If you’ve ever wondered do you have to pay sales tax on international purchases, you’re not alone—and the answer isn’t as simple as it should be. As global ecommerce grows, more U.S. businesses and consumers are sourcing products directly from overseas. But while international sellers may skip local tax collection, that doesn’t mean the taxman forgets. From use tax rules to import thresholds, state laws often trigger obligations buyers didn’t see coming.
That’s where clarity matters—and where Hands Off Sales Tax (HOST) steps in. With deep expertise in cross-border compliance, HOST helps you navigate multi-state sales tax with confidence, automation, and peace of mind.
So, Do You Have to Pay Sales Tax on International Purchases?
Yes—sometimes. While international sellers often don’t collect U.S. sales tax at checkout, that doesn’t mean you’re off the hook. In most states, the buyer becomes responsible for paying use tax, which is essentially a self-reported version of sales tax applied to untaxed out-of-state or international purchases. If you’re a business importing goods, you may also owe customs duties, and once the products enter your state’s commerce, sales tax obligations may arise depending on how and where you resell or use those goods. It’s a layered, state-specific issue—and it catches many businesses and even consumers by surprise.
Import Duty vs Sales & Use Tax in the U.S.
When you make an international purchase, it’s vital to know the difference between import duties and U.S. sales or use tax. Both impose costs, but they serve distinct purposes and are applied separately.
Customs (Import) Duty
- What it is: A tax levied by U.S. Customs and Border Protection based on the value, origin, and classification of imported goods, as detailed in the Harmonized Tariff Schedule.
- When it applies: At the moment goods enter U.S. territory, upon clearance through customs.
Sales or Use Tax
- What it is: A state-level tax on goods consumed, stored, or used within a jurisdiction. If no sales tax has been collected at purchase, the buyer must pay use tax, often at the same rate as the local sales tax.
- When it applies: After customs clearance, when the imported goods are brought into a state and used or stored. Importing items for personal or business use generally triggers this obligation.
Key Distinctions
| Category | Customs Duty | Sales/Use Tax |
| Levying Authority | Federal (CBP) | State (e.g., CDTFA in California) |
| Timing | At import/Clearance | When goods enter and are used in the state |
| Coverage | Based on value, origin, item type (HTS) | Based on use and location |
| Overlap? | Separate from state taxes | Applies even after duties are paid |
Import duties and use taxes operate independently. Paying one doesn’t exempt you from the other. Understanding their distinct roles can help you stay audit-ready—and avoid costly surprises.
When You Owe Use Tax on International Purchases
International purchases often raise questions about tax obligations. While customs duties apply federally upon entry, many U.S. states—such as California and Washington—impose use tax on goods brought into the state without sales tax paid at purchase.
California: Domestic Use Tax Applies Despite Import Exemptions
California enforces use tax on foreign purchases brought into the state for storage, use, or consumption, regardless of import tax status. Customs duties or exemptions do not exempt items from California use tax.
Some fees—like VAT or duties—may be excluded from the taxable amount, but VAT paid must be included when calculating use tax. If the seller is registered and collects California use tax at purchase, you may claim a credit—just ensure you retain proof.
Washington: Self-Assessed Use Tax for Untaxed Out-of-State Purchases
Washington requires use tax when no sales tax was paid—this includes internet shopping or purchases from states with lower tax. Use tax is calculated on the purchase price plus shipping and must be reported by the user.
Use tax is a state-level obligation that kicks in when sales tax wasn’t collected. The rules differ by state—but they all require proper documentation and timely reporting.
Possession vs. Shipping Point: Why It Matters for International Sales Tax
Even when you pay import duties, your state may still impose sales or use tax based on where the buyer takes possession. Knowing the distinction between possession and shipping point can save you from unexpected tax liabilities—and reduce audit risk.
Title Transfer Triggers Tax
Sales tax is generally owed in the jurisdiction where the title or possession of goods changes hands. If the buyer takes possession in-state, tax is owed—even if goods passed through another location previously.
California: Delivery Location Determines Taxability
California emphasizes the importance of where possession occurs. A sale isn’t tax-exempt just because it originated or shipped from out-of-state; if the buyer takes possession within California—even temporarily—it may trigger regular sales tax. That means a foreign order shipped to an in-state business could be taxable upon receipt.
Origin vs Destination Sourcing: Know Your State’s Rules
Most U.S. states—including for international shipments—follow destination-based sourcing, where tax applies at the location where the buyer receives the item. A few states remain origin-based (tax when goods leave your location), but these are in the minority.
Practical Example
- Seller in Texas ships a gadget to a buyer in Florida. Florida use tax applies when the buyer receives it—regardless of duty.
- A foreign supplier ships to a California business. Possession in CA may trigger California sales tax, import duty notwithstanding.
