Amazon FBA sellers may have sales tax nexus in every state where Amazon stores their inventory — even if they've never sold a single item to a customer in that state.
When you enroll in Amazon FBA (Fulfillment by Amazon), you send your inventory to Amazon's warehouses. Amazon then distributes that inventory across its fulfillment network — often across dozens of states — to optimize delivery speed for customers.
This is the FBA nexus problem: you don't control where your inventory goes. Amazon does. And most states treat inventory storage as physical nexus — meaning your business may have a sales tax collection obligation in every state where Amazon is holding your products.
This isn't a loophole or gray area. It's a well-established state tax position that has been enforced against FBA sellers for years. The question isn't whether the rule applies — it's whether your specific facts create an obligation, and what to do about it.
Important: Marketplace Facilitator laws require Amazon to collect and remit sales tax on your sales in most states. But nexus is a separate legal question. Having Amazon collect doesn't eliminate your potential registration and reporting obligations.
Most states treat stored inventory as a physical presence trigger. Amazon FBA sellers commonly have inventory in 15–25+ states at any given time, each potentially creating nexus.
Amazon determines where your inventory is stored based on logistics and demand patterns. Even if you choose "inventory placement" settings, Amazon may still redistribute your products.
Amazon collects and remits sales tax as a marketplace facilitator in most states. This does not eliminate nexus. Some states still require FBA sellers to register independently.
If you've been selling on FBA for years without registering in states where Amazon holds inventory, you may have retroactive sales tax obligations. Some states have voluntary disclosure programs that limit penalties.
Pull your inventory placement report from Amazon Seller Central. List every state where Amazon has stored your inventory over the past 2–3 years.
Use our free Nexus Readiness Indicator to evaluate your risk level in each state where you have inventory presence and revenue.
For states showing potential exposure, submit a review request. Our compliance team provides a written nexus assessment of your specific facts.
If you have historical unregistered exposure, ask about voluntary disclosure programs. Many states offer limited lookback periods and penalty waivers for businesses that come forward proactively.
FBA Sellers
Run a free nexus assessment for any state where Amazon stores your inventory. Get an instant risk profile and request a professional review for states showing exposure.
Educational Disclaimer: This guide is provided by Hive Tax Book for educational purposes only and does not constitute legal advice or a formal state tax nexus opinion. Amazon FBA nexus is a fact-specific analysis. Consult a qualified CPA or tax attorney for guidance specific to your situation.