US Sales Tax 

Five states do not have state wide sales taxes: Alaska, Delaware, Montana, New Hampshire, and Oregon. However, Alaska allows localities to charge local sales taxes.

How much you sell of it?

To protect small businesses from being overtaxed (or from crippling under sheer tax compliance). Most US tax laws include a tax registration threshold. When your local sales pass the threshold amount, your business is required to register for taxes.

A common tax registration threshold is 200 transactions or $100,000 in sales in the previous or current calendar year (in that particular state). If your business’ annual sales remain under the threshold amount, you do not have what’s called economic nexus, and you don’t need to worry about sales tax.

If you do surpass the threshold amount, then you better get moving on tax compliance in that state!

What do you need before US Sales Tax registration?

Once you know you have nexus in a state, here are the general next steps and best practices to ensure your business is on the ball.

  • Get a Federal Tax ID, Employer Identification Number (EIN), if necessary. You probably already have one of these, but just in case. If you are running a business in the US. You likely need an EIN. This is how the Internal Revenue Service tracks your business’ tax activities, such as paying business income tax.
  1. If you are a US taxpayer, you can apply online and receive your EIN immediately.
  2. If you are an international applicant, the IRS website gives these instructions. For full information about the EIN, check out the IRS site for Employer ID Numbers.
  • Register in that state. Once you’ve registered, you’re required to comply with all parts of the tax law. To register, check the state’s tax agency website. Many states offer an online application service, some easier to use than others. (The state of New York even offers it in seven languages!)
  1. You need a substantial amount of information to register for a seller’s permit, including your EIN plus the personal information of any partner or other individual who’s responsible for the business.
  2. Some states will issue you a state tax ID, while others will simply use your EIN.
  3. Usually you’ll either receive your permit instantly, or within 10 business days. If you register via post mail, it may take 2-4 weeks.

How can Non-U.S. Sellers Become Sales Tax Compliant in the U.S.?

To be honest, becoming compliant with VAT tax USA states is quite complex for international sellers. You will most likely want to work with an accounting firm, who specialises in helping non-U.S. sellers get compliant. Before you get to that point here are a few actions you can take:

Determine where you have nexus

Use the ground rules posted above to determine the states where you have nexus. If you sell via Amazon’s FBA program you can view your Inventory Event Detail report to see which states have Amazon warehouses that store your inventory.

 

Register for a sales tax permit in your nexus state(s) 

Here’s where most international sellers hit their first roadblock USA tax. Most states require that you have an Individual Taxpayer Identification Number (ITIN) to register for a permit. In addition, many states have online systems that cannot handle sales tax permit applications from outside the U.S. and you may be required to call the state to register or fill out a paper sales tax form and mail it to the state.

Open a U.S. bank account

Most states only accept sales tax payments using Automated Clearing House (ACH) transfers from a U.S. bank, which means you may be required to open a U.S. bank account. Opening a U.S. bank account will normally require either you or a business representative to be physically present when opening the account.

Fortunately there are multiple sales tax experts who have years of experience in helping international online sellers get sales tax compliant in the U.S.

Register in the Multiple States with One Application

Avoid filling out a separate online or PDF application for each state. Our simple master application will collect all the information we need to get you registered in every state.

Complete Registration Process

Our team will review your sales tax application for accuracies (to minimize filing frequency and past return issues), get you registered with the state (either online or by mail is required), and follow up with the state to obtain your license. All applications will be processed within 3-5 business days.

Tax Account Completed

Sales tax calculator will complete which may involve a PIN, code, or permit number from the state. You will be ready to file your sales tax returns with one of our software partners or e-commerce accountants.