US sales tax for non-US sellers: nexus, Wayfair, and when you must register

Selling into the United States from abroad triggers tax obligations that have nothing to do with federal income tax, tax treaties, or whether you have a US company. US sales tax is a state-level consumption tax, and each of the 45 states (plus Washington DC) that impose it sets its own rules on who must collect it. Since the landmark 2018 Supreme Court ruling in South Dakota v Wayfair, those rules apply squarely to foreign sellers with no physical US presence. If you are shipping goods to US customers or selling digital products and SaaS subscriptions into the country, you almost certainly have filing obligations in at least one state. The liability accumulates whether or not you are aware of it, and states are increasingly willing to pursue non-US businesses for unpaid tax. Understanding how US sales tax applies to non-US sellers is no longer optional: it is a core compliance requirement for any business with meaningful US revenue.

Do non-US sellers owe US sales tax?

Yes. The short answer surprises many international founders, but US sales tax does not care about your country of incorporation. It is triggered by where the customer receives the product or service, not where the seller is based. A UK SaaS company selling subscriptions to customers in Texas owes Texas sales tax on those transactions, full stop.

The critical distinction here is that sales tax is a state obligation, entirely separate from federal income tax. You may have no US income-tax liability whatsoever, your country may have a double-taxation treaty with the United States, and none of that exempts you from collecting and remitting state sales tax once you cross the relevant thresholds. Foreign sellers pay US sales tax under exactly the same rules as domestic ones.

States view this simply: if a consumer in their jurisdiction buys a taxable product, the tax is owed. The only question is whether the seller or the buyer is responsible for remitting it. Once you meet nexus requirements, that responsibility shifts to you.

Economic nexus after Wayfair: the $100,000 line

The 2018 Supreme Court decision in South Dakota v Wayfair Inc. eliminated the old requirement that a seller needed a physical presence in a state before that state could require sales-tax collection. In its place, the Court endorsed the concept of economic nexus: if you have sufficient economic activity in a state, you have nexus there.

The most common threshold is US$100,000 in gross sales into a single state within a calendar year (or the preceding 12 months, depending on the state). Cross that line in, say, California, and you must register for a California sales-tax permit, begin collecting tax on taxable sales, and file returns on the state's prescribed schedule. A handful of states set a higher bar: New York and Texas use US$500,000, for example. Each state measures independently, so you could have nexus in three states and not in 47 others.

For non-US ecommerce sellers and SaaS businesses, this means tracking revenue by destination state. Ignoring this does not prevent the liability from accruing: it simply means you will owe back taxes, interest, and potentially penalties when the state catches up.

The fading 200-transaction threshold

When Wayfair was decided, most states adopted a two-pronged test: US$100,000 in sales or 200 separate transactions, whichever was hit first. That 200-transaction threshold created problems for sellers of low-value items who could trigger nexus with relatively modest revenue.

States have been steadily removing the transaction count. By 2026, at least 17 states, including Illinois and Kentucky (both of which dropped it in 2026), have eliminated the 200-transaction prong entirely. The trend is clear: states are converging on a pure dollar-value threshold.

Do not assume 200 transactions is a universal rule. A smaller group of states still applies it, but the list shrinks each legislative session. If you are relying on staying below 200 transactions to avoid registration, verify the current rules in each specific state. This is one of the areas where thresholds change fast, and outdated guidance can leave you exposed.

Marketplace facilitator laws: when Amazon or Etsy collects for you

If you sell through Amazon, Etsy, eBay, or similar platforms, marketplace facilitator laws in virtually every sales-tax state require the platform to collect and remit sales tax on your behalf. This is a significant compliance relief for sellers whose US sales flow entirely through these channels.

There are two important caveats. First, marketplace sales typically still count toward your own economic nexus thresholds. If you sell US$80,000 through Amazon into Florida and US$30,000 through your own Shopify store, your total Florida sales are US$110,000, above the threshold, and you are responsible for collecting tax on the direct-channel portion yourself. Second, direct sales through your own website (processed via Stripe, for instance) are never covered by marketplace facilitator laws. That responsibility sits with you alone.

The practical effect: sellers with a mixed-channel strategy, part marketplace, part direct, face the most complex compliance picture. You need to know which sales are covered and which are not, state by state.

