How To Sell On Amazon With A Wyoming LLC
Using A Wyoming LLC To Be An Amazon Associate
Amazon is the #1 internet retailer. Amazon’s success is in large part due to the fact that the site offers unmatched retailing opportunities to third-parties and individuals. Nearly anyone can sell products through Amazon, and anyone with a website or blog can be an Amazon affiliate, no matter where you live. This last part may come as a shock to anyone living in states where Amazon has banned affiliates. But it’s true, anyone can be an Amazon associate no matter where they live, if they use a Wyoming LLC.
Wyoming LLCs in Banned Amazon Associate States
To anyone with an online presence and mind for marketing, the Amazon affiliate program was a godsend. You don’t need product, a warehouse, employees—you only need a way to funnel customers to an Amazon product page, and when a customer buys something off Amazon, you get anywhere from 5% to 15% of the sale. Many people use their personal blogs or websites and simply have Amazon banners and ads running and visitors can simply click those ads. The Amazon affiliate program is amazing as long as you don’t live in a state where these sales are prohibited (see: Arkansas, Missouri, Maine, and Rhode Island). Because the aforementioned states saw affiliates located within their borders as mini-Amazon retailers, they wanted the sales tax from Amazon to fill their coffers. Amazon discontinued the program in those states.
However, you can continue living in your state of choice and gain access to the Amazon Associates program as a Wyoming LLC.
|Banned Amazon Associate States
|Arkansas, Missouri, Maine, and Rhode Island.
How a Wyoming LLC Helps Amazon Associate Sellers in Banned States
When you form an LLC in Wyoming, you are effectively creating an entity in Wyoming, that is governed by Wyoming laws. Typically, business owners have trouble if they form a business in a state other than the one in which they live for taxation purposes. But if you form an LLC with the sole function of being an Amazon affiliate, it creates an interesting opportunity not typically afforded to businesses.
How the Wyoming LLC Amazon Associate Works in Every State
The income of an Amazon Associate’s LLC is generated without a physical presence, without labor, without product. The LLC is a separate entity from the owner and since the business is online, so essentially is the LLC. It doesn’t exist in the physical world and is making money with intangibles. This is very different than say a construction company that physically does work in a state. The construction company would trigger what is called nexus (sufficient physical presence for tax purposes) in your home state. The LLC of a strictly online company. In a way, the Amazon Asscociate’s Wyoming LLC is ghost-like. And because it is not physically in the world, and any income gained comes passively and through intangibles, it allows someone living in a banned state to form an LLC in Wyoming and register it as an Amazon associate in Wyoming. Basically, the Amazon Associate Wyoming LLC allows you to operate your business under the laws of Wyoming, not your home state.
Why Amazon Affiliates and Sellers Form Wyoming LLCs
Since operating as an Amazon Associate offers the chance to form an LLC in any state, it’s only fair to ask the question: Why Wyoming?
- Asset Protection
As an Amazon Associate or seller, you’ll likely be the only member of your LLC, which mean it will be a single-member LLC. Wyoming is one of a very few states that specifically provides the same asset protections to single-member LLCs it does to multi-member LLCs. And Wyoming LLC statutes are strong. The sole remedy a creditor can seek against an LLC is a charging order, which is a court order allowing the creditor access to the LLC’s assets. Granting charging orders to creditors is not something that happens often in Wyoming.
- No Sales Tax
The entire reason many Amazon Associates are compelled to form LLCs in Wyoming is because their home state is seeking sales tax from Amazon. Wyoming has no sales tax, which completely nullifies the issue.
If you hire a registered agent service company like us to form your Wyoming LLC, you will not be required to list your personal information on the formation documents. This means that your personal information will stay private and be less vulnerable to corporate identity theft and reduce junk mail and solicitors scraping data off the state website. Your registered agent, however, is required to maintain accurate ownership information should the authorities or government agency need to know who owns the company.
- No Income Tax
Many business owners often wish they lived in Wyoming because there is no individual income tax. That means if your LLC is taxed as a pass-through entity (default tax status) or elects to be taxed as an S corp, the LLC profits pass directly to you, and you’ll have to pay no state income tax on those profits.
- Low Fees
The filing fee for a Wyoming LLC is $100. To maintain the LLC, you’ll need to file a $60 annual report and keep a Wyoming registered agent. We offer Wyoming registered agent service for $125 a year.
In less than 10 minutes, you can form a Wyoming LLC online and have it active instantly. Other states can take days, if not weeks to form your LLC.
Do Amazon affiliate Wyoming LLCs Need a Tax ID Number (EIN)?
Yes, on the Amazon Associate sign-up, if you are registering as an LLC, you’ll need to acquire an EIN. You can obtain an EIN through the IRS online or hire us to get it for you.
Wyoming LLCs For Non-US/International Amazon Sellers
If you do not live in the US, you have the advantage of choosing in which state you want to form your company. Wyoming LLCs offer every advantage you’re seeking. No sales tax, privacy, no individual state income tax, low maintenance fees, and the some of the strongest asset protection laws in the US. If you’re wondering which state is best for your LLC, look no further than Wyoming.
Why Non US Amazon Sellers Choose Wyoming
Wyoming isn’t as often discussed as Nevada and Delaware (both of which offer solid benefits). Chalk that up to marketing. Where Wyoming has advantages over both those states is in maintenance fees. With a Delaware LLC, you’ll have to pay your registered agent fee, plus an annual franchise tax of $300. In Nevada, an LLC must maintain a registered agent, pay $350 total each year to file an annual list of members and business license registration, and the asset protection statutes aren’t as strong as Wyoming’s or Delaware’s LLC statutes. If you’re planning on being in business for more than a year, it’ll pay to form your LLC in Wyoming.