The Supreme Court decision in South Dakota v Wayfair dramatically changed how sales tax applies to ecommerce businesses. Before this ruling, businesses generally collected sales tax only in states where they had physical presence.<\/p>\n\n\n\n
After the Wayfair decision, states gained the authority to require tax collection based on economic activity. This change had a significant impact on Amazon sellers using the Fulfillment by Amazon program.<\/p>\n\n\n\n
Amazon FBA sellers now face both physical nexus and economic nexus obligations across multiple states. <\/p>\n\n\n\n
If you are unfamiliar with nexus rules, begin with the overview See: Economic Nexus Explained<\/a><\/strong>.<\/p>\n\n\n\n Before the Wayfair decision, the Supreme Court ruling in Quill v North Dakota required businesses to have physical presence in a state before being required to collect sales tax.<\/p>\n\n\n\n For many ecommerce sellers, this meant that sales tax collection obligations applied only in states where they had<\/p>\n\n\n\n Many online sellers operated nationwide without collecting sales tax in most states.<\/p>\n\n\n\n This changed after the Wayfair ruling removed the physical presence requirement. More details about the ruling are explained in See: Sales Tax Nexus After Wayfair<\/a><\/strong>.<\/p>\n\n\n\n After the Wayfair decision, states began implementing economic nexus laws. These laws require businesses to collect sales tax once sales into a state exceed certain thresholds.<\/p>\n\n\n\n Typical thresholds include<\/strong><\/p>\n\n\n\n Because Amazon sellers often ship products nationwide, many sellers now exceed these thresholds in multiple states. You can review nexus thresholds across states in See: Economic Nexus by State<\/a><\/strong>.<\/p>\n\n\n\n Businesses can estimate nexus exposure using the economic nexus calculator<\/a><\/strong>.<\/p>\n\n\n\n In addition to economic nexus, Amazon sellers may also create physical nexus through inventory stored in fulfillment centers.<\/p>\n\n\n\n Amazon distributes seller inventory across warehouses located throughout the United States. Inventory stored in these facilities may create nexus even if sales thresholds are not exceeded.<\/p>\n\n\n\n This combination of economic nexus and inventory nexus makes compliance more complex for FBA sellers. <\/p>\n\n\n\n More details about inventory related nexus are explained in See: Amazon Inventory Storage and Nexus<\/a><\/strong>.<\/p>\n\n\n\n Another major development following the Wayfair decision was the introduction of marketplace facilitator laws. These laws require marketplaces such as Amazon to collect and remit sales tax on behalf of sellers.<\/p>\n\n\n\n While this simplified tax collection for many transactions, sellers still need to monitor nexus obligations because<\/p>\n\n\n\n A detailed explanation of these laws is available in See: States With Marketplace Facilitator Laws<\/a><\/strong>.<\/p>\n\n\n\n The combination of inventory nexus, economic nexus, and marketplace facilitator laws created a complex compliance environment for Amazon sellers.<\/p>\n\n\n\n Sellers must now evaluate<\/strong><\/p>\n\n\n\n Failure to monitor these factors may lead to sales tax exposure across multiple states. Businesses can estimate potential liabilities using the sales tax exposure calculator<\/a><\/strong>.<\/p>\n\n\n\n Amazon sellers can reduce compliance risks by monitoring both inventory storage and sales activity across states.<\/p>\n\n\n\n Important steps include<\/strong><\/p>\n\n\n\n Proactive monitoring helps sellers maintain compliance as ecommerce operations grow.<\/p>\n\n\n\n If you are evaluating sales tax obligations for your business, you can start with the Economic Nexus Guide<\/strong><\/a> and review state rules in the Economic Nexus by State<\/strong><\/a> reference.<\/p>\n\n\n\n Businesses assessing potential liability often begin with a Sales Tax Exposure Analysis<\/strong><\/a> or estimate risk using the Sales Tax Exposure Calculator<\/strong><\/a>.<\/p>\n\n\n\n If you sell across multiple states, the Economic Nexus Tracker<\/strong><\/a> can help monitor when thresholds may be triggered.<\/p>\n\n\n\n For a structured overview of potential liabilities, businesses may review the Sales Tax Risk Report<\/strong><\/a>.<\/p>\n\n\n\n Marketplace sellers can learn how platform rules apply in the Marketplace Nexus Guide<\/strong><\/a>.<\/p>\n\n\n\n Sellers operating on major platforms can also evaluate marketplace activity using the Marketplace Nexus Tracker<\/strong><\/a>.<\/p>\n\n\n\n Industry-specific guidance is available for Amazon Seller Economic Nexus<\/strong><\/a> and Walmart Marketplace Economic Nexus<\/strong><\/a>.<\/p>\n\n\n\nSales Tax Rules Before Wayfair<\/h2>\n\n\n\n
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How Wayfair Changed Amazon Seller Obligations<\/h2>\n\n\n\n
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Inventory Nexus and Amazon Warehouses<\/h2>\n\n\n\n
Marketplace Facilitator Laws After Wayfair<\/h2>\n\n\n\n
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Why FBA Nexus Became More Complex<\/h2>\n\n\n\n
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Managing Compliance After Wayfair<\/h2>\n\n\n\n
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Related Sales Tax Resources<\/h2>\n\n\n\n