US Sales Tax Nexus for Cross-Border Sellers: Economic Nexus Thresholds by State

Yes. Amazon FBA creates physical nexus in every state where Amazon stores your inventory. Amazon's warehouse network spans 40+ states — if your inventory is stored in a state, you have physical nexus there regardless of whether you have employees or an office. Amazon provides a 'Inventory Event Detail' report showing which states your inventory has been stored in. You should review this report quarterly and register for sales tax in any state where you have FBA inventory, unless the marketplace facilitator collects tax on all your sales in that state.

The most common threshold is $100,000 in gross sales OR 200 separate transactions in the current or prior calendar year. States using this standard include: Alabama, Arkansas, Colorado, Connecticut, DC, Georgia, Hawaii, Idaho, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, West Virginia, Wisconsin, Wyoming. Some states use higher dollar thresholds only: California ($500K), New York ($500K+100 transactions), Texas ($500K). A few states have no threshold — any sale creates nexus (Florida for some sellers, Missouri).

No. Marketplace facilitator laws (enacted in 45 states + DC) require Amazon, Walmart, eBay and other marketplaces to collect and remit sales tax on behalf of third-party sellers. However, this does not eliminate your nexus. If you have nexus in a state — whether through FBA inventory, employees, or exceeding economic thresholds — you must still register for a sales tax permit and file periodic returns (even if zero). The marketplace collects tax only on sales made through their platform. Your DTC sales, wholesale orders and sales on other platforms remain your responsibility. Some states (e.g., Kansas) have passed legislation treating facilitators as dealers for certain purposes, but registration obligations for the underlying seller generally remain.

Track nexus using three data points: (1) FBA inventory location — download Amazon's 'Inventory Event Detail' report quarterly to identify every state where your stock has been stored; (2) economic threshold monitoring — track sales by state using your ecommerce platform analytics or a tax engine (Avalara, TaxJar); (3) physical presence — note any states where you have employees, contractors, affiliates, or attend trade shows. Most cross-border sellers exceed economic nexus ($100K) in 10-20 states within their first year. Use a nexus matrix spreadsheet updated monthly. Automated tools like TaxJar's AutoFile or Avalara AvaTax can monitor thresholds in real time and auto-register when triggered.

States can assess back taxes for the entire period you had nexus but did not register. Penalties include: failure-to-register penalties ($50-$500 per month depending on state), failure-to-file penalties (typically 5-25% of unpaid tax), and interest on unpaid tax (varies by state, 6-18% annually). States can also: issue tax liens, revoke your business license, block your marketplace accounts (Amazon requires valid state permits), and in extreme cases pursue criminal charges for tax evasion. The Streamlined Sales Tax Governing Board (SSTGB) offers a Voluntary Disclosure Agreement (VDA) program in 24 member states, which can limit lookback periods to 3-4 years and waive penalties.