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If your foreign-owned US LLC sells physical products online, you may owe US sales tax even though you live abroad and have no warehouse in America. Sales tax nexus is the legal connection between your business and a state that forces you to collect and remit that state’s sales tax. Since the Supreme Court’s 2018 Wayfair decision, most states define nexus by economic thresholds, commonly $100,000 in annual sales or 200 transactions, although exact thresholds vary by state and change over time. If you sell only through Amazon, eBay, or Etsy, those marketplaces usually collect and remit the tax for you under marketplace facilitator laws. If you sell through your own Shopify store or website, collecting and remitting is your job.
Table of Contents
- What is sales tax nexus, exactly?
- Physical nexus vs economic nexus
- Economic nexus thresholds by state (approximate)
- Marketplace facilitator laws: when Amazon collects for you
- Does a foreign owner really need a seller’s permit?
- How to register for a seller’s permit as a foreign owner: 8 steps
- Digital products and services: a special case
- What happens if you ignore sales tax
- FAQ
- Sources
- Conclusion
What is sales tax nexus, exactly?
Nexus is simply the trigger point. A state can only require your LLC to collect its sales tax if your business has enough connection to that state. Cross the threshold and you must register for a seller’s permit, add sales tax at checkout, file returns, and remit to the state’s revenue department.
The key point for non-US founders: nexus has nothing to do with your citizenship, your residence, or where your LLC is registered. A Pakistan-based founder with a Wyoming LLC who sells $120,000 of phone accessories to customers in California has California nexus, because the connection is measured against customers and sales, not against the owner. States do not care that you have never set foot in the United States.
Nexus is also state by state. Having nexus in one state says nothing about the other 44 states with sales tax. Five states (Alaska, Delaware, Montana, New Hampshire, and Oregon) have no statewide sales tax, although local taxes can still apply in parts of Alaska. See our broader overview of US LLC taxes for foreign owners to see how sales tax fits alongside federal income tax, Form 5472, and annual state obligations.
Physical nexus vs economic nexus
Physical nexus is the old-fashioned kind: a real footprint in the state. For an ecommerce seller, it can come from surprisingly small things. Inventory stored in an Amazon FBA warehouse in Texas creates Texas nexus, even though you never chose that warehouse. An employee or contractor working in Florida creates Florida nexus. FBA sellers routinely discover they have physical nexus in a dozen or more states they never intended to do business in, purely because of where Amazon stores their inventory.
Economic nexus is the newer kind, created by the Supreme Court’s decision in South Dakota v. Wayfair (2018). After Wayfair, every state with a sales tax adopted rules saying that a certain volume of sales into the state creates nexus, with no physical presence required. This is the rule that catches most foreign sellers: your sales into California create California nexus once you cross its threshold, even if you and your inventory are on other continents.
Both kinds of nexus count. Meeting either one triggers the obligation to register, collect, and file.
Economic nexus thresholds by state (approximate)
The most common pattern is $100,000 in sales or 200 transactions in the previous or current calendar year, but many states have since dropped the transaction count, raised the dollar figure, or both. Treat every figure below as approximate as of October 2026 and always confirm on the state’s own revenue department site before acting.
| State | Approximate economic nexus threshold | Notes for foreign sellers |
|---|---|---|
| California | $100,000 in sales | No transaction threshold; one of the most strictly enforced states |
| New York | $500,000 in sales and 100 transactions | Among the highest thresholds in the country |
| Texas | $500,000 in sales | Marketplace sales excluded from your count |
| Florida | $100,000 in sales | Transaction threshold removed |
| Illinois | $100,000 in sales or 200 transactions | High local rates in Chicago on top |
| Washington | $100,000 in sales | No state income tax, but strict on sales tax |
| Pennsylvania | $100,000 in sales | Transaction threshold removed |
| New Jersey | $100,000 in sales or 200 transactions | Dense, high-volume market |
| Virginia | $100,000 in sales or 200 transactions | Calendar-year measurement |
| North Carolina | $100,000 in sales or 200 transactions | Remote sellers with no physical presence |
A few practical notes on reading this table. First, “sales” generally means gross retail sales of taxable goods delivered into the state, though some states count exempt sales too. Second, most states measure the threshold on a rolling 12-month or calendar-year basis, and once you cross it, nexus typically continues to apply going forward even if you later dip below it. Third, several states have eliminated the 200-transaction test entirely, so a high volume of tiny orders no longer creates nexus there. Confirm the current version before you register.
