Most bulk resellers think of tax paperwork in one direction: getting a resale certificate so you don’t pay sales tax when you buy inventory wholesale. The other direction – sales tax nexus, which governs when you owe sales tax on what you sell – gets less attention, and it’s easy to assume Amazon or your marketplace “just handles it.” That assumption is only partly true, and the gap matters once you’re selling real volume across state lines.
What Sales Tax Nexus Actually Means
Sales tax nexus is the connection between your business and a state that’s strong enough to create a tax obligation there – specifically, the requirement to register, collect, and remit sales tax on sales into that state. Nexus is evaluated state by state, so a business can have it in some states and not others depending on where it sells and where its inventory or operations actually are.
Two Ways You Can Trigger It
Physical nexus comes from an actual presence in a state: an office, employees, a warehouse, inventory stored there, or even attending a trade show. Economic nexus is different – a state can require you to collect and remit tax once your sales into that state cross a revenue (and sometimes transaction-count) threshold, even with zero physical presence at all.
Why FBA-Style Inventory Storage Complicates This
When a marketplace’s fulfillment network moves and stores your inventory across its own warehouse network, that inventory can end up sitting in states you never chose to operate in. Whether that specific arrangement creates physical nexus in a given state depends on that state’s own rules, and it’s genuinely one of the more unsettled areas of multi-state sales tax – worth a real conversation with a sales tax professional once your inventory is being warehoused in states you don’t control.
Thresholds Vary a Lot by State
Most states set their economic nexus threshold at $100,000 in annual sales, but there’s real variation: California, New York, and Texas use a $500,000 threshold, while Alabama and Mississippi use $250,000. Several states also add a transaction-count trigger (commonly 200 transactions) alongside the revenue threshold, though a few states – including Alaska and Utah as of 2025, and Illinois starting in 2026 – have dropped the transaction-count rule entirely. These numbers and rules change, so treat any specific figure as a starting point to verify, not a permanent fact.
Marketplace Facilitator Laws Don’t Make This Someone Else’s Problem
Under marketplace facilitator laws, Amazon, eBay, and Walmart Marketplace are required to collect and remit sales tax on qualifying orders in most states now – and in practice, that collection does happen automatically on marketplace sales. But two details matter: marketplace sales still typically count toward your own economic nexus threshold even though the platform is the one collecting the tax, and marketplace collection doesn’t cover everything – it doesn’t register your business in a state, doesn’t file your returns, and doesn’t apply to sales you make outside that marketplace (your own website, wholesale side sales, a different platform).
What This Means Practically
For a bulk reseller running everything through Amazon, eBay, or Walmart, the realistic risk isn’t usually the sales tax collection itself – the marketplace is handling that piece. It’s the registration, filing, and documentation obligations that can exist in a state even when the marketplace already collected the tax, plus any sales that happen outside marketplace channels. Once you’re seeing real, sustained volume in states beyond your home state, it’s worth tracking your sales by state and looping in a sales tax professional rather than assuming the marketplace relationship covers you completely.
This is general information, not tax advice for your specific situation – state nexus rules change and vary, and a qualified sales tax professional can tell you exactly where you stand.
Wholesale Distributors US provides the documentation you need for your own resale and tax paperwork – apply for a wholesale account to see current terms.
FAQ
Does Amazon collect sales tax for me so I don’t have to worry about nexus?
Amazon collecting and remitting tax on marketplace orders doesn’t eliminate your nexus obligations. Marketplace sales still typically count toward your economic nexus threshold, and you may still need to register and file in a state even when the marketplace already collected the tax on those specific sales.
What’s the difference between economic and physical nexus?
Physical nexus comes from an actual presence in a state, like a warehouse, employees, or stored inventory. Economic nexus is triggered purely by sales volume – once your sales into a state cross that state’s threshold, you can owe tax there regardless of physical presence.
Do I need to register in every state where my FBA inventory is stored?
Possibly, but it depends on that state’s specific rules, and this is one of the more unsettled areas of multi-state sales tax. If your inventory is being warehoused across multiple states, it’s worth a direct conversation with a sales tax professional rather than guessing.
Related reading: Resale Certificate Guide for Wholesale Buyers | Amazon IPI Score & FBA Capacity Limits | Wholesale Purchasing for Amazon, eBay & Walmart Resellers | The INFORM Consumers Act: High-Volume Seller Guide | 1099-K Reporting Threshold for 2026: What Wholesale Resellers Need to Know
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