR or 1120-F?
Right now my foreign-owned US LLC files only Form 5472 with the pro forma 1120 each year. At what point does Amazon FBA actually push me into also filing a Form 1040-NR (I'm an individual owner) or a ...
Amazon spread my FBA inventory across several states without telling me — am I now exposed in all of them?
I started FBA expecting my stock to sit in one or two warehouses, but Amazon distributed it across many states for faster shipping, and I only found out from a report. Does that mean I now have tax ex...
A California warehouse will store my bestsellers. Is that enough to make my LLC's income effectively connected?
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 a...
How does FBA compare with dropshipping and merchant-fulfilled for US tax risk?
I'm choosing a fulfillment model for my foreign-owned US LLC and I want to understand the tax-risk trade-offs before I commit. How do Amazon FBA, dropshipping from abroad, and merchant-fulfilled selli...
Does FBA inventory create sales tax physical nexus even if Amazon collects the tax?
Amazon already collects and remits sales tax on my marketplace orders under marketplace facilitator laws. So does the fact that my FBA inventory physically sits in warehouses across several states sti...
I sell on both Amazon FBA and my own Shopify store — what's the hidden tax trap?
My foreign-owned US LLC sells the same products both through Amazon FBA and through my own Shopify website. Amazon collects sales tax on the marketplace orders, so I assumed I was mostly covered. A fr...
Is Illinois really different on FBA inventory used only for marketplace orders?
Someone told me Illinois treats FBA inventory differently from most states — that inventory used only to fill Amazon marketplace orders does not create physical nexus there, unlike California or Penns...
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/moDisclaimer: 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.
