The Highlights
- Non-U.S. sellers need to comply with U.S. sales tax if they hit the economic/physical nexus thresholds in a given state.
- A physical nexus can be established by maintaining satellite offices, employees, or warehousing in a state.
- An economic nexus is typically triggered through $100,000 in annual sales or 200 transactions, but this can vary based on the state.
- Non-U.S. sellers need to watch for emerging trends like tightening nexus rules and rate adjustments in 2026.
If you’re a non-U.S. seller considering expanding your business operation, particularly through ecommerce, few markets in the world can be as lucrative as the U.S. Despite the obvious upsides, learning how to determine sales tax as a non-U.S. seller can feel like navigating a star-spangled maze, to say the least.
The good news?
It doesn’t have to be that hard with the right expert assistance. Find out what you need to know about sales tax as a non-U.S. seller with this RJM Tax Exemption blog.
Sales Tax Nexus for Non-U.S. Sellers: The Basics
The very first question you should ask yourself is whether or not you have a sales tax nexus in a U.S. state. A nexus, in other words, is the connection between a business such as yours and a state that gives you the right to collect and remit sales tax.
Prior to 2018, a nexus could usually only be established if a business had a physical presence in a state. However, the 2018 South Dakota v. Mayfair ruling established a precedent that states can impose a nexus based purely on economic activity, as well.
Physical v. Economic Nexus for Foreign Sellers
What does all that mean for non-U.S. sellers’ sales tax obligations? If you’re a foreign seller, your online goods (such as digital downloads for eBooks) could create a nexus even if you’ve never visited the States. It’s also worth pointing out the difference between a physical and an economic nexus here:
- Physical Nexus: Figuring out how to determine sales tax as a non-U.S. seller with a physical presence is a lot easier. Most states treat inventory storage and having employees in a state as automatic physical nexus triggers.
- Economic Nexus: An economic nexus kicks in typically when your business exceeds a certain threshold of annual transactions or a dollar amount.
State-by-State Differences
Note that economic nexus thresholds for sales tax vary state-by-state. If you’re looking into sales tax for non-U.S. sellers, you should know where exactly your customers are and what the thresholds are for that state.
For example, California’s economic nexus threshold is $500,000 in sales over the current or previous calendar year, including sales made through marketplace facilitators like Amazon.
On the other hand, Arkansas sets its threshold at $100,000 in annual sales or 200 transactions. Here, sales made through marketplace facilitators are not included in counting the total number of transactions.
Who Pays: What You Need To Know About Sales Tax as a Non-U.S. Seller
Let’s add up everything we now know about sales tax for non-U.S. sellers into an easy-to-follow table so you can act fast and start expanding your business the right way. Once you know whether you have a nexus, you can work on determining sales tax as a non-U.S. seller with a top-rated sales tax expert.
| Scenario | Collect/Remit? | Why? |
| Your annual sales in a state exceed the economic nexus threshold. (Typically $100,000 and/or 200 transactions) | Yes | Economic nexus triggered purely by sales volume. |
| You store inventory in a U.S. warehouse (such as through Amazon FBA) | Yes | Physical nexus. |
| You sell exclusively through platforms like Amazon/Etsy | Depends! | Facilitators will usually collect and remit tax for you. However, you might have a physical nexus due to inventory storage. |
| You have affiliates or employees (like a satellite office) in a state. | Yes | Physical nexus. |
Sales Tax for Non-U.S. Sellers: What’s Changing in 2026?
If you’ve determined you have a nexus, you’ll need to know about upcoming changes so you can be prepared for everything, whether you’re registering for sales tax or filing it.
Local Rate Tweaks
More than 20 states adjusted their local sales tax rates effective January 1, 2026, including Alabama, California, Illinois, and Kansas. These are mostly minor adjustments based on local economic conditions and shouldn’t affect your nexus considerations too much.
Tightened Nexus Rules
This emerging trend does have a major impact on how you determine sales tax as a non-U.S. seller. Effective January 1, 2026, Illinois joined a steadily growing group of states that have eliminated the 200 transaction threshold from their economic nexus considerations.
If you’re determining sales tax as a non-U.S. seller, this change might impact you if your business deals in high-frequency, but low-volume transactions. For example, a business that used to do 300 annual sales in Illinois but earned less than $100,000 would now be eligible for deregistration.
Streamline Your Tax Needs Today
What you need to know about sales tax as a non-U.S. seller is that it can easily be streamlined with the right experts. RJM Tax Exemption is a leading tax consultancy that works with businesses like yours to make sales tax filing hassle-free and unlock new growth opportunities. Get a free consultation today to find out how we can help!
Frequently Asked Questions
Do non-U.S. sellers collect sales tax?
Yes, if they’ve established either an economic or physical nexus in the state. The threshold for economic nexuses can vary, but they’re usually $100,000 in annual sales or 200 transactions.
Are digital products taxable for non-U.S. sellers?
Generally yes. States like New York will tax digital products like computer software as tangible property. However, some states partially exempt digital products as well.
Can I claim exemptions for B2B sales/international sales as a non-U.S. seller?
Yes. Some states will exempt certain categories from their sales tax considerations, even for non-U.S. sellers. You should be careful in how you determine sales tax exemptions as a non-U.S. seller, as you might still establish a physical nexus through warehousing.
