Amazon Collects Sales Tax, So I'm Covered? Not Always

Amazon generally collects sales tax on the sales it facilitates, in all 46 sales-tax jurisdictions. But 20 of them count those marketplace sales toward your own threshold. If your total crosses it, you may need to register and collect on your direct sales. Inventory stored in a state can also create nexus on its own.

Last reviewed September 23, 2026

"Amazon collects the sales tax, so I don't have to think about it." It's one of the most common things we hear from e-commerce sellers. It's half right. Here's which half, and when it stops being true.

What part of the myth is true?

Every one of the 46 jurisdictions with a statewide sales tax (45 states plus DC) has a marketplace facilitator law. Under these laws, a marketplace such as Amazon, Etsy, eBay or Walmart generally collects and remits sales tax on the sales it facilitates for you.

So if every sale you make goes through a marketplace that collects, you usually aren't collecting tax on those sales yourself. That part is real.

Where does the myth break down?

There are three common gaps.

1. Marketplace sales can count toward your threshold. Who collects and whether you have nexus are separate questions. In 20 jurisdictions, your marketplace sales count when a state tests whether you have crossed its economic threshold. Cross it, and you may need to register and collect on your direct sales, such as your Shopify store, wholesale orders or in-person sales.

2. You sell somewhere else too. Almost every growing brand adds a second channel. The marketplace only collects on its own orders. Tax on your website orders is your job once you have nexus.

3. Inventory creates nexus by itself. If Amazon stores your products in a state (for FBA) or you use a 3PL warehouse, that inventory is generally physical presence. It can create nexus whatever your sales volume. See Does FBA inventory create sales tax nexus?

Which states count marketplace sales toward my threshold?

From the official sources in our 2026 dataset:

A few of these entries are still being re-verified. Arkansas, Colorado, Florida, Mississippi and Oklahoma are marked "excluded" partly on the strength of a secondary source, and each is flagged on its state page. Where guidance is unclear, our Sales Tax Nexus Checker counts your marketplace sales to be safe and tells you if the answer depends on them.

What does this look like in practice?

The states themselves publish examples:

• Maryland: $25,000 of direct sales plus $76,000 of marketplace sales exceeds the $100,000 threshold. The seller must register and collect on its direct sales.
• South Carolina: $75,000 direct plus $50,000 through a marketplace exceeds $100,000. The seller remits tax only on its direct sales; the marketplace collects on the rest.
• DC: 100 sales on your own website plus 150 marketplace sales exceeds DC's 200-transaction test.
• Texas: since April 1, 2020, all sales count in the $500,000 safe-harbor test, including marketplace sales, even when the marketplace collects.

Here's an Example we ran through the checker. It's hypothetical, not a client. A seller has $25,000 of Shopify sales and $76,000 of Amazon sales into Maryland, plus $30,000 of Shopify sales and $150,000 of Amazon sales into Florida (all taxable goods).

• Maryland: Nexus likely. Counted sales are $101,000, because Maryland counts marketplace sales.
• Florida: Below threshold. Counted sales are $30,000 (30%), because Florida excludes marketplace sales and counts only taxable sales.

The same seller, with the same mix, gets opposite answers in two states.

If I sell only on marketplaces, do I ever need to register?

Sometimes not, but it depends on the state.

• No registration needed, per our data: California, Iowa, Maryland, Michigan, Missouri and Texas say a seller whose sales all go through collecting marketplaces doesn't need to register. Texas adds that you should keep records for 4 years.
• Register anyway: Connecticut says marketplace-only sellers still register, but can mark that their sales are marketplace-only.
• Excluded from the count: in states like Alabama and Pennsylvania, collecting-marketplace sales don't count toward your threshold at all. Alabama excludes sales through an SSUT-participating marketplace. Pennsylvania excludes facilitated sales only where the facilitator collects Pennsylvania tax.
• Hawaii is different: under Hawaii's rules, a marketplace seller engaged in business in Hawaii still owes general excise tax at the 0.5% wholesale rate on goods and services sold through a marketplace.

