US Sales Tax for Amazon Sellers: Economic Nexus, Wayfair, and What Taiwan Brands Owe

In 2018, the US Supreme Court decided South Dakota v. Wayfair — a ruling that transformed e-commerce sales tax. Before Wayfair, a state could only require a business to collect sales tax if the business had a "physical nexus" (warehouse, office, employees) in that state. After Wayfair, states can require sales tax collection based solely on "economic nexus" — exceeding a threshold of sales volume or transaction count in a state, regardless of physical presence.

For Taiwan-based Amazon sellers, this created a potentially significant compliance challenge: selling into all 50 US states via Amazon could theoretically trigger sales tax collection obligations in dozens of states simultaneously.

However, the practical burden on third-party Amazon sellers was dramatically reduced by marketplace facilitator laws, which followed quickly after Wayfair. Understanding the interaction between economic nexus and marketplace facilitator laws is essential.

Most US states have adopted economic nexus thresholds of $100,000 in annual sales OR 200 separate transactions in the state per year. These thresholds were specifically designed to exempt small sellers from multi-state compliance burdens.

As of 2022, all 45 US states that have a sales tax (plus Washington DC) have enacted marketplace facilitator laws. These laws require Amazon — as the marketplace facilitator — to collect and remit sales tax on behalf of all third-party sellers for orders fulfilled through Amazon's platform.

What this means in practice: for your Amazon FBA sales in the US, Amazon automatically calculates, collects, and remits state and local sales tax to each jurisdiction. This happens without any action required from you. You do not need to register for sales tax in any state for Amazon marketplace sales.

Amazon provides a Sales Tax Report in Seller Central (Reports > Tax Document Library) showing the sales tax collected by state on your behalf each month. This is useful for your own records but does not require you to file or remit anything — Amazon handles all of it.

The key implication: the complex multi-state sales tax compliance burden that Wayfair theoretically created for online sellers is almost entirely eliminated for Amazon-only sellers by marketplace facilitator laws. This is one of the significant structural advantages of selling through Amazon vs. your own Shopify store.

Despite marketplace facilitator laws, Taiwan sellers may still have US sales tax obligations in three scenarios:

Scenario 1 — Direct sales through your own website (Shopify, WooCommerce, etc.): marketplace facilitator laws only cover sales made through Amazon. Your own website sales are your responsibility. If your US direct sales exceed $100,000 in a state, you likely need to register for sales tax in that state and collect/remit it yourself.

Scenario 2 — Selling through Amazon Vendor Central: Vendor Central (where Amazon buys your products wholesale) is treated differently — Amazon is the seller, not you. Vendor Central sellers generally have no sales tax obligations for those sales.

Scenario 3 — Physical nexus from FBA warehouses: when Amazon stores your FBA inventory in its fulfillment centers, you technically have inventory in those states, which some states consider a physical nexus. However, in practice, the marketplace facilitator laws mean Amazon is collecting the tax regardless, so the additional physical nexus does not create additional compliance burden for most FBA sellers.

B2B sales to US businesses: if you sell directly to US businesses (distributors, retailers) in addition to Amazon, those B2B sales may be subject to sales tax depending on whether your buyer is a reseller (with a valid resale certificate) or an end user. Businesses buying for resale provide you a resale certificate, exempting the transaction from sales tax.

If you operate a direct-to-consumer website for the US market (Shopify or similar), you need to manage sales tax compliance yourself — or use a service.

Shopify's built-in tax engine: Shopify automatically calculates and collects sales tax at checkout based on the buyer's location. However, you are still responsible for registering in states where you have nexus and remitting the collected tax.

Recommended approach for small to mid-volume direct sales: use a sales tax automation service — TaxJar, Avalara, or Vertex. These services integrate with Shopify, automatically determine nexus in each state based on your sales volume, file returns on your behalf, and remit payments. Costs range from $19/month (TaxJar Starter) to $200+/month for high-volume sellers.

Registration timeline: you must register for a sales tax permit in a state before you begin collecting tax there. Operating without registration in a state where you have nexus results in liability for uncollected taxes plus penalties and interest. Most states charge $0 to register — it is a free process on the state's Department of Revenue website.

Annual filing or monthly: small sellers (under $1,200/year in sales tax) typically file annually. Larger sellers may be required to file monthly or quarterly. Your automated service handles this scheduling.

Taiwan sellers sometimes conflate import duties (customs duties paid when goods enter the US) with sales tax (collected at the point of consumer sale). These are entirely separate systems with different rates, thresholds, and collection mechanisms.

Import duties are paid once, at the time your goods enter the US, based on the goods' HTS classification and country of origin. You (as the importer of record) pay these to US Customs through your customs broker. Rates for Taiwan goods under Section 301 tariffs vary significantly by product category.

Sales tax is collected on each consumer transaction within the US. It is a state/local tax — there is no federal sales tax in the United States. Amazon collects and remits sales tax on your Amazon sales automatically.

Use tax: some states impose "use tax" on goods purchased from out-of-state sellers without sales tax being collected. This applies primarily to business buyers, not individual consumers. If you sell B2B to US businesses that claim they do not owe use tax on your products, have them provide a valid resale certificate or exemption certificate.

Bottom line for most Taiwan brands selling only on Amazon: your US sales tax obligations are fully handled by Amazon. Focus your compliance energy on import duties (which you pay) and FBA reimbursements (which Amazon owes you).