Amazon FBAUS Sales TaxUK SellersNexusCross-Border Ecommerce

Selling on Amazon US from the UK: FBA Tax Guide

Taking your UK Ltd brand to Amazon.com? Learn how US sales tax, FBA physical nexus, IRS EIN registration, Form W-8BEN-E, and US customs work in 2026.

GoodVat Team

October 22, 2026·9 min read

Ask any seven-figure British Amazon seller what they did after Brexit made selling into Europe a paperwork slog, and you will hear the same answer: they skipped the English Channel and went straight across the Atlantic to Amazon.com.

Why wrestle with seven different European languages, sworn Spanish translations, and French fiscal representatives when the United States offers 335 million consumers, one language, and a market 5x the size of Amazon.co.uk?

Even better: unlike the UK, there is no 20% import VAT at the US border to choke your cash flow.

Still, British sellers routinely trip over three distinctly American landmines: 25+ state physical nexus from FBA warehouses, rooftop-level local tax rates on Shopify sales, and a brutal $25,000 IRS penalty for founders who incorporates a Delaware LLC without knowing federal tax rules.

Here is the plain-English 2026 playbook for taking your UK Amazon FBA brand to the United States—and how GoodVat and our US partner CPAs keep you compliant on both sides of the pond.

HMRC vs. The US Tax System: What UK Sellers Need to Unlearn

In the UK, one tax authority (HMRC) sets one standard rate (20%) with one registration threshold (£90,000).

In the United States, there is no national sales tax. Sales tax is run by 45 individual states plus Washington, D.C., layered with over 14,000 county, city, and special district tax jurisdictions.

Tax Rule	United Kingdom (HMRC VAT)	United States (State Sales Tax)
Tax Rate	20% standard (5% reduced, 0% zero-rated) nationwide	0% to ~11.5%, varying by state, county, city, and street address
Listing Price Display	VAT-inclusive (£24.00 includes £4.00 VAT)	Tax-exclusive ($24.00 on listing; sales tax added at checkout)
Import Tax at the Border	20% Import VAT (postponed via PVA or reclaimed)	0% Import Sales Tax (only customs duty based on HS code)
Input Tax Recovery	Reclaim 20% VAT paid on inventory & UK expenses	None (Businesses use state Resale Certificates to buy tax-free)
Registration Trigger	£90,000 UK turnover (or £0 for non-UK FBA sellers)	State-by-state: Physical Nexus ($0 threshold) or Economic Nexus ($100k–$500k)

Want to see how wild US local tax layering gets? Plug a Texas or California ZIP code into our free US sales tax calculator—a single city block can combine state, county, city, and transit authority taxes into four separate line items.

How US Amazon FBA Works (And the 25-State Nexus Catch)

When you ship inventory to Amazon US, you usually send your pallets to one or two inbound ports (like Los Angeles/Long Beach on the West Coast or Savannah/Newark on the East Coast). Once Amazon checks your cartons in, its algorithm automatically transfers your units across 25 to 30+ states so Prime buyers from Seattle to Miami get one- or two-day shipping.

Here is how US sales tax works once your stock is in those warehouses:

1. Amazon.com sales are covered by Marketplace Facilitator laws

Every single one of the 45 US states with a sales tax has a Marketplace Facilitator law. Whenever a US shopper buys your product on Amazon.com, Amazon calculates, collects, and remits the sales tax to the state under Amazon’s own registration.

If 100% of your US revenue comes through the Amazon.com checkout, you do not collect sales tax from those customers.

2. Why FBA Physical Nexus still bites UK brands

So why do UK sellers get into trouble with US state tax authorities? Because under US law, storing even a single unit of inventory in an Amazon fulfillment center creates physical nexus in that state from dollar one.

Physical nexus overrides the famous $100,000 Wayfair economic nexus threshold. The moment you have stock sitting in Amazon warehouses across California, Texas, Pennsylvania, Florida, Illinois, and Washington:

Your US Shopify / WooCommerce store owes tax from Order #1: Most successful UK FBA brands launch a US D2C Shopify store (often fulfilled using Amazon Multi-Channel Fulfillment, or MCF). Because your Amazon FBA stock already created physical nexus in 25+ states, your Shopify store is legally required to register, collect, and file sales tax in every one of those states from your very first $1 sale. Amazon’s marketplace shield never covers your Shopify store or B2B wholesale invoices.
State permit & marketplace-deduction returns: Several US states still require sellers who hold physical inventory in-state (or cross state economic nexus thresholds) to register for a state sales tax permit and file periodic returns reporting their gross sales minus a marketplace-facilitator deduction.

UK Ltd vs. US LLC: How to Avoid the $25,000 Form 5472 Trap

Spend ten minutes in a UK Amazon sellers WhatsApp group and someone will tell you to pay $500 to set up a Delaware or Wyoming LLC before launching in America.

Stop. For 90% of UK sellers launching on Amazon.com, forming a US LLC on day one is an expensive mistake.

Your UK Ltd works right out of the box: You can connect your existing UK Limited company to North American Seller Central, get a US federal EIN (Employer Identification Number) in your UK Ltd’s name, and complete Form W-8BEN-E online. Under the UK–US Double Taxation Treaty, your UK Ltd claims 0% US federal income tax withholding on your Amazon sales as long as you don’t have a permanent US office or US employees.
The $25,000 IRS Form 5472 Penalty: If you form a single-member US LLC owned by you (a UK citizen/resident) or your UK Ltd, the IRS classifies that LLC as a Foreign-Owned Disregarded Entity. You must file IRS Form 5472 and a pro-forma Form 1120 every single year to report every pound or dollar transferred between your UK business and the US LLC. UK high-street accountants almost never know this form exists—and the IRS charges a flat $25,000 penalty per missed filing.