And remember inventory. Even a marketplace-only seller can have physical nexus where its stock is stored.

What should I do if my marketplace sales pushed me over?

1. List your sales by state and channel for the period each state uses. Export orders with the ship-to state from each channel you sell on.
2. Run them through the nexus checker with direct and marketplace sales in separate columns.
3. For each "Nexus likely" state, open the state page for the registration link and start-date rule.
4. Register and collect on direct sales from the start date. When you file, many states have you report marketplace sales and then deduct them, because the marketplace already paid.
5. If you crossed a while ago, get advice before registering. You may be able to limit past exposure through a voluntary disclosure. The pillar guide explains how that generally works.

If you'd like a second pair of eyes, RAHA's Nexus Study reviews your sales and inventory state by state, registers you where you have nexus and plans for any past periods. It's a fixed price, quoted upfront. See our e-commerce accounting services or ask about a Nexus Study.

Frequently asked questions

Does Etsy or Walmart work the same way as Amazon?

Generally, yes. Marketplace facilitator laws apply to marketplaces in general, not just Amazon. Whether those sales count toward your own threshold is set by each state, not by the marketplace.

If marketplace sales count toward my threshold, do I pay tax on them twice?

Generally no. The marketplace collects on its sales. You collect only on your direct sales. Registered sellers in many states report the marketplace sales and then deduct them on the return, so they aren't taxed twice.

Do I need to register in Texas if I only sell on Amazon?

According to the Texas Comptroller, a remote seller that sells only through marketplace providers that certify they collect for it doesn't need a Texas permit, but must keep records for 4 years. Inventory in Texas changes this: it generally creates physical nexus.

My state isn't on the "counted" list. Am I safe?

Not necessarily. Ten states' official guidance doesn't say either way. Inventory in any state can also create nexus on its own. Check each state's page and treat unclear states conservatively.

What if I didn't know and crossed a threshold years ago?

It's a common situation. Tax you should have collected may be owed from your own pocket. Many states offer voluntary disclosure agreements that may limit how far back you pay and may waive penalties. Get advice before contacting the state.

Sources

• Maryland COMAR 03.06.01.33 (and Comptroller Tax Alert 09-19 as recorded in our data): https://regs.maryland.gov/us/md/exec/comar/03.06.01.33
• South Carolina DOR, remote sellers: https://dor.sc.gov/sales-use-tax-index/sales-tax/remote-sellers
• DC OTR, sales and use tax FAQs: https://otr.cfo.dc.gov/page/sales-and-use-tax-faqs
• Texas Comptroller, remote sellers: https://comptroller.texas.gov/taxes/sales/remote-sellers.php
• CDTFA, Wayfair guidance: https://www.cdtfa.ca.gov/industry/wayfair.htm
• Iowa DOR, remote sellers: https://revenue.iowa.gov/remote-sellers
• Michigan Treasury, remote seller FAQ: https://www.michigan.gov/taxes/business-taxes/sales-use-tax/information/remote-seller-faq
• Missouri DOR, remote seller and marketplace facilitator FAQ: https://dor.mo.gov/faq/taxation/business/remote-seller-and-marketplace-facilitator.html
• Connecticut DRS: https://portal.ct.gov/drs/businesses/new-business-resource-center/registering-with-drs
• Alabama DOR: https://www.revenue.alabama.gov/faqs/are-all-remote-sellers-required-to-register-in-alabama/
• Pennsylvania DOR, online retailers: https://www.pa.gov/agencies/revenue/resources/tax-types-and-information/sales-use-and-hotel-occupancy-tax/online-retailers
• Hawaii Revised Statutes ch. 237: https://files.hawaii.gov/tax/legal/hrs/hrs_237.pdf
• Florida DOR, TIP 21A01-03: https://floridarevenue.com/taxes/tips/Documents/TIP_21A01-03.pdf

This guide provides general information for educational purposes and is not tax, legal or accounting advice. Consult a qualified professional before acting.