Foreign business (headquartered outside the US) – Sales Tax Obligations

If you are wondering if your foreign business is required to pay sales tax, the short answer is it depends if your business has nexus in the US. The factors that create sales tax nexus include:

• Economic nexus (exceeding a state’s gross sales or transaction volume threshold)
• A physical location
• Inventory
• Employees/Contractors
• Affiliates
• Temporary Business (i.e., tradeshow)

If you do have nexus in the US based on any or some of the factors listed above, then the states require that you register for a sales tax permit and collect sales tax from the buyers in said state.