Does FBA Inventory Create Sales Tax Nexus?
Generally, yes. Inventory stored in a state, including in an Amazon FBA or third-party (3PL) warehouse, is usually treated as physical presence. That creates sales tax nexus whatever your sales volume. A few states carve out sellers who sell only through collecting marketplaces, so check each state where your stock sits.
Economic thresholds get most of the attention. But for Amazon FBA sellers, the bigger issue is often simpler: where is your inventory? Stock sitting in a warehouse is generally a physical presence, and physical presence creates nexus no matter how little you sell into that state.
Why does inventory in a warehouse create nexus?
Before economic nexus existed, states could require collection only from sellers with a physical presence. Property in the state has always counted as physical presence, and inventory is property. It doesn't matter that you don't own the warehouse. Your goods are there.
Many state records in our 2026 dataset say this explicitly. Three examples:
- Texas: a seller is "engaged in business" if it owns or uses tangible personal property in Texas, including inventory in a warehouse or distribution center (Comptroller Pub. 94-108). With inventory there, the $500,000 safe harbor no longer applies.
- Pennsylvania: DOR lists keeping inventory in Pennsylvania as a collection trigger, regardless of the $100,000 threshold.
- New York: a business with property or inventory stored in New York must register regardless of the $500,000 / 100-sale thresholds.
Why is FBA a special risk?
With FBA, you usually don't choose where your stock goes. Amazon places and moves inventory across its network of fulfillment centers. A seller who has never "set up" in a state may still have had goods stored there for part of the year.
Your Seller Central inventory and fulfillment reports are the place to start. Keep a list of every state where your stock was held, and when. A 3PL can usually tell you exactly which of its warehouses holds your goods.
Are there exceptions for marketplace-only sellers?
Yes, in a few states. These are the state-specific points recorded in our data:
| State | What our data records about inventory |
|---|---|
| Nevada | Exception: a remote seller that sells only through a marketplace facilitator that collects Nevada tax, and whose only Nevada connection is inventory in a third-party fulfillment center (e.g., FBA), does not need a sales tax permit (DOR FAQ). |
| Maryland | FBA/3PL inventory generally creates physical nexus. But marketplace sellers whose Maryland sales are all facilitated by a registered marketplace facilitator are not required to register. |
| Connecticut | The opposite: an out-of-state retailer with goods on a marketplace facilitator's premises in Connecticut must register even if under the thresholds (DRS OCG-8). |
| Illinois | A retailer that fulfills any orders from Illinois inventory (including third-party warehouses) is not a "remote retailer". Its Illinois-sourced sales are taxed at the rate of the inventory or selling location (origin-based), not the destination (PIO-125; Bulletin FY 2026-12). |
| Texas | Inventory in a warehouse or distribution center means you're engaged in business in Texas, and the $500,000 safe harbor then does not apply. |
| Hawaii | Inventory stored in Hawaii (including FBA/3PL) creates physical presence and requires a general excise tax (GET) license regardless of the thresholds. |
| Wisconsin and West Virginia | The small-seller exception does not apply to sellers with inventory in the state. |
A note on Illinois. Our research also flagged earlier Illinois DOR guidance suggesting that inventory used strictly to fulfill marketplace orders may be treated differently for a marketplace seller. We're re-verifying how that guidance fits with the 2025–2026 Illinois rules above, so confirm with a professional before relying on it.
What about states with no sales tax?
Inventory in Delaware, Montana, New Hampshire or Oregon doesn't create a sales tax collection duty, because those states have no statewide sales tax. They may have other taxes. Our data notes Delaware's gross receipts tax and Oregon's Corporate Activity Tax, for example. Alaska has no state sales tax, but local taxes apply in many places, and sellers with a physical presence in a taxing municipality register with that municipality directly.
Does physical nexus mean I collect on marketplace sales too?
Usually not. The marketplace facilitator generally still collects on the orders it facilitates. What changes is that you likely need a permit in that state, may need to file returns (often reporting marketplace sales and deducting them), and must collect on any direct sales you ship there, such as Shopify or wholesale orders.
