Drop Shipping & FBA TaxAnswered

I sell on both Amazon FBA and my own Shopify store — what's the hidden tax trap?

I4
ingmar_4b96new member
May 24, 2026 1,880 views 1 answer
amazon-fbashopifymarketplace-facilitatorsales-tax-nexus

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 friend warned me the Shopify side is a 'trap.' What exactly is the risk when I run FBA and a direct Shopify store at the same time?

Related Questions

DropshippingAnswered

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...

T6
thiago_6b29·May 14, 2026
1,8401
DropshippingAnswered

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...

B6
bastien_6f18·May 30, 2026
1,5601
DropshippingAnswered

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...

P8
petra_8a47·May 26, 2026
1,4101
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
DropshippingAnswered

If Amazon already remits the sales tax, do I still have to register in those states?

Since Amazon collects and remits sales tax on all my marketplace orders, do I, as a foreign-owned LLC selling only on Amazon FBA, still have to register for a sales tax permit in the states where my i...

M9
marisol_9d51·May 16, 2026
1,6201
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
DropshippingAnsweredFeatured

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 Am...

R8
renaud_8c14·May 10, 2026
2,2101
DropshippingAnsweredFeatured

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...

AP
ahsan_pk_fda4·Nov 9, 2024
2,5101
DropshippingAnswered

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...

D2
dieter_2a83·May 18, 2026
1,7501
DropshippingAnswered

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...

L3
lucia_3d29·May 28, 2026
1,6901

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