How am I taxed as a non-US resident owning an LLC selling on AMZ?

My answer to How am I taxed as a non-US resident owning an LLC selling on AMZ?

Answer by Wray Rives:

As a general rule selling on Amazon is considered US sourced income and requires filing a US federal income tax return. In the case of one non-resident owning an LLC that is selling on Amazon, that means the owner files a form 1040NR with a Schedule C to report the income and expense of the business. If the LLC has more than one owner, then it will require filing a Form 1065 Partnership Return for the LLC and then each individual owner will file an individual non-resident US return.

You also have the option to elect to have the LLC taxed as a corporation, which in many cases will allow the individual owners to avoid filing a US return, but it means the LLC will file a separate US Corporate Tax Return, Form 1120. There are a number of pros and cons to this approach and I suggest you have a conversation with a US tax professional before making a corporate election to be sure you understand how that will impact your tax situation.

Depending on which state the LLC is registered in, you may also need to file a state income tax return and will most definitely need to file a state franchise tax return. In many cases the state franchise tax is coordinated with the state income tax or is simply an annual fee.

You will also probably have requirements to register and pay income tax, franchise tax and sales tax in several other states. FBA by Amazon creates an agency relationship with Amazon which gives the LLC nexus (Understanding nexus and sales taxes) in any other state where Amazon stores your inventory. That will require you to register the LLC with those impacted states and file tax returns with those states.

How am I taxed as a non-US resident owning an LLC selling on AMZ?