The short answer
- Sales tax is a state tax, sometimes with local rates added. The IRS does not administer it.
- Since South Dakota v. Wayfair (2018), a state can require a seller with no physical presence there to collect sales tax, once the seller passes the state's economic threshold.
- The South Dakota law behind the case applied to sellers delivering more than $100,000 of goods or services into the state, or making 200 or more separate transactions. Other states set their own thresholds.
- Owning a U.S. LLC does not create sales tax obligations by itself. Where your customers, inventory and activity are decides.
- Registering, collecting and filing are separate steps, each with its own deadlines, in every state where you owe tax.
Table of contents
Selling online to U.S. customers from abroad raises a question that has nothing to do with your U.S. company’s federal filings: where do you owe sales tax? The answer depends on each state, and the rules changed in 2018.
This guide explains the concepts that matter, the steps to follow and the points to check with a professional. It does not list state rates or thresholds: they change, and each state’s tax agency publishes the current ones.
Sales tax is a state matter
There is no federal sales tax. Each state decides what is taxable, at what rate, and who must collect it. Cities and counties in many states add their own rates, so two customers in the same state can pay different rates. The federal side of your business is covered in our guide to U.S. business taxes.
Economic nexus after Wayfair
Before 2018, a state could generally require a business to collect its sales tax only if the business had a physical presence there. In South Dakota v. Wayfair, the Supreme Court ruled that a state can require sellers without a physical presence to collect sales tax.
The South Dakota law in that case covered sellers that delivered more than $100,000 of goods or services into the state in a year, or made 200 or more separate transactions there. The Court considered those thresholds, among other features, in allowing the law. Other states then adopted their own rules, and the thresholds are not the same everywhere. Some states look at sales only, others at sales or the number of transactions. Check the tax agency of every state where you have customers.
Physical presence still counts
Economic nexus adds to physical presence: it does not replace it. Having employees, an office or inventory in a state can create an obligation regardless of your sales there. If you store goods in a warehouse in a state, including a warehouse operated by a marketplace, ask a professional whether that creates an obligation. [Probabile, the details depend on the state]
The five steps
- Map your sales by state. Know how much you sell into each state, and how many orders.
- Compare with the state’s threshold. Each state publishes its own rules.
- Register for a sales tax permit in each state where you owe tax. Every state has its own portal, procedure and timing.
- Collect the right amount at checkout. Rates depend on the destination, and taxability depends on the product, shipping and any bundled items.
- File and pay on the state’s schedule, usually monthly, quarterly or yearly depending on your volume. Some states ask for a return even when no tax is due.
Keep the records behind every figure. Clean bookkeeping makes steps 1 and 5 far easier, because your sales by state come from the books.
Marketplaces
Amazon, eBay, Etsy, Walmart and similar platforms are often classed as marketplace facilitators. In many states, the marketplace collects and remits sales tax on sales made through its platform. That does not always end your obligations: depending on the state, you may still need to register or file a return, for example for sales made outside the marketplace. Check each state’s rules for your selling channels.
For sellers based abroad
- A U.S. company can register for sales tax like any other seller. It needs an EIN and, in many cases, a U.S. address.
- Sales tax is separate from income tax and from Form 5472. Each has its own deadlines: see our calendar of IRS filing deadlines.
- Sales tax is an ongoing yearly cost. Include it in your budget: our article on the hidden costs of a U.S. LLC shows where.
- Payments from customers and platforms flow through your accounts. See U.S. payment systems for international entrepreneurs.
Common mistakes
- Assuming that having a U.S. LLC means “no sales tax”.
- Assuming the marketplace handles everything, in every state.
- Registering in the state of formation only.
- Charging one rate everywhere.
- Ignoring the states you cross a threshold in during the year.
How MyUSAService helps
MyUSAService bookkeeping costs $279 per month and gives you organized records of your sales, which is the starting point of any sales tax review. Tax returns are separate: from $951 for a single-member LLC or a C corporation. Prices as of September 2026. Ask a tax professional about the state-by-state analysis of your own sales.
Frequently asked questions
Do I have to collect sales tax if I sell from abroad to U.S. customers?
It depends on the state of each customer and on your sales there. Since Wayfair, a state can require you to collect once you pass its threshold, even without a physical presence.
What is economic nexus?
It is a connection with a state created by the amount of your sales into it, rather than by a physical presence. Each state sets its own threshold.
Does an Amazon seller need to register for sales tax?
Often the marketplace collects the tax on its own sales, but depending on the state you may still have to register or file. Check the rules of each state.
Who administers sales tax?
Each state’s tax agency. The IRS does not.
Does my LLC’s state of formation decide where I owe sales tax?
No. Where your customers, inventory and activity are decides it, not where the company was formed.
Selling online in the U.S.? Check your sales tax exposure
Talk for 30 minutes, free of charge, with a MyUSAService consultant.
- No obligation
- Consultation in English
- 30 minutes
- We review where you may have nexus
Sources
- Supreme Court of the United States, South Dakota v. Wayfair (2018)
- IRS, Publication 583, Starting a Business and Keeping Records
First published April 24, 2025. This article is general information, not tax advice for your situation. Bookkeeping and accounting | Book a free call
Guide to U.S. Business Taxes for Non-Resident Owners
Bookkeeping Services in the USA for Foreign-Owned LLCs
Hidden Costs of a U.S. LLC for International Entrepreneurs
U.S. Payment Systems for International Entrepreneurs