Choosing the right state to register your Amazon business LLC is one of the most overlooked but financially impactful – decisions new and scaling sellers make. While many sellers default to forming an LLC in their home state, others are drawn to popular options like Wyoming or Delaware without fully understanding the long-term compliance, tax, and operational consequences.
This guide cuts through the noise. Drawing on real Amazon seller use cases, state-level business regulations, and marketplace compliance realities, we break down the best states to register an Amazon LLC, when each option makes sense, and costly mistakes to avoid.
Whether you’re launching your first private-label product or scaling a multi-brand FBA operation, this article will help you make a legally sound, tax-efficient decision you won’t regret later.
Why Your LLC State Matters for Amazon Sellers
Your LLC’s state of formation affects far more than just a filing fee. It can influence:
- State income and franchise taxes
- Annual compliance and reporting costs
- Sales tax nexus exposure
- Banking and payment processor approvals
- Amazon account verification and brand trust
Amazon doesn’t require sellers to register in a specific state – but it does require consistency across your legal entity, tax identity, bank account, and Seller Central profile. Choosing the wrong state can mean duplicate filings, unnecessary taxes, or even account verification delays.
The Home State Rule: When It’s the Best Choice
For most Amazon sellers, registering your LLC in the state where you live and operate is the safest and most compliant option.
Why your home state often wins
If you:
- Manage the business from your residence
- Store inventory at home (even temporarily)
- Operate a warehouse, office, or staff locally
… you are legally considered to be “doing business” in that state.
Registering elsewhere would still require you to file as a foreign LLC in your home state – resulting in:
- Two sets of annual fees
- Additional registered agent costs
- More complex compliance
Bottom line: If your business has a physical or operational presence in your state, forming your LLC there is usually the most cost-effective and legally sound option.
Best States to Register an Amazon LLC (When You Don’t Live There)
If you operate a location-independent Amazon business (no office, no employees, no inventory at home), certain states offer structural advantages.
Below are the most seller-friendly states – and when they actually make sense.
Wyoming: Best Overall for Online-Only Amazon Sellers
Why Wyoming stands out
Wyoming has become the top choice for many U.S. Amazon sellers who run fully remote businesses.
Key advantages
- No state income tax
- No corporate income tax
- Low annual report fee (currently among the lowest in the U.S.)
- Strong privacy protections for LLC owners
- Simple compliance and maintenance
Best for:
- Amazon FBA sellers with inventory stored only in Amazon warehouses
- Digital-first eCommerce brands
- Solo founders and small teams without a home-state nexus
Watch out:
If you later create physical presence in another state (office, employees, or personal relocation), you’ll likely need to register as a foreign LLC there.
Delaware: Best for Scalable or Investment-Backed Brands
Delaware is often misunderstood. It’s not “better” for everyone – but it is powerful for the right seller.
Why sellers choose Delaware
- Highly developed business court system
- Predictable legal precedents
- Familiarity for investors and acquirers
Best for:
- Amazon brands planning to raise venture capital
- Sellers preparing for acquisition or multi-entity structures
- Larger operations with legal counsel
Downsides for small sellers
- Annual franchise tax (even with no income)
- Higher ongoing compliance costs
- Often unnecessary for early-stage Amazon sellers
Florida: Best Low-Tax Option for U.S. Residents
Florida is a strong choice for sellers who live there or plan to.
Benefits
- No personal state income tax
- Competitive LLC filing and renewal fees
- Business-friendly regulatory environment
Best for:
- Amazon sellers residing in Florida
- Lifestyle entrepreneurs and growing FBA brands
Important note
Florida is not ideal if you don’t live or operate there. Out-of-state sellers gain little advantage compared to Wyoming.
Texas: Strong for Growing Amazon Operations
Texas offers a balance of scale, logistics, and business friendliness.
Advantages
- No personal income tax
- Strong logistics infrastructure (key for FBM sellers)
- Large talent pool for operations and customer service
Considerations
Texas has a franchise tax threshold, which most small Amazon sellers won’t hit – but scaling brands should plan ahead.
Nevada: Less Attractive Than It Appears
Nevada is often marketed alongside Wyoming – but it’s usually inferior for Amazon sellers.
Why Nevada often disappoints
- Higher annual fees
- Business license requirements
- No meaningful advantage over Wyoming
In practice: Wyoming offers nearly all the same benefits at a lower cost and with less bureaucracy.
Sales Tax Nexus: The Amazon-Specific Factor Many Sellers Miss
Thanks to marketplace facilitator laws, Amazon collects and remits sales tax on your behalf in most states. However, your LLC’s state can still affect:
- State income or gross receipts taxes
- Economic nexus thresholds for off-Amazon sales
- Audit exposure as your brand grows
Your formation state should be chosen with your long-term sales channels in mind – not just Amazon.
Banking, EINs, and Amazon Verification
Amazon Seller Central, U.S. banks, and payment processors expect:
- Matching LLC name, EIN, and formation state
- A valid U.S. business address or registered agent
- Clear ownership records
States like Wyoming and Delaware are widely accepted – but mistakes in documentation are a common cause of Amazon verification delays.
Common Mistakes Amazon Sellers Make
- Forming an LLC in a popular state without understanding nexus rules
- Paying double fees by registering in the wrong state
- Choosing Delaware too early without investor needs
- Ignoring long-term compliance and exit strategy
- Assuming Amazon FBA eliminates all state obligations
So, What’s the Best State for You?
Quick decision framework:
- You live and operate in one state -> Register in your home state
- Fully remote, Amazon-only business -> Wyoming
- VC-backed or acquisition-focused brand -> Delaware
- Florida or Texas resident -> Your home state often wins
There is no universal best state only the best state for your business model.
Final Thoughts from SwanseaAirport
At SwanseaAirport, we’ve helped thousands of sellers navigate Amazon compliance, brand growth, and operational setup. LLC formation is not just a legal checkbox – it’s a strategic foundation that affects taxes, trust, and scalability.
If you treat your Amazon business like a real company from day one, choosing the right state is a decision you’ll only have to make once – and benefit from for years.
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