One of the best things about our Sales Tax for eCommerce Sellers Facebook group is that we get a cross-section of online sellers. That includes some sellers who aren’t based in the United States at all.
Inspired by our international members, we thought we would take a look at the various scenarios that they face, and try to determine when and how international sellers have to deal with sales tax in the United States.
For the purposes of this article, we are not going to go into customs duties, import taxes or any of the other many taxes that an international seller might face doing business in the United States.
You are an international seller, with no physical presence in the United States
Congratulations! While you may have to deal with customs and import taxes, as of this writing, you do not have to collect or remit sales tax. Cheers!
You are an international seller, who warehouses items in the U.S., such as in an FBA Warehouse
Even though you may live outside the United States, if you sell on FBA or have established any other type of sales tax nexus in the United States (such as an employee, office, a satellite branch of your business, or a warehouse where you store inventory), then you must comply by the sales tax laws of the state where you have nexus.
You may even still be required to file sales tax returns in the states of Washington and Pennsylvania, where Amazon currently handles sales tax collection. You can read more about sales tax developments in Washington here, and more about sales tax developments in Pennsylvania here.
You can find out more about sales tax laws in various U.S. states on TaxJar.com.
You are a non-U.S. Citizen, but you live in and have “nexus” in the United States
As with the example above, you must comply with state sales tax laws, no matter your legal status. We have one customer who lives in the U.S. but his citizenship status is “non-resident alien.” That type of legal status, though, which is a person’s legal standing in the country, shouldn’t be confused with “nexus.”
Even though our customer isn’t a citizen of the United States, he runs his business from and stores inventory in California, which means that he has sales tax nexus in that state and must collect and remit sales tax.
If U.S. “Internet Sales Tax” passes…
In the past we have often talked about how the Marketplace Fairness Act, the Remote Transaction Parity Act or the Sales Tax Simplification Act would affect U.S.-based sellers. But if you are an online seller based in a non-U.S. country, an “internet sales tax” law could change the rules for you, too. Keep following the TaxJar blog for updates on internet sales tax.
Sales Tax Resources for International Sellers
So you think you may need to get sales tax compliant in the U.S. We highly recommend that international sellers contact an expert. Depending on what part of the world you are from and what your business activities in the U.S. entail, you may have complex tax requirements.
We recommend these CPA firms for international sellers:
Are you an internationally-based online seller who sells in the U.S.? Do you deal with sales tax nexus? We’d love to hear your story!