01
The challenge
The brand filed only where it had employees. Amazon was storing inventory in dozens of states, wholesale partners shipped from their own warehouses, and the founder refused to file "everywhere" on a technicality. He wanted a clear view of which states carried real risk, what filing would cost and roughly what tax was at stake.
02
Our approach
- Tied the data first. Sales by ship-to state, the Amazon FBA ship-from report and the Form 1099-K were reconciled to the books within 0.5%.
- Separated two nexus tests. Sales tax economic nexus under Wayfair (largely handled by marketplace facilitators) was analyzed separately from income tax nexus, where P.L. 86-272 and inventory presence decide the answer.
- Ranked states by real exposure. Each state got an estimate of tax, filing cost and penalty risk, so the founder could decide state by state.
- Credit and law change. We scoped the research credit (Form 6765) and the 2025 restoration of immediate expensing for domestic research costs under new Section 174A as a separate quote.
- Year-round cadence. Safe harbor estimates in the fall and quarterly checkpoints were built into the fixed fee.
03
Results delivered
- A state-by-state exposure matrix the founder used to decide where to register and file.
- Federal and state S corporation returns and owner returns under one fixed annual fee.
- Research credit opportunity documented with its own scope and fee.
- A clean data pipeline with the client's outsourced bookkeeper for future years.
04
Frequently asked questions
In many states, yes. Inventory held in a state can create physical presence for income tax and sales tax, even when Amazon collects sales tax as the marketplace facilitator.
It shields sellers of tangible goods from state income tax when their only in-state activity is soliciting orders filled from outside the state. Inventory or employees in the state can remove that protection.
Yes. The credit is computed on Form 6765 and passes through to shareholders, subject to their own limitations.
Related services
Key terms See the glossary →