Here is an Example run through our Sales Tax Nexus Checker. It's hypothetical, not a client. A seller has FBA inventory and marketplace-only sales in three states: Nevada $90,000, Texas $200,000 and Illinois $50,000.
| State | Checker result | Why |
|---|---|---|
| Nevada | Nexus likely (physical) | Inventory flagged. The Nevada note shows the marketplace-only exception, which may apply here |
| Texas | Nexus likely (physical) | Inventory in Texas; economic sales are only 40% of $500,000, but that doesn't matter once inventory is there |
| Illinois | Nexus likely (physical) | Inventory flagged; Illinois excludes marketplace sales from the economic test, so counted sales are $0 |
The checker deliberately flags inventory as nexus and then shows the state's own note. It errs toward caution. The note tells you whether an exception might take you back out.
What should I do if I have inventory in several states?
- Map your inventory history. List each state where stock was held, and the dates.
- Check each state's note. Our state pages quote each state's physical-presence rule.
- Register where required, and set up collection on direct sales.
- Look back. If stock sat in a state for a year or two before you registered, there may be past periods to address. A voluntary disclosure may limit that exposure; our pillar guide explains how it generally works.
- Keep the map current. FBA placement changes, so review it at least quarterly.
This is the kind of multi-state question RAHA's Nexus Study is built for. We review your sales and inventory locations, register you where you have nexus, and plan for any past periods. It's a fixed price, quoted upfront. Ask about a Nexus Study, or read about our e-commerce accounting services.
Not sure whether marketplace sales count toward your threshold? Read Amazon collects sales tax, so I'm covered? Not always.
Frequently asked questions
Does one unit of inventory in a state create nexus?
The state records we reviewed generally don't set a minimum quantity for inventory. Physical presence usually doesn't depend on volume. Whether a very small or brief presence counts is a fact-specific question for a professional.
Amazon moved my stock without telling me. Do I still have nexus?
Generally, the state looks at where the goods are, not who decided to put them there. Your inventory reports are the best evidence of where stock was held and when.
Does a 3PL warehouse count the same as FBA?
Yes. The state records in our data treat inventory in FBA and 3PL warehouses the same way: as physical presence.
If I have physical nexus, do I collect tax on my Amazon orders?
Usually not. The marketplace generally collects on its facilitated orders. You collect on your direct sales into that state, and file the returns the state requires.
Can I get out of nexus by moving my inventory?
Moving stock out may end physical nexus going forward. Some states keep the obligation for the rest of the year or the next year once it starts, and past periods still count. Check each state's rule before you change anything.
Sources
- Texas Comptroller, remote sellers: https://comptroller.texas.gov/taxes/sales/remote-sellers.php
- Pennsylvania DOR, online retailers: https://www.pa.gov/agencies/revenue/resources/tax-types-and-information/sales-use-and-hotel-occupancy-tax/online-retailers
- New York DTF, nexus: https://www.tax.ny.gov/pubs_and_bulls/publications/sales/nexus.htm
- Nevada Department of Taxation, marketplace FAQ: https://tax.nv.gov/faqs/marketplace-facilitator-seller-faqs/
- Maryland COMAR 03.06.01.33: https://regs.maryland.gov/us/md/exec/comar/03.06.01.33
- Connecticut DRS: https://portal.ct.gov/drs/businesses/new-business-resource-center/registering-with-drs
- Illinois DOR, Bulletin FY 2026-12: https://tax.illinois.gov/research/publications/bulletins/fy-2026-12.html
- Hawaii Revised Statutes ch. 237: https://files.hawaii.gov/tax/legal/hrs/hrs_237.pdf
- Wisconsin DOR, remote sellers FAQ: https://www.revenue.wi.gov/Pages/FAQS/ise-remote-sellers.aspx
- West Virginia Tax Division, remote sellers: https://tax.wv.gov/Business/SalesAndUseTax/Ecommerce/RemoteSellers/Pages/RemoteSellersAndWestVirginiaTax.aspx
- Delaware Division of Revenue, gross receipts taxes: https://revenue.delaware.gov/business-tax-forms/doing-business-in-delaware/step-4-gross-receipts-taxes/
- Alaska Remote Seller Sales Tax Commission: https://arsstc.org/business-sellers/
This guide provides general information for educational purposes and is not tax, legal or accounting advice. Consult a qualified professional before acting.