Physical nexus: inventory, FBA and US warehouses

Economic nexus is not the only trigger. Physical nexus, the pre-Wayfair standard, still applies. If you store inventory in a US warehouse, you have physical nexus in that state regardless of your sales volume there.

This catches many non-US Amazon FBA sellers off guard. Amazon distributes inventory across its fulfilment network, which means your products may sit in warehouses in a dozen or more states without your explicit instruction. Each of those states can argue you have physical nexus. The result is a registration obligation in every state where your goods are stored, even if your sales into that particular state are minimal.

Beyond FBA, using any third-party logistics provider with US warehouse locations creates the same exposure. If you are fulfilling US orders from US soil, you need to map where your inventory physically sits and register accordingly. This can mean managing filings in 10, 15, or even 20 states simultaneously.

Registering, collecting and remitting across states

Once you have identified the states where you have nexus, the process follows a predictable sequence:

• Register for a sales-tax permit in each state (this is free in most states but requires an EIN or, in some cases, an ITIN or state-specific identification)
• Configure your checkout or invoicing system to charge the correct rate based on the customer's delivery address (rates vary not just by state but by county and city)
• File returns on each state's schedule, which may be monthly, quarterly, or annually depending on your volume
• Remit the collected tax by the filing deadline

The complexity is administrative, not conceptual. Each state has its own portal, its own return format, and its own rules about what is taxable. SaaS, for example, is taxable in some states and exempt in others. Digital goods follow yet another patchwork. Getting the taxability determination right is as important as getting the rate right.

For a non-US business without US staff, managing multi-state registration and filing manually is a significant time drain. This is where working with a compliance coordinator like Cosmos makes a practical difference: Cosmos handles US sales-tax registration and ongoing filings through licensed US partners, so you are not trying to interpret 45 different state regimes from abroad.

Sales tax is not the federal income-tax question

This point deserves its own section because it is the single most common source of confusion. US sales tax and US federal income tax are completely separate systems with separate rules, separate authorities, and separate obligations.

A non-US company with no permanent establishment in the United States, no US-source income, and full treaty protection against federal income tax can still owe sales tax in 20 states. The reverse is also true: having a US income-tax obligation does not automatically mean you have sales-tax nexus everywhere.

Sales tax is governed by state departments of revenue. Income tax is governed by the IRS at the federal level and by state tax authorities for state income tax (which is yet another separate question). Do not let your income-tax adviser's reassurance that "you have no US tax liability" lull you into ignoring sales tax. They are answering a different question.

How Cosmos helps

Cosmos coordinates US sales-tax compliance for non-US sellers through a network of licensed US partners. The service covers nexus analysis (identifying which states you need to register in), state-by-state registration, return preparation, and filing.

For ecommerce businesses and SaaS companies selling into the US, this removes the need to engage separate advisers in each state or build internal expertise on US sub-national tax rules. Cosmos handles the operational burden while you retain visibility over your obligations and filings. If your US sales are growing and you have not yet addressed sales-tax compliance, a nexus review is the logical first step.

Frequently asked questions

Do foreign sellers pay US sales tax even without a US entity?

Yes. Sales-tax nexus is based on where you sell, not where you are incorporated. A foreign entity selling taxable goods or services into a US state must register and collect tax once it crosses that state's nexus threshold.

Does selling through Amazon mean I do not need to worry about sales tax?

Amazon collects and remits tax on marketplace sales under facilitator laws. However, if you also sell directly through your own website, you are responsible for those transactions. Marketplace sales also count toward your economic nexus thresholds.

How do I know which states I have nexus in?

You need to track your gross sales (and, where applicable, transaction counts) by destination state. If you use FBA or US warehousing, map your inventory locations as well. Cosmos offers nexus analysis to identify your registration obligations across all relevant states.

What happens if I have been selling into the US without collecting sales tax?

The unpaid tax liability accumulates. Most states offer voluntary disclosure programmes that can reduce penalties and limit the look-back period. Acting proactively is significantly better than waiting for a state to contact you. Speak to a qualified US sales-tax adviser before registering, as registering without addressing past liability can trigger audits.

This article reflects rules current as of mid-2026. US state sales-tax thresholds, taxability rules, and filing requirements change frequently. Always confirm your specific obligations with a qualified US sales-tax adviser before making compliance decisions.

This is general information, not tax, legal or accounting advice. Cross-border tax rules differ by country and change frequently; confirm your position with a qualified adviser in the relevant jurisdiction before acting.