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I don't mind paying taxes on my earnings from the affiliate program. It's not like the government would expect me to pay taxes on the cost of the goods sold. It's the amount made from the affiliate program.

Amazon is a significant source of income for me in California, and I was thinking of creating a California LLC this year anyway to shield from lawsuits. I'm now going to seriously think about doing it in Delaware instead.

Any advice?

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If you need specific advice about tax liability or incorporation decisions, you may want to talk to an attorney.

Incorporating in Delaware does not necessarily make a corporation a Delaware resident only. If a corporation operates in California, it is probably subject to California taxes. In general, a corporation can be a resident of both the state of incorporation and the state of its principal place of business.

For sales/use tax, owning property in California or having regular employees in California may be enough.

Well the only one thing I do know that's a huge pain about having a California LLC is the $800 minimum tax. It sounds like you might be making enough that you owe more than that though.

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