Amazon MCF Sales Tax: Shopify Orders and FBA Nexus
Short answer: Amazon collects sales tax on orders placed on Amazon. It does not collect it on Multi-Channel Fulfillment (MCF) orders, which are sales from your own Shopify, WooCommerce or BigCommerce store that Amazon only ships. And the FBA stock those orders ship from gives your store physical nexus in every state where Amazon keeps it, so the tax on your own-site orders into those states is yours to collect from the first sale.
If you only sell on Amazon, you’re mostly covered. This guide is for the moment you add a second channel.
| Order | Who’s the seller? | Who collects the sales tax? |
|---|---|---|
| Customer buys on Amazon.com, FBA ships it | You, through a marketplace | Amazon, as marketplace facilitator |
| Customer buys on your Shopify store, Amazon MCF ships it | You | You, at your checkout |
| Customer buys on your site with Buy with Prime | You | You |
| Customer buys on your site, a 3PL or you ship it | You | You |
- Where you owe tax on own-site orders: almost every state where Amazon stores your stock (physical nexus, no threshold; Texas is the exception), plus every state where your sales pass the economic nexus threshold.
- What to do: find your inventory states, register there, turn on collection in Shopify for those states, and file returns.
Why Amazon doesn’t collect tax on MCF orders
Section titled “Why Amazon doesn’t collect tax on MCF orders”Every state with a sales tax has a marketplace facilitator law. It makes a marketplace like Amazon collect and pay the tax on sales it facilitates: the customer searches, buys and pays on Amazon, so Amazon handles the tax.
MCF is different. The customer finds you, buys on your site and pays through your checkout. Amazon is just the warehouse and the courier, so it’s no more a marketplace facilitator than UPS is. You’re the seller, and the tax on that order is yours, the same as if you’d packed the box yourself.
That’s why your Shopify store needs its own sales tax setup even when every order ships from Amazon.
FBA stock is physical nexus for your own sales
Section titled “FBA stock is physical nexus for your own sales”You have nexus in a state when you have enough connection with it that it can make you collect its sales tax. There are two kinds:
- Economic nexus: your sales into the state pass its threshold, usually $100,000 a year (more on this below).
- Physical nexus: you have something physical there, such as an office, an employee or inventory. There’s no threshold: it starts with the first sale.
When you send stock to FBA, Amazon spreads it across its fulfilment centres to get it close to buyers. You don’t choose which states it goes to. Most states treat inventory in a third-party warehouse as yours, and so as a physical presence in that state. Texas is the main exception: if your only presence there is stock in a marketplace’s warehouse, Texas treats you as a remote seller, and you only need a permit once your total Texas sales, Amazon included, pass $500,000 (Texas Comptroller).
For sales on Amazon, that doesn’t change much, because Amazon is collecting the tax anyway. For sales on your own site, it does: every Shopify order shipped to a customer in a state where Amazon holds your stock is taxable from the first dollar, and nobody is collecting it unless you are. The full background is in Amazon FBA sales tax and nexus.
Worked example: a candle brand adds Shopify
Section titled “Worked example: a candle brand adds Shopify”Maya sells soy candles. She’s been on Amazon FBA for two years, and last year she opened a Shopify store, shipping its orders through Amazon MCF. Her Seller Central reports show Amazon held her stock in California, Texas, Pennsylvania and New Jersey.
| State | Amazon sales | Shopify sales | Stock there? | Who owes tax on the Shopify sales |
|---|---|---|---|---|
| California | $41,000 | $6,200 | Yes | Maya, from the first sale |
| Texas | $28,000 | $3,900 | Yes | Nobody yet: Texas exception, under $500,000 |
| Pennsylvania | $12,000 | $3,200 | Yes | Maya, from the first sale |
| New Jersey | $9,000 | $1,400 | Yes | Maya, from the first sale |
| New York | $15,000 | $2,600 | No | Nobody yet: under $500,000 and 100 sales |
Amazon has been collecting tax on all of the Amazon column. But Maya hasn’t charged tax on her Shopify sales, so in three of the four warehouse states she owes the tax she didn’t collect. Texas is the exception, as long as her total Texas sales stay under $500,000. In Pennsylvania alone, $3,200 at the 6% state rate is $192, more if some of those buyers were in Philadelphia or Allegheny County, which add a local tax. She can’t add that tax to orders that are already paid, so it comes out of her margin.
Her fix: register in California, Pennsylvania and New Jersey, turn on collection for those states in Shopify, and deal with the past year through a voluntary disclosure agreement if the amounts justify it.
Step by step: making an Amazon + Shopify setup compliant
Section titled “Step by step: making an Amazon + Shopify setup compliant”1. Find the states where Amazon holds your stock
Section titled “1. Find the states where Amazon holds your stock”In Seller Central, go to Reports → Fulfillment → Inventory Ledger and download a monthly report for the last 12 months. It lists the fulfilment centres that received, held and shipped your units. Each fulfilment centre code maps to a state; Amazon doesn’t print the state in the report, so match the codes against a fulfilment centre list. Keep this list up to date: Amazon moves stock between centres all the time, so check it at least quarterly.
Ignore Delaware, Montana, New Hampshire and Oregon: they have no state sales tax. Alaska has no state sales tax either, though some towns do.
