E-Commerce LLC: Which Tax Forms Do You Need?

Running an e-commerce business through a US LLC comes with specific tax considerations. Whether you're selling on Amazon, Shopify, or your own store, here's what you need to file.

The basics (same as any LLC)

• •EIN: Form SS-4
• •FinCEN BOI: Beneficial ownership report
• •Annual return: Form 1120 or 1065 (depending on structure)
• •Form 5472: If foreign-owned

E-commerce specific considerations

Sales tax

This is separate from federal income tax. If you sell physical products, you likely owe sales tax in states where you have "nexus" (a tax presence). Nexus is created by:

• •Having inventory in a state (including Amazon FBA warehouses)
• •Having employees in a state
• •Exceeding a state's economic nexus threshold (typically $100K in sales or 200 transactions)

Sales tax is collected from customers and remitted to each state. This is NOT reported on your federal income tax return — it's a completely separate obligation.

Cost of Goods Sold (COGS)

On Form 1120, Line 2 asks for "Cost of goods sold." For e-commerce businesses, this includes:

• •Product purchase costs
• •Shipping costs to receive inventory
• •Customs and duties (for imported goods)
• •Warehousing costs directly related to inventory

1099-K from payment processors

Stripe, PayPal, Amazon, and Shopify will issue Form 1099-K reporting your gross sales. The revenue on your Form 1120 should match (or be reconcilable with) the amounts on your 1099-Ks.

Amazon FBA specific

If you use Amazon FBA:

• •Amazon collects and remits sales tax in many states (Marketplace Facilitator laws)
• •Amazon issues 1099-K for your gross sales
• •Amazon fees (FBA fees, referral fees) are deductible business expenses
• •Inventory held in Amazon warehouses creates nexus in those states

Import duties

If you import products for resale, customs duties are part of your COGS. Keep customs documentation for your records.

Common deductions for e-commerce

• •Product costs and shipping
• •Amazon/Shopify/platform fees
• •Packaging materials
• •Photography and listing creation
• •Advertising (PPC, social media)
• •Software tools (inventory management, analytics)
• •Returns and refunds

Multi-state filing

If you have sales tax nexus in multiple states, you'll need to register, collect, file, and remit in each state. Consider using services like TaxJar or Avalara to automate this.