Do Amazon and Etsy sales count toward my state nexus threshold?

In most states, yes. Marketplace-facilitated sales count toward your economic nexus threshold even though the marketplace collects the tax. This means your Amazon or Etsy sales can push you over the $100K threshold in a state, creating a nexus and registration obligation for your own-channel sales, even if you owe nothing extra on the Amazon or Etsy transactions themselves.

Why this catches sellers off guard

The logic feels backwards: if Amazon is collecting the tax, why do those sales count toward a threshold that determines whether you have to collect?

Because the threshold exists to measure your economic activity in the state, not your collection obligation on any particular transaction. States set thresholds to determine which sellers have a large enough presence to be required to participate in the compliance system. Marketplace sales count toward that measure of presence, even when the marketplace handles collection.

Most states codified this explicitly when they updated their marketplace facilitator laws. The language in many states reads something like: “all sales, including sales facilitated by a marketplace facilitator, count toward the threshold.”

States where marketplace sales may not count

A minority of states have taken the position that only direct sales count toward the threshold. This interpretation was more common in the early years of marketplace facilitator laws and has become less common as states have clarified their rules.

Before assuming your marketplace sales don’t count in a given state, verify the current rule for that state specifically. The landscape has shifted, and a rule that was accurate two years ago may have changed.

What this means in practice

If you sell on Amazon plus your own Shopify store:

• Add both together when calculating your threshold exposure in each state
• If the combined total crosses $100K in a state, you have economic nexus there
• Your Amazon sales are covered by Amazon’s collection
• Your Shopify sales in that state are your responsibility: you need a permit and need to collect

Sellers who track only their Shopify sales when assessing nexus exposure routinely miss states where they’ve crossed the threshold via Amazon volume. Audit your combined channel sales in every state at least once a year.

Related: If Amazon already collects, do I still need to register in those states? | How do I aggregate nexus thresholds across Amazon, Shopify, Etsy, and Walmart?