Amazon FBA Sellers and U.S. Sales Tax: What You Need to Know in 2025 

If you’re an Amazon FBA (Fulfilled by Amazon) seller, understanding your responsibilities around U.S. sales tax is more important than ever. Many sellers assume that because Amazon collects and remits sales tax, they’re fully covered. But in reality, your compliance obligations may go beyond collection — and failing to meet them could put your business at risk. 

This guide breaks down everything you need to know about sales tax registration, calculation, collection, remittance, filing, and reporting — specifically tailored for Amazon FBA sellers in 2025. 

1. Amazon FBA and Marketplace Facilitator Laws 

Since the rollout of Marketplace Facilitator laws in most U.S. states, Amazon — as a marketplace — is responsible for collecting and remitting sales tax on behalf of third-party sellers. This applies to sellers on Amazon’s Professional Selling Plan, which includes most FBA sellers. 

So, what does that mean for you? 

• For sales made through Amazon.com, Amazon automatically collects and remits sales tax to the appropriate state tax authorities. 

• This greatly simplifies the collection and remittance process for sellers — but it doesn’t mean you’re off the hook entirely. 

2. Does Amazon Handle Sales Tax Registration on Your Behalf? 

No. Amazon does not handle your sales tax registration. While it collects and remits tax under marketplace facilitator laws, you (the seller) are still responsible for registering for sales tax permits in certain states. 

Registration is typically required if: 

• You have economic nexus (e.g., sales exceeding a state’s threshold, typically $100,000 or 200 transactions, but this varies by state). 

• You have physical nexus, such as inventory stored in Amazon warehouses (FBA). Please take note, Amazon’s Fulfilment Centres are strategically located across various states, and inventory can be moved without the seller’s explicit knowledge. Therefore, sellers should regularly review their Inventory Event Detail reports in Seller Central to monitor where their products are stored. (TaxDo can automatically manage your nexus tracking) 

• The state requires registration and filing regardless of marketplace collection 

3. Sales Tax Filing: Do You Still Need to File Returns? 

Yes — in many states, even if Amazon is collecting and remitting tax, you may still be required to file sales tax returns. 

These are often called “zero-dollar returns,” and they are required in states that want sellers to: 

• Report total gross sales 

• Report sales made via Amazon (marketplace facilitator) 

• Report tax already collected by Amazon 

4. States That Require Filing Even If Amazon Remits Tax

 Here are examples of states that require registration and ongoing filing from sellers — even if Amazon collects and remits sales tax: 

Note: In most other states, if you are not registered and Amazon collects/remits all tax, you are typically not required to file. However, if you are already registered, you must continue filing or formally close your account to avoid penalties. 

5. What Does Sales Tax Filing Mean in These States? 

Even when Amazon collects the tax, you must file returns to report your sales activity. This may include: 

• Reporting total gross sales 

• Declaring marketplace (Amazon) sales separately 

• Showing tax collected by the facilitator (Amazon) 

Failure to file, even if $0 is due, can lead to penalties and audit risk. 

6. FBA Warehousing Triggers Physical Nexus 

With Amazon storing your inventory in multiple states, you often create physical nexus in those jurisdictions. 

That means: 

• You may need to register for sales tax even if Amazon is collecting tax 

• You may need to file returns in those states 

• Some states may require income tax filings as well if you have nexus 

7. 1099-K Reporting Threshold:

It’s worth noting that starting with the 2025 tax year (for forms issued in early 2026), the IRS has adjusted the threshold for issuing Form 1099-K to $2,500 in gross sales, with no minimum transaction requirement. This change means more sellers will receive this form and need to report their earnings accordingly. 

8. What About Non-Amazon Sales? 

If you also sell on other channels (e.g., Shopify, eBay, Etsy, wholesale), Amazon does not collect or remit tax for those sales. You must: 

• Register and collect tax where you have nexus 

• Remit tax directly to the states 

• File your own sales tax returns 

9. Penalties for Non-Compliance 

Assuming Amazon has you fully covered can be a costly mistake. Common consequences of non-compliance include: 

• Penalties for non-filing or late filing 

• Interest on unpaid taxes 

• Triggering audits 

• Compliance notices and license revocation 

10. Best Practices to Stay Compliant 

• Know your nexus exposure (economic and physical) 

• Register where required 

• File zero-dollar returns if applicable 

• Use a sales tax automation system to manage compliance 

• Track tax collected by Amazon and your own channels separately 

How TaxDo Helps Amazon FBA Sellers 

At TaxDo, we specialize in supporting Amazon FBA sellers through: 

• State-by-state sales tax registration 

• Sales tax filing, including zero-dollar returns 

• Nexus tracking dashboard 

• Real-time tax calculation API for other sales channels 

• End-to-end support for global VAT/GST compliance 

Whether you sell only on Amazon or across multiple platforms, TaxDo has you covered. 

Ready to Simplify Your Sales Tax Compliance? Let us take care of the complexity so you stay compliant, audit-ready, and focused on growth.