Overview: E-commerce Sellers with a US LLC
An LLC provides e-commerce sellers with liability protection for product-related claims, access to US wholesale suppliers, the ability to open Amazon Seller Central and Shopify accounts, and a professional US business presence.
Best Business Structure
For e-commerce sellers, we recommend: Single-Member LLC (Disregarded Entity) or Multi-Member LLC
An LLC provides e-commerce sellers with liability protection for product-related claims, access to US wholesale suppliers, the ability to open Amazon Seller Central and Shopify accounts, and a professional US business presence.
Tax Considerations for E-commerce Sellers
E-commerce sellers with US-based inventory or fulfillment (like Amazon FBA) may have physical nexus in the US, creating ECI. Sales tax obligations depend on where you have nexus (physical presence or economic nexus from exceeding state thresholds). If you ship from overseas directly to US customers, you likely don't have ECI but still have filing obligations.
Important Note for E-commerce Sellers
Amazon FBA sellers should be aware that storing inventory in Amazon warehouses creates physical nexus in those states, potentially triggering state income tax and sales tax obligations. As of 2025, Amazon collects and remits sales tax on behalf of marketplace sellers in all states that impose sales tax, but you may still have state income tax filing obligations.
Required Tax Forms
As a non-resident e-commerce seller with a US LLC, you'll typically need these forms:
- Form 5472 + Pro Forma 1120 (required annually)
- State sales tax returns (if nexus exists)
- Form 1040-NR (if ECI exists from US-based inventory)
- Form W-7 (ITIN application)
- Form SS-4 (EIN 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 E-commerce Sellers
These business expenses are typically deductible for e-commerce sellers operating through a US LLC:
- Cost of goods sold (COGS)
- Shipping and fulfillment costs
- Amazon/Shopify platform fees
- Product photography and listing optimization
- Advertising costs (PPC, social media ads)
- Packaging materials
- Returns and refunds
- Insurance for products
- Software tools (inventory management, analytics)
Tips for Tax Compliance
- Register for sales tax in states where you have nexus
- Use sales tax automation software (TaxJar, Avalara)
- Keep detailed inventory records for COGS calculations
- Understand the difference between drop shipping and FBA for tax purposes
- Consider whether Amazon FBA creates nexus in warehouse states
- Track all inter-company transactions (you to LLC, LLC to suppliers)
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