Selling into the United States: Sales Tax, Nexus and Federal Reach

The United States is the single largest e-commerce market in the world, and the only major one with no national consumption tax. There is no federal VAT and no federal sales tax. Instead, indirect taxation lives at the state level: 45 states and the District of Columbia levy a sales tax, and beneath them sit thousands of county and city jurisdictions with their own rates. A combined rate is rarely a round number — it is built from a state rate plus one or more local rates, and there are well over ten thousand distinct rate combinations across the country.

For a foreign seller this is the central difficulty. The US does not give you one registration and one return. It gives you a map of jurisdictions, each with its own rules, and asks you to work out where you owe — a question answered by the concept of nexus.

Nexus: the trigger for every obligation

Nexus is the connection between a seller and a state sufficient to require that seller to collect and remit the state’s sales tax. Until 2018 it depended on physical presence. Then the Supreme Court’s decision in South Dakota v. Wayfair established economic nexus: a state may require an out-of-state — and out-of-country — seller to collect its tax purely on the basis of sales volume.

Two forms of nexus now matter to an e-commerce seller.

Economic nexus is crossed by exceeding a state’s sales threshold. The most common standard is $100,000 in sales or 200 transactions in the current or prior year, but it is not universal: several large states set a higher bar — California, Texas and New York use $500,000 — and states are steadily dropping the transaction count in favour of a pure revenue test. Each state’s threshold is measured separately.

Physical-presence nexus still exists and still bites hardest. Storing inventory in a state — which is exactly what Amazon FBA and most third-party logistics arrangements do — creates nexus in that state immediately, with no threshold. A foreign seller who places stock in FBA warehouses can acquire collection obligations in a dozen states before making a single dollar of “threshold” sales.

The practical first step into the US market is therefore a nexus study: a state-by-state determination of where inventory sits and where sales volumes have crossed the line. Without it, a seller is either over-registering or, more dangerously, accumulating uncollected tax as a personal liability.

Marketplace facilitator rules — helpful, not a free pass

Every state with a sales tax now has marketplace facilitator legislation. It shifts the duty to collect and remit sales tax from the individual seller to the marketplace — Amazon, eBay, Etsy, Walmart — for sales made through that platform.

This genuinely reduces the burden, but it does not remove it:

• Sales made through the marketplace still count toward your economic-nexus thresholds in many states, so they can pull your direct channels (your own Shopify store, wholesale) into a collection obligation.
• Several states still expect a marketplace seller to register and file a return — often a zero or informational return — even when the platform remits the tax.
• The moment you sell through any channel the marketplace does not cover, you are the collector, and you need a permit in every nexus state for that channel.

Treat marketplace collection as covering one lane of traffic, not the whole road.

What a foreign seller actually needs

There is no “fiscal representative” in the US sense of a co-liable local agent — that is a European mechanism. What a non-US business needs instead is a defined set of credentials and registrations:

• An EIN (Employer Identification Number) from the federal tax authority, the IRS. It is the tax identifier that underpins state registrations, marketplace onboarding and customs entries. A foreign business can obtain one without a US entity.
• A sales tax permit (also called a seller’s permit or sales-and-use-tax licence) in each state where you have nexus. Collecting tax without a permit is itself an offence in most states; so is failing to collect once you have nexus.
• A process for exemption and resale certificates, so that legitimate B2B and resale sales are not taxed in error — and so that you can prove it under audit.
• Ongoing returns on each state’s own calendar — monthly, quarterly or annual depending on volume — with the tax broken down to the local jurisdiction.

The federal layer: income tax is a separate question

Sales tax is not the only exposure. A foreign company selling into the US must also consider federal and state income tax.

At the federal level, a foreign corporation is taxed on income that is effectively connected with a US trade or business. Whether selling into the US creates that exposure usually turns on whether the company has a permanent establishment under the income-tax treaty between the US and its home country. Many countries — Italy, China, Japan, India among them — have such a treaty, and merely shipping goods to US customers, or holding inventory purely for fulfilment, will often not by itself create a taxable presence. But the analysis is fact-specific, and several states apply their own economic nexus for income tax (commonly a $500,000 in-state sales factor) that does not depend on the federal treaty at all.

The lesson is to separate the two questions cleanly: sales tax is about collecting tax from customers; income tax is about tax on your own profit. They have different triggers and different treaties.

Imports: the end of the $800 de minimis

For years, the US let shipments valued at $800 or less enter free of duty under the de minimis rule — the engine of a great deal of direct-to-consumer cross-border trade. That era has ended. De minimis treatment was removed for shipments from China and Hong Kong in May 2025 and for all countries at the end of August 2025.

The consequence is structural. Every shipment, regardless of value or origin, now passes through a formal or informal customs entry and is assessed import duties, taxes and fees. Combined with the elevated tariff environment, this changes the economics of parcel-by-parcel fulfilment and makes the choice of Importer of Record, customs broker and Incoterms (DAP versus DDP) a board-level decision rather than a logistics footnote. Many sellers respond by importing in bulk and fulfilling domestically — which, in turn, places inventory in US states and brings the nexus analysis back to the front of the queue.

Two typical scenarios

A European or Asian brand launching on Amazon US with FBA. Inventory enters FBA warehouses, creating physical-presence nexus in every state where Amazon stores it — immediately and regardless of sales. Amazon remits the sales tax on Amazon orders as marketplace facilitator, but the brand still needs an EIN, registrations in inventory states, and a plan for any direct sales. Import duties now apply to every bulk shipment.

A foreign seller shipping direct to US consumers from abroad. No US inventory, so physical nexus is avoided, but economic nexus accrues as sales grow — state by state, at $100,000 or 200 transactions. Each shipment is now dutiable at the border. The seller needs an EIN, a monitoring process for thresholds, and registrations that switch on the moment a state is crossed.

How Servix International helps

Servix International operates a United States branch in Bellevue, Washington, and supports foreign e-commerce sellers across the full US compliance stack: nexus studies to map exposure, EIN procurement, state sales-tax registrations, return filing on each jurisdiction’s calendar, exemption-certificate management, and coordination of the income-tax and permanent-establishment analysis with treaty specialists. As the global division of an Italian regulated accountancy firm with more than 20 years of cross-border practice, we give a non-US seller a single, accountable partner for a market that otherwise hands you fifty separate rulebooks.