Physical Nexus & Inventory

Can I negotiate with a 3PL to only store inventory in states where I'm already registered?

Yes, many 3PLs will agree to store inventory in a limited set of states. This is a contractual negotiation, not a standard feature. It requires selecting a 3PL with facility locations that match your registered states, and building the restriction into your fulfillment agreement.

Do trade shows, conferences, or events trigger sales tax nexus?

Attending a trade show and making sales can trigger physical nexus in that state. Whether attending without selling creates nexus depends on the state. Here's the breakdown.

Does Amazon FBA inventory create nexus?

Yes — FBA inventory stored in Amazon's fulfillment centers creates physical nexus in those states, regardless of whether Amazon collects tax on your Amazon transactions.

Does drop shipping create physical nexus for a sales tax obligation?

For most drop shippers, the supplier's warehouse doesn't create nexus for you, only your own presence does. But drop shipping creates its own exemption certificate complications. Here's how the analysis works.

Does having a remote employee in another state create sales tax nexus?

Yes: a remote employee creates physical nexus in their home state on day one. Here's what it covers, what it doesn't, and what to do if you hired someone months ago without registering.

Does having a sales rep or affiliate in a state create sales tax nexus?

Sales representatives soliciting business in a state typically create physical nexus. Affiliate nexus laws vary by state. Economic nexus has superseded affiliate nexus as the main enforcement mechanism for ecommerce sellers, but physical nexus from sales reps remains live.

Does physical nexus still matter now that economic nexus exists?

Yes, physical nexus is fully in effect and often creates obligations before economic nexus would apply. Physical presence has no sales threshold; economic nexus does. FBA sellers frequently have physical nexus in states where they've never crossed the economic nexus threshold.

Does storing inventory in a 3PL warehouse create nexus?

Yes, inventory stored in a third-party fulfillment warehouse (3PL) creates physical nexus in that state, the same way FBA inventory does. Here's what it means and what to do.

How do I find out which states Amazon stores my FBA inventory in?

Pull the FBA Inventory Ledger report in Seller Central, map facility codes to states, compare against your registrations. Step-by-step guide with common gap states.

How do I handle sales tax nexus created by a 3PL I just started using?

Using a 3PL creates physical nexus immediately when your inventory arrives. Here's how to address it before inventory ships, and what to do if you're already in the gap.

How do I manage sales tax nexus when Amazon moves my FBA inventory to new states?

Amazon can move FBA inventory to new fulfillment centers without notice, creating immediate physical nexus in those states. Here's how to monitor your FBA footprint and respond when Amazon expands it.

What types of physical presence create sales tax nexus?

Physical nexus is created by offices, warehouses, inventory, employees, sales reps, trade shows, and delivery vehicles. Here's what counts in most states, and where the lines get complicated.

Why does inventory in a warehouse I don't own or control create nexus?

Ownership of the warehouse doesn't matter, ownership of the inventory does. If your goods are physically located in a state, you have property in that state, which constitutes physical presence under every state's nexus rules.