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GuidesSelling to the U.S.?
Selling to the U.S.?
You might owe tax in more states than you think.
Even without a physical presence, ecommerce brands may be liable for U.S. state sales tax when selling physical goods. Learn where your obligations begin—and how to stay compliant without the headache.
Are You Liable for US Sales Tax? A State-by-State Guide for Ecommerce Businesses.
Economic nexus laws allow U.S. states to require tax registration from any seller once certain sales thresholds are met, regardless of whether they are a U.S. based business.
For ecommerce brands, these laws may trigger sales tax obligations in dozens of states, even if you're selling from abroad via your own website or Shopify.
This guide focuses on physical goods sold cross-border into the U.S.
New Tariffs and Fulfillment
New tariffs and fulfillment strategies (e.g. using 3PLs) are changing tax exposure.
U.S. Warehouse Impact
Importing to a U.S. warehouse (instead of shipping directly to consumers) reduces duties, but may create sales tax complexities.
State-by-State Management
You must be registered in every state where you exceed nexus. Each state has its own registration process, requirements, and legal barriers.
Tax Risk
Tax risk = back taxes + interest + steep penalties.
State-by-state tax thresholds
Start here: The four most populated U.S. states, representing nearly 40% of the US population.
Want to see more states?
Some states like Alaska, Delaware, Montana, New Hampshire, and Oregon do not impose a statewide sales tax, but local jurisdictions may still require collection.
Comply with confidence, across all 50 states
Reach handles and automates U.S. sales tax registration, filing, and remittance as your Merchant of Record.
Rooftop Precision
Calculate tax rates with rooftop precision
Inclusive & Exclusive Pricing
Handle both inclusive & exclusive pricing
Regulatory Compliance
Ensure compliance with constantly changing international regulations
Tax Filing & Remittance
Handle all tax filings and remittance in all required markets
360° Audit Protection
If an error occurs during an audit, we take full responsibility and cover the costs
Tax inclusive pricing
Customer in France
Subtotal€140.00
ShippingFree
Total€140.00
Including €29.00 in taxes
Tax exclusive pricing
Customer in USA
Subtotal$145.00
Shipping$9.00
Estimated taxes$12.70
Total$274.70
Inclusive vs Exclusive Tax
Charging tax correctly is only half the equation. How you display it by region can impact your conversion rate and margins.
In many countries like the UK, it's customary to include tax in the total price a price a shopper sees (inclusive pricing). But in the US, tax is added at checkout (exclusive pricing). If you're using inclusive pricing in the US, you may be reducing your margins without realizing it or be out of compliance with local tax laws.
As your Merchant of Record, we automatically adapt your pricing display for each market, ensuring compliance and enhancing customer satisfaction by aligning with local norms.
Are you already out of compliance?
If you've made $100K+ in sales or 200+ transactions in any U.S. state, you may already owe sales tax. If you're using a U.S. warehouse, your obligations increase even more.
Frequently Asked Questions:
What is economic nexus?
Economic nexus is a tax obligation that arises when a business exceeds certain sales thresholds in a state, regardless of physical presence.
Do foreign ecommerce companies need to collect U.S. sales tax?
Yes, foreign companies must collect and remit sales tax if they meet state-specific nexus thresholds including recently enacted economic nexus thresholds.
What if I use a 3PL?
Using a 3PL (third-party logistics provider) in a state typically creates physical nexus, requiring sales tax collection regardless of sales volume. When shipping domestically, you are still responsible for collecting and remitting sales tax in states where you have nexus.
What's the difference between direct and indirect tax?
Direct taxes are levies paid straight to the government by the individual or entity on whom they are imposed, such as on income, and this burden cannot be shifted to others. Conversely, indirect taxes (or transaction taxes) are often collected from an end consumer by a retailer on the value of the goods or services purchased. The ultimate financial burden is intended to rest on the end consumer rather than the entity remitting the tax to the government, which further necessitates the need to get these taxes correct at the time of the sale so that your business is not incurring a nonrecoverable cost.
Talk to our Team
Learn about how our Merchant of Record solution can help you solve the complexities of tax.
Information on this page is based on publicly available data from sources like Avalara and U.S. state tax agencies. All information should be verified with a licensed tax professional.
This information is not intended as tax advice. Please consult a licensed tax professional for your specific tax situation.