2. Add the states where your sales pass a threshold
Section titled “2. Add the states where your sales pass a threshold”For states where you don’t have stock, the usual economic nexus thresholds apply to your sales there. Whether your Amazon sales count towards that total depends on the state: see do marketplace sales count towards nexus? The US nexus calculator checks your totals against each state.
3. Register for a sales tax permit in each state
Section titled “3. Register for a sales tax permit in each state”Register with each state’s revenue department before you start collecting. Collecting sales tax without a permit is a problem in its own right. Our seller’s permit guide explains how, including for businesses outside the US.
4. Turn on collection in Shopify for those states
Section titled “4. Turn on collection in Shopify for those states”In Shopify, go to Settings → Taxes and duties → United States, choose Collect sales tax, and add each state with its registration number. Shopify then charges the right rate at checkout for orders shipped to those states, including MCF orders, because it’s your checkout. Shopify won’t add a state for you just because Amazon moved your stock there; you have to add each one.
5. File returns, and only include your own sales
Section titled “5. File returns, and only include your own sales”Each state gives you a filing frequency (monthly, quarterly or yearly). On your returns, report the sales you made and the tax you collected. Amazon reports and pays the tax on its own orders, but some states ask you to report your marketplace sales too and then deduct them, so you’re not taxed twice. Read each state’s return instructions.
Where economic nexus fits in
Section titled “Where economic nexus fits in”Physical nexus only covers states where your stock sits. Your own-site sales can still create nexus elsewhere once they’re big enough. In most states the threshold is $100,000 of sales a year; California and Texas use $500,000, and New York needs $500,000 and more than 100 sales.
The catch for Amazon sellers: some states add your Amazon sales to your website sales when they check the threshold, and others leave marketplace sales out. A seller with $80,000 on Amazon and $25,000 on Shopify into one state can be over the threshold in one state and under it in the next. The state-by-state answer is in do marketplace sales count towards nexus?
Common mistakes
Section titled “Common mistakes”- Assuming Amazon collects tax because Amazon ships the order. It doesn’t, for MCF. Collection follows where the customer bought, not who shipped it.
- Checking only your Shopify sales against the $100,000 threshold. Physical nexus has no threshold. One Shopify order into a warehouse state is taxable.
- Registering once and never checking again. Amazon opens new fulfilment centres and moves your stock. A state you didn’t have last year can appear this quarter.
- Turning on collection without a permit. Register first, then collect.
- Paying tax twice on Amazon sales. If a state’s return asks for gross sales, deduct the marketplace sales Amazon already reported.
How GoodVat helps
Section titled “How GoodVat helps”GoodVat connects to Amazon and Shopify together, so it sees both your inventory states and your sales on every channel. It tells you where you have nexus, registers you in those states through our accountant network, calculates tax at your checkout, and files the returns, keeping Amazon’s marketplace sales out of the tax you pay.
Does Amazon collect sales tax on MCF orders?
Section titled “Does Amazon collect sales tax on MCF orders?”No. Multi-Channel Fulfillment only ships the parcel. The sale happened on your own website, so you’re the seller and Amazon isn’t acting as a marketplace facilitator. Any sales tax due on an MCF order has to be charged at your own checkout, such as Shopify’s, and paid to the state by you.
Does using Amazon MCF create sales tax nexus?
Section titled “Does using Amazon MCF create sales tax nexus?”The stock does, not the shipping service. Inventory you keep in an Amazon fulfilment centre is a physical presence in that state. Amazon still collects the tax on your Amazon orders, but for orders from your own website, most states treat that stock as nexus from the first sale, with no revenue threshold. Texas is an exception: there, you only need a permit once your total Texas sales pass $500,000.
Do I need a sales tax permit if I only sell on Amazon?
Section titled “Do I need a sales tax permit if I only sell on Amazon?”Usually not. Amazon collects and pays the sales tax on Amazon orders in every state with a sales tax, and most states don’t require sellers whose only sales there go through a marketplace to register. Washington and New Jersey are exceptions if Amazon stores your stock there. And it changes once you sell through your own website as well, especially in states where Amazon stores your stock.
Which states do I owe sales tax in if I use FBA and Shopify?
Section titled “Which states do I owe sales tax in if I use FBA and Shopify?”For your Shopify orders: every state where Amazon stores your inventory and that has a sales tax, plus any state where your total sales pass its economic nexus threshold. Find the warehouse states in Seller Central’s Inventory Ledger report, then register, collect at checkout and file in each of them.
Is Buy with Prime treated the same as MCF for sales tax?
Section titled “Is Buy with Prime treated the same as MCF for sales tax?”Yes, for nexus purposes. A Buy with Prime order is placed on your website, and you’re the seller, so Amazon isn’t the marketplace facilitator. The stock behind it sits in the same fulfilment centres, so the same states apply.
Related guides
Section titled “Related guides”- Amazon FBA sales tax and nexus: what FBA stock means when you sell only on Amazon
- Do marketplace sales count towards nexus?: the state-by-state threshold rules
- Shopify sales tax: setting up collection and what Shopify doesn’t do
- How to get a seller’s permit: registering state by state
- Best multichannel sales tax software: tools that see Amazon and Shopify together