U.S. Tax for Cross-Border E-Commerce Sellers: The Marketplace Collecting Sales Tax Does Not Mean You Have No Obligations

Layer one: entity income tax and information returns. Most sellers operate through a U.S. LLC or corporation. A single-member LLC wholly owned by a Chinese company or individual must file a pro forma Form 1120 with Form 5472 for any year with contributions, loans or expenses paid by the owner; a C corporation files Form 1120 plus 5472; a multi-member LLC files Form 1065 and withholds on foreign partners. Marketplace sales in the U.S. are generally U.S.-source income — "the company is in China and the money is in China" does not remove the filing.

Layer two: sales tax. Every state with a sales tax has a marketplace-facilitator law, so Amazon, Walmart, TikTok Shop and similar platforms collect and remit on marketplace orders. Sales through a Shopify or DTC site, B2B wholesale and offline channels remain your responsibility; FBA inventory in a state can create physical nexus, and DTC sales above a state's economic-nexus threshold (most commonly $100,000) require registration. Whether a marketplace-only seller must still register in an inventory state varies by state and has to be checked state by state.

Layer three: the books. Marketplace settlements arrive net — refunds, fees, advertising, storage and reimbursements all mixed together. Cross-border inventory must carry purchase price, duty (materially higher since the de minimis exemption ended in 2025), freight and storage into landed cost before gross margin means anything. Books that are not reconciled settlement by settlement can only be "estimated" at tax time, and a mismatch between the platform's 1099-K and your reported revenue is one of the most common reasons the IRS writes.

More factories and brands are dropping U.S. distributors and selling direct through their own site and a U.S. warehouse. Settle four things before the first shipment; they decide how every later transaction is booked.

(1) A U.S. company is unavoidable. Warehouses (3PLs, overseas-warehouse operators) receive and ship goods; they do not clear customs, act as importer or pay duties, and that is normal. The importer of record must be a legal entity: your U.S. company. The customs broker and the customs bond sit under its name, and duties go into its inventory cost. "DDP / all-in" freight only means the forwarder handles clearance on someone's behalf; for tax purposes the importer still has to be a specific entity, so ask whose name is on the entry and whether you get the CBP Form 7501. Where and how to form the company: see the U.S. company formation page.

(2) U.S. orders must flow through the U.S. company. If your site settles straight to the factory's account and the U.S. company only ships, the U.S. company has expenses but no revenue and cannot file sales tax. The right structure: route U.S. orders to the U.S. company by market (Shopify supports separate stores or markets), the factory sells to the U.S. company at a wholesale price, and the U.S. company collects payment, ships, and collects and remits sales tax. The factory-to-U.S.-company sale is a related-party transaction and its price must be consistent with the customs value.

(3) The state follows your people and your inventory. The state where the warehouse sits requires sales-tax registration from the day goods arrive; the state where the person in charge lives is where the company is managed. Keeping both in one state is simplest; California or Nevada are common on the West Coast. Other states are tracked monthly against their economic thresholds ($100,000 a year in most states; $500,000 in California, Texas and New York) and registered only when crossed.

(4) Use the forwarder and warehouse you already have, but change two things. The forwarder your factory uses for Australia or Europe almost certainly has a U.S. agent. Instead of FOB to a local distributor, you need door-to-door, customs clearance in the U.S. company's name, duties advanced by the forwarder. Three rules for the warehouse: contract in the U.S. company's name with the warehouse address stated; the warehouse state is your first sales-tax state; confirm they accept the U.S. company as the owner of the goods and how they hand off to the broker. We do not source or endorse specific logistics providers.

Landed-cost analysis (optional; the fee is fully credited when you sign). You cannot set a price because you cannot see the cost. Give us five inputs — ex-works price, first-leg freight quote, the duty rate from your broker, the 3PL quote, expected return rate — and within a week you get a landed-cost table: cost per SKU delivered, break-even price, pricing floor, and a tax comparison of factory ownership versus personal ownership of the U.S. company, to take back to the factory.