Do Non-US Businesses Have to Collect Sales Tax?
Yes, non-US businesses may have to collect US sales tax if they create nexus in a state through economic activity, inventory, or other business operations. Being located outside the US does not automatically exempt a business from US sales tax obligations.
This applies to:
- UK businesses
- European ecommerce brands
- Canadian sellers
- Australian companies
- International Amazon and Shopify sellers
The key point is US sales tax obligations are based on where your customers and business activity are, not where your company is located.
Non-US businesses may need to register and collect US sales tax if they exceed economic nexus thresholds or create physical nexus in US states.
Even businesses with:
- No US office
- No US employees
- No US company entity
Can still owe sales tax.
Why Many Non-US Businesses Misunderstand US Sales Tax
Many international businesses assume US sales tax only applies to companies physically based in America. But this is incorrect.
Following the 2018 Wayfair decision:
- States can impose sales tax obligations on remote sellers
- Physical presence is no longer required in many cases
This means:
- International ecommerce businesses selling into the US may still have obligations.
- How US Sales Tax Applies to Non-US Businesses
US sales tax applies when a foreign business creates a nexus in a state.
Nexus is the legal connection that creates a sales tax obligation.
Types of Nexus for Non-US Businesses
1. Economic Nexus
Economic nexus is the most common trigger for foreign sellers. This occurs when sales into a state exceed a threshold.
Most states use:
- $100,000 in revenue
- Some states use $500,000
- Or 200 transactions
These thresholds apply regardless of where your business is based.
2. Physical Nexus
Non-US businesses can also create physical nexus in the US.
Common triggers include:
- Inventory stored in US warehouses
- Amazon FBA inventory
- Third-party fulfilment providers (3PLs)
This is extremely common for ecommerce sellers using Amazon or US fulfilment networks.
Economic Nexus Thresholds (2026 Overview)
| State | Revenue Threshold | Transaction Threshold |
| California | $500,000 | None |
| Texas | $500,000 | None |
| Florida | $100,000 | None |
| New York | $500,000 | 100 transactions |
If a non-US business exceeds these thresholds, sales tax registration may be required.
Does Selling Through Amazon or Shopify Change Things?
No, using ecommerce platforms does not automatically remove your sales tax obligations.
Amazon Sellers
Amazon may:
- Collect and remit marketplace sales tax in many states
However:
- Your sales may still count toward nexus thresholds
- Inventory storage may create physical nexus
Foreign Amazon sellers often still have compliance obligations.
Shopify Sellers
Shopify:
- Calculates sales tax
But:
- Does not determine where you must register
- Does not handle compliance for you
Non-US Shopify sellers must still monitor their US sales tax obligations carefully.
Do Non-US Businesses Need a US Company to Register?
No, many states allow foreign businesses to register directly for sales tax without forming a US company.
However:
- Registration requirements vary by state
- Additional documentation may be required
What Happens If a Foreign Business Doesn’t Comply?
If a non-US business fails to comply with US sales tax rules, states may still assess liabilities.
Possible consequences include:
- Back taxes
- Penalties
- Interest
- Increased audit risk
As states improve data sharing and ecommerce monitoring international sellers are becoming easier to identify.
How Non-US Businesses Can Stay Compliant
The best approach is proactive sales tax monitoring and registration management.
Key Steps
1. Monitor US Sales by State
Track revenue into each state.
2. Review Nexus Thresholds
Check whether thresholds have been exceeded.
3. Identify Inventory Locations
US inventory can create immediate nexus.
4. Register When Required
Apply for sales tax permits in relevant states.
5. File and Remit Sales Tax
Maintain ongoing compliance after registration.
For broader guidance, see our article on how to determine if you owe sales tax in multiple states.
Worked Examples
Example 1: UK Shopify Seller
- Selling products into Florida
- Exceeds $100,000 in sales
Result:
- Economic nexus created
- Florida registration required
Example 2: European Amazon Seller
- Inventory stored in Texas via Amazon FBA
Result:
- Physical nexus created in Texas
- Sales tax obligations triggered
Example 3: Australian Ecommerce Brand
- Selling nationwide into the US
- Multiple state thresholds exceeded
Result:
- Multi-state sales tax compliance required
Common Mistakes Non-US Businesses Make
- Assuming overseas businesses are exempt
- Ignoring economic nexus thresholds
- Not tracking US inventory locations
- Assuming Amazon handles everything
- Delaying registration after thresholds are exceeded
These mistakes can lead to significant historical exposure.
FAQs
Do non-US businesses need to collect US sales tax?
Yes, if they create nexus in a state.
Can a foreign company register for US sales tax?
Yes, many states allow direct foreign registration.
Do Amazon marketplace rules remove obligations?
Not always, nexus and filing obligations may still exist.
Can inventory in the US create nexus?
Yes, physical inventory can create immediate obligations.
What happens if I ignore US sales tax obligations?
You may face back taxes, penalties, and audit exposure.
Final Thoughts
US sales tax rules apply to many businesses worldwide, not just companies physically based in the US.
The key takeaway is if you sell into the US, your location does not determine whether you owe sales tax,your activity does.
As international ecommerce continues to grow, foreign businesses must:
- Monitor US sales carefully
- Understand nexus rules
- Stay compliant across states
If you’re a non-US business selling into America and unsure about your sales tax obligations, RJM Tax Exemption can help you assess nexus, manage registration, and stay compliant across multiple states.
