Amazon FBA and the US LLC are a dream team, says the internet. True, actually, but for different reasons than most videos claim, and with two topics where you need to think clearly: sales tax and the warehouse question. Here is the setup the way we have built it for hundreds of sellers, without the fairy tales.
Why the LLC makes sense for FBA sellers
The real reason is mundane and powerful at the same time: Amazon.com wants to see a clean US market participant. With an LLC, an EIN and a US account, your Seller Central setup runs smoothly: a US payout account without a detour through currency services, W-9 logic instead of withholding debates in the US store, a professional face toward suppliers, and an import setup in which your LLC can act as Importer of Record; the basics are explained by US Customs and Border Protection, CBP. Add the familiar tax logic: a transparent LLC pays no US corporate tax itself, taxation happens where you live.
Sales tax: more relaxed than its reputation
A few years ago, sales tax was every FBA seller's nightmare: registrations in dozens of states, because Amazon's warehouse network created nexus everywhere. That world no longer exists in that form. Nearly every state has marketplace facilitator laws: Amazon itself calculates, collects and remits the sales tax on marketplace sales on your behalf. The California tax authority, CDTFA, shows what such a law looks like. What is left for you are edge cases: your own shop alongside Amazon (then your own nexus counts), residual registration duties in some states, and the bookkeeping hygiene of reading Amazon's statements correctly. The basic fear is unfounded, care is still required; we wrote up the details in the sales tax article.
The warehouse question: where honesty parts ways with sales copy
Now the topic many providers elegantly skip. Your goods sit physically in US warehouses. Does that make you liable to US income tax? The American question behind it is called Engaged in a Trade or Business / Effectively Connected Income, and the IRS explains the basics here. The honest answer: using Amazon's logistics alone is, in common practice, not treated as your own US business activity, because Amazon acts as an independent service provider and you have neither staff nor a fixed place of business in the US. But it is a classification with grey areas, not a guarantee written into the statute, and it tips over as soon as you build your own structures in the US: your own warehouse, your own people, your own offices. Anyone who promises you the issue does not exist is selling you prose. Anyone who knows it and builds their setup accordingly sleeps soundly.
On the residence side, the usual rule applies: the model works if you have moved abroad or live in a low-tax country; the permanent establishment logic of your country of residence remains the second test.
Which state for FBA?
Because Amazon handles the sales tax on marketplace sales, your state of formation is not a sales tax decision but a question of discretion and presence: Wyoming as the standard, Florida for a visible US presence with lifestyle appeal. The state atlas gives you the overview.
Your next step
If your FBA business is ready to get going: order the complete package, with EIN, account support and the annual US tax filing, which also records your draws properly. If your case raises substance questions, such as your own warehouse, US employees or private-label imports at scale, book a consultation with Sebastian, held in English: one hour, honest feedback, 15-minute guarantee.
About the author
ZeroTax LLC is a service of Mount Bonnell Advisors in Austin, Texas.
Founder of Mount Bonnell Advisors, Austin, Texas. Has looked after e-commerce clients since the days when sales tax really was a nightmare.
Book a consultation with Sebastian (held in English only)