Understanding how and when possession or title transfer affects tax collection helps you stay compliant.
Cross‑Border E‑Commerce: How States Account for International Purchases
Purchasing from abroad—whether you’re a consumer or an online seller—introduces complex sales tax dynamics in the U.S. Below, we break down how states treat international transactions and spotlight unique exceptions designed for visitors.
Remote Sellers and Economic Nexus
Following the South Dakota v. Wayfair ruling, states expanded sales tax obligations to include remote sellers shipping internationally into U.S. states once they surpass specified thresholds. This means:
- Economic nexus kicks in when sales or transaction volume into a state exceeds defined limits (e.g., $100,000 in sales or 200 transactions).
- Once triggered, even sellers outside the U.S. must register, collect, and remit sales tax in that jurisdiction.
Shopper Exceptions: Visit Refund Programs
Some states offer tax reliefs to foreign visitors:
- Louisiana previously ran a Tax-Free Shopping Program where valid foreign shoppers staying under 90 days could claim a refund on sales tax for purchases permanently removed from Louisiana.
- Texas supports similar refunds through private organizations, subject to strict purchase and documentation rules.
- Washington provides a limited nonresident exemption if goods are purchased for use outside of the state.
These programs are rare but provide relief for international consumers—though some, like Louisiana’s, have recently ended.
Why This Matters
| Buyer/Seller Type | Tax Implication |
| Remote seller exceeding thresholds | Must collect & remit tax |
| International visitor in supported state | May claim state-specific tax refunds |
| International buyer in most states | Likely owes use tax if item consumed in-state |
Without clear understanding or proactive tools, businesses and shoppers alike risk unanticipated liabilities—or missing refunds they could have claimed.
How HOST Simplifies International Purchase Compliance
Navigating sales and use tax obligations for international purchases is complex—but with HOST, businesses don’t have to go it alone. From decoding state-specific use tax rules to ensuring cross-border compliance, HOST provides tailored, expert-driven solutions.
ResaleCertify: Valid Resale Certificates, Made Easy
When international suppliers sell to U.S. resellers, valid resale certificates are essential to avoid incorrect tax charges. HOST’s ResaleCertify platform ensures:
- Accurate resale certificate creation based on state-specific requirements
- Error reduction and audit-readiness through guided workflows
- Immediate generation of compliant documents for transactions involving overseas suppliers or buyers
Core Services for Global Transactions
HOST delivers a full suite of services designed to support businesses dealing with international or remote commerce:
- Nexus Analysis: Identify if international sales create sales tax nexus in any U.S. state
- Sales Tax Registrations: Get registered in all required states—fast
- Filing & Remittance: Managed monthly/quarterly sales tax filings for cross-border transactions
- Notice Handling: Deal with international-related state notices or inquiries without panic
Your Cross-Border Tax Compliance Partner
Whether you’re a U.S. brand importing goods or a foreign seller reaching U.S. customers, HOST helps you stay compliant while focusing on growth. Their tailored support for international complexities makes them the trusted partner for global sales tax clarity.
The Bottom Line: Clarity in a Borderless World
So, do you have to pay sales tax on international purchases? In many cases, yes—especially when states impose use tax or when you’re operating as a business. The rules vary, and missteps can lead to penalties or double taxation. That’s where HOST comes in. From resale certificates to state-specific compliance and cross-border complexities, HOST is the partner that keeps your sales tax footprint clean and audit-ready.
Don’t let invisible borders become expensive mistakes. Reach out to HOST today and simplify your global tax obligations with confidence.
Frequently Asked Questions (FAQs)
1. Do I owe sales tax when I buy goods from an international seller?
You may owe use tax to your state if you didn’t pay sales tax at checkout and the item is shipped into your state. This is true even if customs duties were paid separately. Rules vary by state, but most require use tax reporting for untaxed out-of-state or international purchases.
2. What’s the difference between import duty and use tax?
Import duty is collected by U.S. Customs at the border based on the product type and country of origin. Use tax is collected by your state, not the federal government, and is typically due if you use or store the item in your state and didn’t pay sales tax on it.
3. How do states know I made an international purchase?
States may track large international purchases via shipping records, credit card data, or customs declarations. While smaller consumer items may go unnoticed, businesses are often flagged during audits for unreported use tax.
4. Are international sellers required to collect U.S. sales tax?
Generally no, unless they have nexus (a legal connection) in a state—for example, through warehousing or sales affiliates. But some large marketplaces voluntarily collect and remit U.S. sales tax on behalf of sellers.
5. How can I stay compliant if I make regular international purchases for business?
Use automation and expert support. HOST offers full-service use tax support, resale certificate generation, registration, and filings to help multi-channel sellers and importers stay compliant across all 50 states.
