US Sales Tax for Sellers Outside the US

Sales Tax Last reviewed 2 September 2026 · 8 min read

If you are used to GST, US sales tax will feel wrong in a specific way. There is no national sales tax. There is no single registration. There are thousands of separate taxing jurisdictions, and it is your job to work out which of them you owe.

The structural difference

GST is one national system with one registration. US sales tax is imposed at state level, and in many states counties and cities add their own rates on top. Two customers in the same state can owe different amounts depending on which side of a city boundary they live on.

A handful of states impose no general sales tax at all. The rest each define their own rules on what is taxable, and those definitions genuinely differ — whether software delivered electronically is taxable, whether a service is taxable, whether shipping is taxable, all vary by state.

There is no federal authority you can register with once and be finished. That is the thing to internalise before anything else.

Nexus: the word that decides everything

You only have to collect a state's sales tax if you have nexus there — a connection sufficient for the state to impose its rules on you. Nexus comes in two forms.

Physical nexus

The traditional kind: an office, staff, or inventory in the state. The one that catches foreign sellers is inventory. If you use a fulfilment service that stores your goods in warehouses across several states, you may have physical nexus in every state where your stock sits — including states you have never chosen, never heard of, and cannot control.

Economic nexus

Since a 2018 US Supreme Court decision, states may require sellers with no physical presence at all to collect tax once their sales into that state cross a threshold — typically expressed as an amount of revenue, sometimes as a number of separate transactions, measured over a defined period.

The thresholds differ from state to state, and states have revised them since. That is why we are not listing them here: a table of thresholds is the fastest-decaying thing you can put on a tax website. They need checking against each state at the time you assess your position.

What marketplaces handle for you

There is genuinely good news here. Most states have marketplace facilitator laws, which shift the obligation to collect and remit sales tax onto the marketplace itself for sales made through it.

If you sell only through a large marketplace, the marketplace is generally collecting and remitting the sales tax on those transactions. Two qualifications matter:

• It covers marketplace sales only. Sales through your own website are yours to handle, and they still count toward your own nexus position.

• Some states still expect a registration or a return from you even where the marketplace remits, so that the state can see the picture.

If you sell services or software

Historically sales tax applied to physical goods, and many states still exempt most services. But that has been shifting, and software is where it gets awkward: states differ on whether downloaded software, and software-as-a-service, are taxable at all.

A SaaS business selling into the US can have obligations in some states and none in others for exactly the same product. There is no shortcut around checking state by state.

What compliance actually involves

1. Work out where you have nexus. Physical presence including stored inventory, plus sales volume against each state's threshold.

2. Register in those states. Each has its own process, and each issues its own permit.

3. Collect at the right rate. Usually the rate at the customer's address, combining state, county and city components.

4. File returns on each state's schedule. Monthly, quarterly or annually depending on the state and your volume. Several states require a return even for a period with no sales.

The filing obligation is the part that surprises people. Registration is not a one-off act — it is a subscription to a recurring return, and a missed nil return still generates a penalty notice.

If you think you are already behind

Uncollected sales tax does not disappear. The liability sits with the seller, and it accrues quietly, because the customer was never charged and nobody complained. Sellers frequently discover it only during due diligence for a sale or an investment round, at which point it is priced against them.

Most states operate voluntary disclosure programmes, which typically limit how far back they look and reduce or remove penalties for sellers who come forward before being contacted. They are much less useful after a state makes the first move.

Note: This guide is general information about US sales tax. State thresholds, rates and taxability rules change frequently and differ by jurisdiction. Please confirm the position for each relevant state before relying on it.