If you sell in the U.S. through Amazon Marketplace, you need to pay particular attention to sales taxes as you might have to meet some obligations and requirements, even if the country in which you are established has a tax treaty with the United States.
Nexus and Amazon FBA
You might not be subject to collect sales tax according to federal law, but depending on the U.S. state where you sell goods, you may have a Nexus and therefore have to collect and remit the sales tax. Even if you do not have a physical presence in the state (office, shop), you might have a Nexus if you have an inventory in a warehouse, even by using an agent. So if you use Amazon FBA service, your inventory is sent to an Amazon warehouse for storage and shipment to US customers. This means you are considered as having a physical presence in the state as you are the owner of that inventory. You will therefore be considered as having a Nexus in a lot of American states because of that physical presence.
What Are Your Obligations?
You will need to find out in which states you have a Nexus and get registered for sales tax collection if that is the case. It is important to note that you might have a Nexus in one state but not in another as the rules are specific to each state. To be in compliance and collect sales tax from your clients, you need a Taxpayer Identification Number (TIN) issued by the IRS. This number is used for tax reporting and should not be confused with the Employer ID Number or the Social Security Number. Sales tax must be paid to the state at least every quarter. Failure to do so may result in serious problems and hefty fines.
If you are an international seller making sales in the U.S. through Amazon FBA, ASD Group can help with all obligations related to collecting and paying sales tax. Our branch in the U.S. offers a full tax representation service and our experts can advise on whether you have a Nexus.
This article is intended for informational use only and does not constitute legal, financial or tax advice. For specific advice applicable to your business, please contact us.