Start with your UK Ltd. If you later need a US entity for retail distribution (Target, Walmart brick-and-mortar) or US product liability structuring, our US partner CPAs will structure it properly and handle your annual Form 5472.

Step-by-Step Playbook: Expanding from the UK to Amazon USA

Step 1: Get a US EIN for your UK Ltd in 15 minutes

You need an IRS Employer Identification Number (EIN) to clear US customs and register for state sales tax permits. You do not need a US Social Security Number (SSN) or US address.

Fill out IRS Form SS-4 with your UK Ltd details (type "Foreign" on Line 7b), and call the IRS International Business line at +1 (267) 941-1099 between 11:00am and 4:00pm UK time—or let GoodVat’s US partner accountants pull your EIN for you. See our Foreign Sellers Guide to US Sales Tax for full details.

Step 2: Zero-rate your UK exports (or ship direct from factory)

Shipping from your Factory (China/India/EU) → US FBA: The goods never enter the UK, so they are outside the scope of UK VAT.
Shipping from your UK Warehouse → US FBA: Moving stock from the UK to the US is a zero-rated export (0% UK VAT). Keep your UK export customs declaration (CDS export evidence) and bill of lading so HMRC doesn’t challenge your zero-rating during an inspection.

Step 3: Clear US Customs as a Foreign Importer of Record

Amazon will never act as the Importer of Record (IOR) for your FBA shipment. And don’t plan around the old $800 Section 321 de minimis exemption: it has been suspended for every country since 29 August 2025, so every FBA shipment owes duty. Sending small parcels yourself? See sending parcels to the USA from the UK.

Instead, your freight forwarder registers your UK Ltd as a Non-Resident Importer of Record using CBP Form 5106 and purchases an annual Continuous Customs Bond (~$450/year) linked to your new EIN.

Step 4: Connect Amazon & Shopify to GoodVat

Once your listings go live on Amazon.com, connect your Amazon and Shopify accounts to GoodVat. Instead of manually decoding Amazon’s Inventory Event Detail report every month, GoodVat automatically tracks:

Every US state where Amazon stores your FBA inventory (physical nexus)
Your rolling 12-month sales against every state’s economic nexus threshold
Your UK HMRC Making Tax Digital (MTD) VAT obligations and EU VAT/IOSS side by side

Step 5: Let GoodVat + Our US Partner CPAs Handle State Filings

If you ask UK/EU VAT specialists like AVASK or Taxually to manage your US state sales tax and rooftop checkout rates, you hit a wall: Taxually doesn’t calculate tax at checkout or cover US state sales tax for standard e-commerce sellers (see GoodVat vs Taxually). And if you sign up for a US-only tool like TaxJar, it can’t file your UK MTD returns or handle non-US directors lacking an SSN.

GoodVat bridges the UK and the US in a single platform:

One dashboard for HMRC + 50 US States: Track your UK VAT, EU IOSS/OSS, and US state sales tax in one account.
Real-time US checkout calculation: Launching a US Shopify store alongside Amazon? GoodVat calculates rooftop-accurate state, county, city, and district rates in all 14,000+ US jurisdictions.
Vetted US partner CPAs: When it’s time to register for state sales tax permits (even in states whose online forms block UK postcodes and demand an SSN) or file state returns, our US partner accountants handle the registrations and filings for you at transparent per-state rates.

FAQ

Can I sell on Amazon.com using my existing UK Limited (Ltd) company?

Yes. You do not need to form a US LLC to sell on Amazon.com. You can register your UK Ltd directly on North American Seller Central, obtain a US IRS Employer Identification Number (EIN) for your UK company, and submit Form W-8BEN-E to claim 0% US federal withholding under the UK–US Double Taxation Treaty.

Who pays US sales tax when a UK seller uses Amazon FBA in the US?

On Amazon.com orders, Amazon calculates, collects, and remits the state and local sales tax in all 45 sales-tax states (plus Washington, D.C.) under US Marketplace Facilitator laws. However, if you also sell through your own Shopify store or B2B wholesale, you are responsible for collecting and filing sales tax in every state where your FBA stock creates physical nexus.

What is the US Amazon FBA physical nexus trap for UK sellers?

Unlike the UK’s single £90,000 VAT threshold, US states have two triggers for sales tax: economic nexus (usually $100,000 in sales) and physical nexus. Storing even one unit of inventory in an Amazon FBA warehouse in California, Texas, Florida, or Pennsylvania creates immediate physical nexus in that state from dollar one—meaning any off-Amazon sales into those states are taxable immediately.

Why can forming a Delaware or Wyoming LLC cost a UK founder $25,000?

A single-member US LLC owned by a UK resident or UK Ltd company is treated by the IRS as a Foreign-Owned Disregarded Entity. It must file IRS Form 5472 and a pro-forma Form 1120 every year to report intercompany transactions. Missing or filing Form 5472 late carries an automatic $25,000 IRS penalty.

Do I pay 20% UK VAT when shipping inventory from the UK or China to US Amazon FBA?

No. Goods exported from the UK to the US are zero-rated (0% UK VAT) provided you keep official export evidence for HMRC (reported in Box 6 of your UK VAT return). Goods shipped directly from a manufacturer in China or India to a US Amazon warehouse never enter the UK VAT net at all.

Why use GoodVat instead of AVASK or Taxually when expanding from the UK to the US?

UK/EU VAT agencies like Taxually don’t cover US state sales tax for growing brands, and US-only tools like TaxJar don’t handle your UK Making Tax Digital (MTD) VAT returns. GoodVat manages both your UK/EU VAT and all 14,000+ US sales tax jurisdictions in one platform, backed by local UK and US partner accountants.

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