The International Seller's Deep Dive into US Sales Tax

The United States is the world's largest consumer market—an irresistible prize for any international e-commerce brand. But with this opportunity comes a uniquely complex challenge: American sales tax. Unlike countries with a single national VAT or GST, the US has no national sales tax. Instead, it's a bewildering patchwork of thousands of different tax jurisdictions, with rules set independently by 45 different states, plus countless counties and cities.

For years, this system created enormous fear and uncertainty for international sellers. However, recent changes in the law have dramatically simplified the situation for most businesses selling on Amazon. This guide will break down the key concepts you need to understand: economic nexus, marketplace facilitator laws, and the steps to ensure you remain compliant.

1. The Most Important Concept: Economic Nexus

For decades, a business only had to worry about collecting sales tax in a state where it had a "physical nexus"—an office, an employee, or a warehouse. For Amazon sellers, this meant that using FBA fulfillment centers across the US created a complex web of physical nexus obligations.

However, a 2018 US Supreme Court case, South Dakota v. Wayfair, changed everything. This ruling established the principle of "economic nexus."

• What is Economic Nexus? A state can now require a business to collect and remit sales tax based purely on its economic activity within that state, even if the business has no physical presence there at all.
• The Thresholds: Each state sets its own economic nexus threshold. The most common threshold is $100,000 in sales OR 200 separate transactions into that state within a 12-month period.

This new reality meant that every online seller, no matter where they were in the world, now had the potential obligation to register and file taxes in dozens of states. This created a potential compliance nightmare.

2. Your Best Friend: Marketplace Facilitator Laws

In response to the complexity created by economic nexus, nearly every state enacted Marketplace Facilitator Laws. This is the single most important development for international Amazon sellers.

• What They Do: These laws legally shift the responsibility for sales tax collection from the individual third-party seller to the "marketplace facilitator" – in this case, Amazon.
• How It Works: In any state with such a law, Amazon is required to automatically calculate, collect from the customer, and remit the correct sales tax directly to the state for all sales made on its platform.
• What This Means for You: For all your sales made through the Amazon platform, you generally do not have to worry about handling sales tax. Amazon does it all for you. This has removed the primary burden and risk of US sales tax compliance for millions of sellers.

3. When DO You Need to Worry? The Exceptions

While Amazon has it covered on their platform, you can still have sales tax obligations in certain scenarios.

• Selling Off-Amazon (e.g., Your Own Shopify Store): This is the biggest exception. Marketplace Facilitator Laws do not apply to sales made through your own website. If you sell direct-to-consumer in the US, you are solely responsible for tracking your economic nexus thresholds in every state. Once you cross a threshold (e.g., you sell $100,000 to customers in California), you must register for a sales tax permit in that state and begin collecting and remitting tax on all future sales there.
• Physical Nexus: If you have a physical presence in the US that is independent of Amazon FBA (for example, you use a non-Amazon 3PL warehouse), you will likely have a physical nexus obligation in that state, which requires you to register and file.

4. A Simple Compliance Framework

1. For Amazon-Only Sellers: If you sell exclusively on marketplaces like Amazon, Walmart, or eBay, your compliance is largely handled for you. You can focus on your business.
2. For Multi-Channel Sellers: If you also sell through your own website, you must use a sales tax compliance software like TaxJar, Avalara, or the native tools in Shopify to automatically monitor your sales against the nexus thresholds in every state.
3. Take Action When You Cross a Threshold: As soon as your software alerts you that you have crossed a nexus threshold in a particular state from your off-Amazon sales, you must register with that state's Department of Revenue and configure your website to collect tax from customers in that state.

While Amazon simplifies sales tax on its platform, a multi-channel US strategy requires expert financial planning. Sitruna can connect you with US e-commerce accountants and tax specialists to help you build a compliant and profitable US expansion plan.

Useful Resources

• Amazon Seller Central: Marketplace Tax Collection FAQ
• The Sales Tax Institute: State-by-State Economic Nexus Guide
• Avalara (Example of Sales Tax Compliance Software)

Conclusion: Simpler Than You Think (On Amazon)

The US sales tax landscape is notoriously complex, but for international sellers who operate exclusively on the Amazon marketplace, the system has become dramatically simpler. By understanding the role Amazon plays as a marketplace facilitator, you can confidently grow your US business without the overwhelming fear of sales tax compliance. The risk and complexity arise only when you venture into selling through your own channels.

‍