Does Amazon FBA inventory create nexus?

Yes. FBA (Fulfilled by Amazon) inventory stored in Amazon fulfillment centers creates physical nexus in those states. Physical nexus means you have a legal obligation to register in the state, collect sales tax on your own-channel sales (Shopify, direct, wholesale), and file returns, regardless of the fact that Amazon handles tax collection on the Amazon transactions.

Why FBA creates physical nexus

Physical nexus is triggered by a real, tangible presence in a state, employees, offices, or inventory. When your products sit in an Amazon warehouse, your inventory is physically in that state. Sales tax law has always treated stored inventory as a nexus-creating presence. Amazon’s marketplace facilitator status covers collection on the Amazon transaction; it doesn’t eliminate the nexus created by your inventory being there.

This is the most common misconception among FBA sellers: “Amazon handles my taxes, so I’m covered.” Amazon handles collection on Amazon orders. The nexus from the inventory is yours.

What the nexus actually requires you to do

Once FBA inventory creates nexus in a state:

Register for a sales tax permit in that state
Collect sales tax on all your direct-channel sales into that state — Shopify, your website, wholesale orders, Amazon orders you fulfill yourself (FBM)
File returns in that state on the required schedule (at minimum annual; often quarterly or monthly depending on volume)

The Amazon-facilitated transactions themselves don’t require you to collect — Amazon handles that. But your other channels do.

Which states you actually have FBA nexus in

Amazon distributes FBA inventory across fulfillment centers in 20+ states based on its logistics needs. You don’t choose which states your inventory goes to — Amazon does. States with active FBA fulfillment centers include (but are not limited to):

California, Texas, Washington, Florida, New Jersey, Pennsylvania, Ohio, Indiana, Nevada, Illinois, Kentucky, North Carolina, Tennessee, Georgia, Virginia, Arizona, Colorado, Utah, Minnesota, Kansas.

The actual list shifts as Amazon opens, closes, and reconfigures facilities. The only reliable source is your own FBA Inventory Ledger: a report in Seller Central that shows exactly where your inventory is held by state.

Related: How do I find which states Amazon stores my FBA inventory? for the step-by-step Seller Central report instructions.

The registration gap problem

Most FBA sellers discover they have nexus in 8–15 states they never registered in. This is not a minor issue, it creates retroactive exposure for uncollected tax, with potential penalties and interest going back to the date inventory first arrived in each state.

The path forward for sellers in this situation is typically a Voluntary Disclosure Agreement (VDA): a formal program where you self-report and pay back tax in exchange for penalty abatement and a limited lookback period (usually 3 years). VDAs are available in most states and are the standard remedy for this scenario.

Related: What happens if I was supposed to register earlier and didn’t?

Checklist: what to do if you’re an FBA seller

Pull your FBA Inventory Ledger from Seller Central (Reports → Fulfillment → Inventory Ledger)
Identify every state where Amazon has stored your inventory
Cross-reference against your current sales tax registrations
For states with inventory but no registration, assess your backlog exposure
If the gap is significant, consult a tax advisor about a VDA before registering
Register in all states with FBA nexus and configure your Shopify/direct channels to collect