Guides » Financial & Taxes

US Sales Tax for European Online Sellers: The Essential Guide

By Emma Scotton

The USA has 12,000 taxing jurisdictions for sales tax, each with their own rates and rules. Here's what UK/EU businesses with US online sales need to know.

US Sales Tax for European Online Sellers: The Essential Guide

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Jolly Jack

I’m a little confused about this article and would appreciate a little clarification. We are a UK VAT registered business. My understanding is that all sales outside of the EU are outside the scope of tax for my UK business and therefore we would not need to pay any taxes on any sales outside the EU, including sales in the USA. What are peoples opinions??

Sergiy Kyrylkov

Replying to Jolly Jack

No VAT and sales tax if you ship to the USA from the UK.

Emma Scotton

Replying to Jolly Jack

Thanks for your comment. You’re absolutely right, ordinarily UK VAT registered businesses do not need to be concerned with tax on sales outside of the EU. However, this very much depends on how your sales are processed and in some circumstances you will be required to do so. When selling to US based consumers you will need to consider whether or not your UK business has ‘nexus’ in any of the US states. ‘Nexus’ can be created in a number of scenarios. For example, if you’re storing your goods in a warehouse in the US, or using a drop-shipper based… Read more »

Richard Meldner

This article really puts more fear into smaller sellers than the realities of US tax laws. Most of the sales tax laws and cross-border situations listed only apply to large volume companies that have to establish business entities in a US state. Most of these so called “Amazon” laws are based on the fact that Amazon was skirting various sales tax rules by setting up each warehouse as a separate business entity. Effectively they would sell products from one state to another claiming they were not subject of the sales tax laws as the warehouse that sent the product was… Read more »

Sergiy Kyrylkov

Replying to Richard Meldner

Hi Richard, You’re the first voice of reason on the matter I have ever read. Thank you for sharing your point of view.

William Love

With the recent ruling by the US Supreme Court will businesses outside of the USA be required to collect, report and pay sales tax?

Donald Trump

Replying to William Love

Based on my understanding, the “economic nexus” is what requires in some states submit sales tax over 100k sales in that state. However, seems at least one state requires to submit zero-tax return / apply for license regardless. How much would that be practical for the US to enforce it if you have your own website (and don’t use Ebay or other marketplace) is questionable.

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