US sales tax is the most misunderstood obligation for foreign sellers — and the one most likely to be explained to you wrongly. The rule that decides everything is sales tax nexus: the connection between your business and a US state that forces you to register, collect, and file there. Get it right and many sellers have almost nothing to do. Get it wrong and you either overpay for services you don’t need or accumulate liability quietly.
This guide explains sales tax nexus for non-resident sellers in 2026 — the two kinds, the thresholds, why marketplace sellers are usually covered automatically, and where Shopify stores get caught.
Table of contents
- Before sales tax nexus: sales tax is not income tax
- The two types of sales tax nexus
- The rule that saves most sellers: marketplace facilitator laws
- Where Shopify sellers get caught by sales tax nexus
- Digital products and SaaS: don’t assume you’re exempt
- How to handle sales tax nexus without overpaying
- Frequently asked questions
- Build on a compliant US foundation
Before sales tax nexus: sales tax is not income tax
These are separate systems and confusing them causes real errors.
Income tax is federal (and sometimes state) tax on your profit. As a non-resident with no US presence, you often owe $0 US federal income tax — though Form 5472 remains mandatory (see the Form 5472 guide and our tax guide).
Sales tax is a state-level tax on the transaction, collected from your customer and passed to the state. It has nothing to do with your profit or your residency. You can owe $0 income tax and still have a sales tax obligation — which is exactly why sales tax nexus deserves its own analysis.
The two types of sales tax nexus
Physical nexus
Created by a physical connection to a state: inventory stored there, an office or warehouse, employees or contractors, or equipment. For foreign sellers the usual trigger is inventory in a US warehouse — a 3PL or fulfilment centre.
Economic nexus
Created by sales volume alone, with no physical presence, following the 2018 South Dakota v. Wayfair decision. Every state with a sales tax now has an economic nexus rule. The most common threshold is $100,000 in sales into that state in a year; some states use $250,000 or $500,000, and a few also count 200 separate transactions. Thresholds are per state and measured on sales into that state — not your worldwide revenue.
The practical implication: a seller doing $80,000 into each of ten states may cross no threshold anywhere, while a seller doing $150,000 into California alone has sales tax nexus there.
The rule that saves most sellers: marketplace facilitator laws
This is the single most important sales tax nexus rule to know, and it’s good news. Every US state with a sales tax now has marketplace facilitator laws that make the marketplace — not you — responsible for collecting and remitting sales tax on sales made through it.
So if you sell exclusively on Amazon, Etsy, eBay, or Walmart, those platforms calculate, collect, and remit the sales tax on your behalf. You generally have no sales tax registration or filing obligation from those sales, even with inventory in US warehouses.
This is why the old advice to “register in every state where Amazon stores your stock” is obsolete — and why you should be sceptical of anyone selling you 20 state registrations for an FBA-only business. Our Amazon FBA guide covers the rest of the FBA picture.
Where Shopify sellers get caught by sales tax nexus
Here’s the trap. Shopify is not a marketplace facilitator — it’s software that runs your own store. WooCommerce, BigCommerce, and your own checkout are the same. The sale is made by you, so the obligation is yours.
If you run your own store, once you cross a state’s threshold you must register with that state, collect the right rate from customers there, file returns on schedule, and keep records. Shopify Tax and tools like TaxJar or Avalara can calculate and track for you, but they don’t absorb the legal obligation.
| Your setup | Who handles sales tax | Your obligation |
|---|---|---|
| Amazon / Etsy / eBay / Walmart only | The marketplace | Generally none |
| Own Shopify / WooCommerce store | You | Register, collect, file where you have nexus |
| Both marketplace and own store | Split | Only your direct sales count toward nexus |
| Digital products / SaaS | You, where taxable | Varies by state — many tax SaaS |
| Services (consulting, design) | Usually not taxable | Usually none |
Digital products and SaaS: don’t assume you’re exempt
A persistent myth says digital goods are never taxable. In reality states differ sharply: some tax software-as-a-service and digital downloads, others don’t, and definitions vary. If you sell SaaS, templates, courses, or ebooks from your own site at meaningful volume, sales tax nexus analysis applies to you too. Freelance services are usually outside the sales tax net — see US LLC for freelancers.
How to handle sales tax nexus without overpaying
- Separate your channels. Marketplace sales versus direct sales — only the direct ones create your own obligation.
- Track direct sales by state. Your store’s reports do this. Watch for states approaching $100,000 or 200 transactions.
- Know where your inventory sits. A 3PL creates physical nexus in its state for your direct sales.
- Register only where you’ve crossed a threshold. Registering everywhere “to be safe” creates filing duties — and penalties for late filings — in states you didn’t owe.
- Automate calculation once you’re registered in more than one or two states.
- Get a specialist when it’s real. Multi-state registrations are a job for a US sales tax professional, not guesswork.
Frequently asked questions
Do foreign sellers really have to deal with US sales tax?
Yes — sales tax nexus rules apply based on your connection to a state, not your citizenship or where you live. A seller in Istanbul with $200,000 of Shopify sales into Texas has the same obligation as a Texan business. The relief comes from marketplace facilitator laws, not from being foreign.
My LLC is in Wyoming. Do I collect Wyoming sales tax?
Not automatically. Your formation state isn’t where nexus comes from — sales into a state and physical presence there are. A Wyoming LLC with no Wyoming customers and no Wyoming inventory has no Wyoming sales tax duty. (Wyoming and New Mexico remain the best formation states for other reasons — see the comparison.)
Does an LLC help with sales tax at all?
An LLC doesn’t reduce sales tax, but you generally need a US entity and EIN to register with a state and to get a resale certificate — which lets you buy inventory from US suppliers without paying sales tax on goods you’ll resell. That’s a genuine cash-flow benefit.
What happens if I ignore sales tax nexus?
Uncollected sales tax becomes your liability, with interest and penalties, and states increasingly obtain platform data. It’s also a diligence item if you ever sell your business. It rarely stays invisible forever.
Is there one federal US sales tax?
No. There are 45 states plus thousands of local jurisdictions with their own rates and rules. That fragmentation is why automation software exists.
Build on a compliant US foundation
For most of our clients the honest summary is: sell on marketplaces and your sales tax nexus workload is close to zero; sell direct and you monitor thresholds and register where you cross them. Either way you need a properly formed US LLC, an EIN, and clean books underneath it.
Questions about your channel mix? Reach us via live chat or WhatsApp — we respond within minutes, not days.