Do Non-US Amazon and E-Commerce Sellers Owe US Tax?
Selling into the US from abroad through an Amazon or Shopify store raises three separate tax questions that are easy to confuse: US income tax, the Form 5472 information return, and state sales tax. This guide walks through each one plainly, so a non-resident seller knows what actually applies and what to file.
Two separate questions: income tax and sales tax
The most useful thing a non-resident seller can understand up front is that "do I owe US tax" is not one question but three, each with its own answer. US income tax asks whether your profit is taxable in the US. The Form 5472 information return asks whether your foreign-owned US company had reportable dealings with you, regardless of profit. State sales tax asks whether you must collect and remit tax on sales into a given state. You can owe one and not the others, and the common mistake is answering all three with a single guess.
The rest of this guide takes them one at a time. If you have not formed the company yet, the best-state-to-form-an-LLC guide and the Form 5472 guide are natural companions.
Do you owe US income tax? ECI and ETBUS
Whether a non-resident owes US income tax on selling profit turns on two linked concepts: whether you are engaged in a US trade or business (ETBUS), and if so, whether your income is effectively connected to it (ECI). Only effectively connected income is taxed at regular US rates on a net basis. This is a facts-and-circumstances test, not a bright line, and having a US LLC or US customers does not by itself decide it.
In practice, many sellers who run everything from abroad, with no US staff and no dependent US agent, take the position that they are not engaged in a US trade or business and so have no US income tax on their selling profit. Others clearly do have ECI, for example when they build out US-based operations, staff, or a fixed place of business. Because the answer drives whether you file a US income tax return at all, it is worth reaching a documented position rather than assuming, and treaty provisions can change the result for residents of treaty countries.
A "no US income tax" position is about income tax only. It does not remove the Form 5472 information return or state sales tax obligations covered below, which apply on their own terms.
The Form 5472 filing your LLC still owes
If you sell through a foreign-owned single-member US LLC, that LLC is a disregarded entity for income tax but is treated as a separate corporation solely for one purpose: filing Form 5472 with a pro-forma Form 1120. It is due for any year the LLC had a reportable transaction with you, and forming and funding the company both count as reportable transactions. This applies even in a year with no profit and even when you owe no US income tax.
The penalty for filing Form 5472 late is $25,000 per form, which is why the small information return is worth handling on time. The full mechanics, including what counts as a reportable transaction and how to get an EIN without an SSN, are in our dedicated Form 5472 guide. The short version for sellers: this is the filing most often missed, and it is separate from both income tax and sales tax.
Sales tax nexus from FBA inventory
State sales tax is a separate system from federal income tax, and it can reach a non-resident seller who owes no US income tax at all. Two things create a sales tax connection, or nexus, with a state: physical presence and economic activity. For Amazon FBA sellers, the physical-presence trigger is often inventory: when Amazon stores your goods in a fulfillment warehouse in a state, that stored inventory can create physical nexus there.
- Physical nexus: inventory held in a state (including FBA warehouses), an office, or staff
- Economic nexus: crossing a state revenue threshold. $100,000 in sales is the most common figure, but it is not universal. Some states set a higher bar (California uses $500,000) and many have dropped the transaction-count test entirely, so check the specific state rather than assuming the $100,000-or-200-transactions shorthand
- Marketplace facilitator rules: Amazon and similar platforms collect and remit sales tax on marketplace sales in most states
- Off-marketplace sales: your own Shopify or direct sales are not always covered by a marketplace, so your own registration may still apply
The practical result is that marketplace facilitator laws remove much of the collection burden for Amazon sales, but they do not automatically clear every registration or filing obligation, especially once you sell off-marketplace. A nexus review tells you which states you actually have obligations in, so you register where you must and not everywhere by default. Our e-commerce and Amazon seller services handle that analysis and the resulting registrations and filings.
What a non-resident seller actually files
Putting the three questions together, a typical non-resident seller operating through a foreign-owned single-member US LLC looks at the following each year. Your own facts may add or remove items, which is exactly why a short scoping conversation is useful.
Form 5472 with a pro-forma Form 1120, due April 15 and extendable to October 15 with Form 7004, for any year with a reportable transaction.
A US income tax return only if you have effectively connected income. If your documented position is that you are not engaged in a US trade or business, there may be no income tax return; if you do have ECI, the return follows.
State sales tax registration and returns where inventory or economic activity created nexus, coordinated with the marketplace facilitator collection that already happens.
Registered agent, the state annual report, and clean books that separate owner funding from business activity, so the Form 5472 and any income analysis are supportable.
Foreign-owned sellers often fold these recurring filings into one annual compliance membership so the calendar is handled in one place, prepared and signed by an Enrolled Agent.
Frequently asked questions
Primary sources
- IRS Publication 519, U.S. Tax Guide for Aliens
- IRS, Effectively connected income (ECI)
- 26 U.S.C. 864 (definitions, including trade or business within the United States)
- IRS Instructions for Form 5472
- 26 U.S.C. 6038A (information reporting by foreign-owned corporations, and its penalties)
- IRS, About Form 7004, automatic extension of time to file business returns
- IRS Instructions for Form W-8BEN
- California Department of Tax and Fee Administration, Use Tax Collection Requirements Based on Sales into California (Wayfair)
Related Guides
Form 5472 and the Foreign-Owned US LLC
Why a foreign-owned single-member LLC must file Form 5472 with a pro-forma Form 1120, who counts as a 25% foreign owner, what a reportable transaction is, and the statutory $25,000 penalty. Covers the April 15 deadline, extensions, and getting an EIN without an SSN.
World Cup 2026 Taxes: Do Foreign Players Pay US Tax?
The 2026 World Cup paid a record $871M, but the IRS and the states tax the players, not the winning team. How foreign athletes are taxed treaty by treaty and state by state: the 30% withholding rule, Article 17 treaty floors, Central Withholding Agreements, state jock taxes, Canada and Mexico, and Form 1040-NR.
FDAP Income Guide
FDAP income explained: the 30% withholding tax, treaty benefits, key exemptions, and reporting forms for nonresident aliens.
Disclaimer: This guide is general information, not tax advice for your specific situation. Tax law changes, and how a rule applies depends on your facts. Reading this page does not create a client relationship with Arc & Ledger LLC. Before acting on anything here, confirm how it applies to your circumstances with a qualified tax professional.