Short answer: Wyoming is the best state to form an LLC for most Amazon FBA sellers who do not run the business from a physical location in one state: $100 to form, a $60 minimum annual report, no state income tax and owner names kept off the public record. If you live and work in one US state, form the LLC there, because it has to register in that state anyway. Non-US sellers form in Wyoming or New Mexico. Your formation state does not change sales tax: Amazon collects and remits sales tax on marketplace sales in every state that has one.
Amazon has potentially more than 310 million customers worldwide. Therefore, it’s the biggest e-commerce platform with the best earning potential. However, to get the most out of the platforms, you’ll need to form an LLC.
The Advantages Of LLC Formation For Amazon Business
Let’s start by figuring out why forming an LLC for your Amazon business is a good idea in the first place. This will help you understand why taking the step is worth your time and resources.
- Liability protection: without an LLC, disgruntled Amazon customers can sue you directly for damages. However, with an LLC, there’s a layer of protection since it’s the LLC that gets sued and is liable for damages – not your personal bank account.
- Money management: you can receive all business payments to the LLC and manage the funds there. This is helpful when you have business partners, and you want to promote transparency with your partnership.
- Fast and cheap: forming an LLC for your Amazon business is inexpensive and fast. In fact, you only need to allocate a small portion of your start-up funds. Also, you can complete the registration process in just one sitting.
- Bank loan: you increase the chances of a successful bank loan approval when you form an LLC for the Amazon FBA business. This gives you more funds to start the business and order a bigger batch of products.
- More trust: suppliers and customers pay attention to the business they are dealing with. Some trust businesses more when they have taken the step of registering an LLC. This shows they are serious about their operation.
Best States to Form an LLC for Amazon FBA
| Option | Formation fee | Yearly state cost | State income tax | Owner names private | Best for |
|---|---|---|---|---|---|
| Wyoming | $100 | $60 minimum annual report | None | Yes | Non-US sellers and sellers with no US home state |
| New Mexico | $50 | None | Yes, on residents and New Mexico income | Yes | Lowest yearly cost |
| Your home state | Set by your state | Set by your state | Set by your state | Depends on the state | US sellers who live and work in one state |
| Delaware | $110 | $400 annual LLC tax | Yes, on residents and Delaware income | Yes | Sellers planning to raise investment |
State fees verified in September 2026. See every state in our LLC cost by state table.
Wyoming
Wyoming is the best fit for non-US sellers and for sellers who travel or work with no fixed US base. It costs $100 to form and the greater of $60 or $0.0002 per dollar of Wyoming assets each year, with no state income tax. The public record shows your registered agent, not your name. See how to start an LLC in Wyoming.
New Mexico
New Mexico costs $50 to form and has no annual report or annual fee, so a registered agent is your only yearly cost. Owner names stay off the public record. New Mexico taxes the income of its residents and income earned in the state, which does not apply to a seller who lives and works elsewhere. See how to start an LLC in New Mexico.
Your Home State
If you run your Amazon business from a home or office in one US state, the LLC is doing business in that state. An LLC formed in Wyoming would still have to register there as a foreign LLC and pay that state’s fees, and you would pay your home state’s income tax either way. Forming in your home state avoids paying two states. Read home state vs out-of-state LLC.
What About Nevada and Delaware?
Neither state has a program for Amazon sellers. Nevada has no state income tax, the same as Wyoming, but it costs $425 to form and $350 a year, and its annual list names managers publicly. Delaware charges a $400 annual LLC tax and is worth it only for a seller planning to bring in investors.
Sales Tax and Inventory in Amazon Warehouses
Your formation state does not decide where you owe sales tax. Every state with a sales tax requires marketplaces to collect and remit sales tax on marketplace sales, so Amazon handles sales tax on your Amazon orders.
Inventory in Amazon fulfillment centers is different. Stored inventory counts as physical presence in the states where Amazon keeps it, and states with gross receipts or franchise taxes, such as Washington and Texas, can require a registration or a filing based on that presence. Review your inventory locations in Seller Central with your accountant once a year.
What Amazon Asks for When You Register Your LLC
- The LLC’s legal name and business address, matching your state filing.
- The LLC’s EIN from the IRS.
- A government-issued ID for the person registering the account.
- A bank account that can receive payouts and a chargeable credit card.
Non-US sellers without an SSN can get an EIN with our EIN application service.
How to Form an LLC for Your Amazon FBA Business
- Pick the state using the table above.
- Appoint a registered agent in that state. BusinessAnywhere’s registered agent service covers all 50 states for $147 a year, free the first year when you form with us.
- File the formation document and pay the state fee.
- Sign an operating agreement.
- Get an EIN and open a business bank account.
- Register or update your Amazon seller account with the LLC’s details.
BusinessAnywhere handles business registration in all 50 states for $0 plus the state filing fee.
FAQs
What is the best state to form an LLC for Amazon FBA?
Your home state if you live and work in one US state. Wyoming if you are a non-US seller or have no US home state: $100 to form, a $60 minimum annual report, no state income tax and private ownership.
Do I need an LLC to sell on Amazon?
No. Amazon accepts individual sellers. An LLC separates business debts and claims from your personal assets and lets you open a business bank account in the company’s name.
Does my LLC’s state change the sales tax I owe on Amazon?
No. Amazon collects and remits sales tax on marketplace orders in every state that has a sales tax, wherever your LLC is formed.
Can a non-US resident form an LLC for Amazon FBA?
Yes. Non-US residents form in Wyoming or New Mexico, get an EIN and register the LLC as the Amazon seller. A foreign-owned single-member LLC also files IRS Form 5472 each year it has transactions with its owner.
