Overview: Amazon FBA Sellers with a US LLC
Amazon requires a legitimate business entity for its marketplace. A US LLC provides credibility with Amazon's Brand Registry program, access to Amazon Lending, and liability protection. It's also required for obtaining an Amazon Professional seller account.
Best Business Structure
For amazon fba sellers, we recommend: Single-Member LLC (Disregarded Entity) or Multi-Member LLC
Amazon requires a legitimate business entity for its marketplace. A US LLC provides credibility with Amazon's Brand Registry program, access to Amazon Lending, and liability protection. It's also required for obtaining an Amazon Professional seller account.
Tax Considerations for Amazon FBA Sellers
FBA sellers have a unique tax situation: storing inventory in Amazon warehouses creates physical nexus in those states. As of 2025, Amazon collects marketplace sales tax on behalf of sellers in all taxing states, but you may still have state income tax filing obligations in warehouse states. Your ECI determination depends on whether having inventory in the US constitutes a "trade or business" in the US.
Important Note for Amazon FBA Sellers
The IRS considers inventory stored in the US as creating a US trade or business. This means FBA sellers likely have ECI and may owe US federal income tax. However, tax treaties may limit the US's ability to tax this income if you don't have a "permanent establishment" in the US. The definition of permanent establishment varies by treaty, but Amazon warehouses you don't control generally don't qualify. Consult a specialist to apply your specific treaty.
Required Tax Forms
As a non-resident amazon fba seller with a US LLC, you'll typically need these forms:
- Form 5472 + Pro Forma 1120 (required annually)
- Form 1040-NR (likely required due to US nexus from FBA inventory)
- State income tax returns (for nexus states)
- State sales tax returns (in some cases)
- Form W-7 (ITIN application)
Key Filing Deadline
Form 5472 + Pro Forma 1120: Due April 15 (extension available to October 15). Penalty for non-filing: $25,000. This applies even if your LLC had zero income.
Common Deductions for Amazon FBA Sellers
These business expenses are typically deductible for amazon fba sellers operating through a US LLC:
- Amazon FBA fees (referral fees, fulfillment fees, storage fees)
- Product sourcing and manufacturing costs
- Shipping to Amazon warehouses
- Product photography and A+ content
- Amazon PPC advertising
- Product packaging and labeling
- Returns and damaged goods costs
- Product liability insurance
- Inspection and quality control costs
Tips for Tax Compliance
- Understand that FBA inventory in Amazon warehouses creates nexus
- Amazon now collects sales tax in all states — but monitor this
- Track FBA fees carefully for accurate profit calculations
- Register your brand with Amazon Brand Registry through your LLC
- Keep meticulous inventory records for COGS calculations
- Consider whether the 183-day threshold under your treaty exempts your ECI
- Open a US bank account for your LLC's Amazon disbursements
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