Navigating Amazon’s tax interview for non-residents with U.S. LLC can be complicated, particularly regarding tax compliance. Many non-residents choose to operate as individuals or as entities from their home country and will complete the W-8BEN or W-8BEN-E form during the Amazon tax interview.
However, forming a U.S. single-member LLC often becomes necessary, especially in dropshipping scenarios where U.S. suppliers require dealing with U.S. companies (tip: don’t form your LLC in Wyoming when dropshipping). It might also be essential for securing U.S. insurance coverage when options are scarce in the non-resident’s country. The necessity for insurance compliance increased after September 2021, particularly for sellers recording over $10,000 a month in sales.
It’s crucial to understand that U.S. suppliers may be indifferent about your Amazon sales, the proper completion of your Amazon tax interview, or even whether you’ve mistakenly committed tax fraud. However, insurance underwriters need to be more indifferent regarding claim filing.
Imagine this: Your insurance adjuster denies your claim because your U.S. LLC wasn’t genuinely managing your Amazon business or due to an ‘inadvertent trick’ played on the Amazon tax interview. The repercussions can range from mildly inconvenient to severe, depending on the size of your claim. A $5K claim on a $1M policy might not raise eyebrows, but a claim worth $800K is likely to trigger intensive scrutiny from insurance company attorneys.
Suppose you’re an Amazon seller ticking the insurance box to get verified and are not concerned about coverage because you’re selling low-risk items like rubber kitchen spatulas. In that case, the above doesn’t apply. However, the looming risk of an Amazon suspension should pique your interest, so please keep reading.
Establishing a compliant U.S. LLC and meticulously navigating the Amazon tax interview are not just administrative formalities. They are protective measures crucial to the value and longevity of your Amazon business and brand. Make no mistake – skirting these requirements could lead to a pain you didn’t anticipate, undermining the success you’ve worked so hard for.
Amazon Tax Interview Questions