Marketplace facilitator laws: when Amazon collects for you
This is the section that saves most foreign sellers a lot of work. Every state with a sales tax now has a marketplace facilitator law: when you sell through a qualifying marketplace, the marketplace itself must collect and remit sales tax on those transactions. Amazon, eBay, Etsy, and Walmart all operate as marketplace facilitators and collect tax automatically in effectively every state.
What this means in practice: if 100 percent of your US sales go through Amazon FBA and Amazon’s marketplace, Amazon handles the sales tax collection and remittance on those orders. You generally do not need to register for a seller’s permit in states where your only activity is marketplace-facilitated sales.
But there are three important limits. First, the protection covers marketplace sales only. If you also sell through your own Shopify store, your own website, or wholesale to US retailers, those sales are yours to handle, and their thresholds are measured separately. Second, a few states still want marketplace-only sellers to register for a permit even though no tax is due, so check the state’s guidance rather than assuming. Third, and most commonly misunderstood: Shopify is not a marketplace facilitator in most states. Shopify gives you tools to calculate and collect tax on your own store, but the legal responsibility to register, collect, and remit stays with you.
Does a foreign owner really need a seller’s permit?
Yes, if you have nexus and you make direct (non-marketplace) sales of taxable goods into that state. There is no exemption for foreign ownership and no small-seller exception at the federal level. The obligation attaches to where your customers are, not where your company is.
You likely do not need a seller’s permit if you sell exclusively through marketplace facilitators, have no direct-channel sales into the state, and the state does not require marketplace-only sellers to register. That describes a large share of foreign-owned Amazon-only businesses.
You likely do need one if you run your own Shopify or WooCommerce store and cross a state’s threshold, sell taxable digital products there, have inventory or staff creating physical nexus alongside direct sales, or sell wholesale to US businesses (some states require a permit or resale certificate even for wholesale).
When in doubt, the cost of checking is near zero and the cost of being wrong is not.
How to register for a seller’s permit as a foreign owner: 8 steps
Seller’s permits are issued by each state’s department of revenue (sometimes called the department of taxation or comptroller), and you register separately in every state where you have nexus. The process is similar everywhere. As of October 2026, here is the procedure:
Step 1: Confirm you actually have nexus in the state
Before registering anywhere, map your exposure. List every state where you (a) store inventory, including Amazon FBA warehouses, (b) have employees or contractors, or (c) cross the economic threshold with direct-channel sales. Register only where you have nexus.
Step 2: Make sure your LLC and registered agent are in place
States expect a real business entity on the application, and nearly every state requires a registered agent with an in-state address to receive official mail. If you have not formed your LLC yet, do that first: Registered Agents Inc’s formation service bundles the state filing, a domain name, a website, and one year of free registered agent service for $100 + state fee, which covers this requirement from day one.
If you need a seller’s permit in a state other than your LLC’s home state, check whether that state also requires you to register your LLC as a foreign entity there. Some do, and foreign qualification brings its own registered agent requirement in that state (standalone registered agent service typically runs about $200 per year; check current pricing).
Step 3: Get your EIN from the IRS
Almost every state application asks for your federal Employer Identification Number. Foreign founders get the EIN free from the IRS by filing Form SS-4 (by fax or mail if you have no SSN or ITIN). Allow several weeks: the IRS is slower with international applications. Our EIN guide for foreigners walks through the exact process.
Step 4: Gather the information the application asks for
Typical requirements: your LLC’s legal name and formation state, EIN, business address, your registered agent’s name and address in that state, a NAICS activity code, the date you started selling into the state, and an estimate of monthly taxable sales. Some states also ask foreign owners for passport details instead of a Social Security Number.
Step 5: File the application on the state’s revenue website
Most states now accept online applications through their department of revenue portal. Many states issue the permit free of charge; a few charge a small application or registration fee. Processing ranges from instant approval to several weeks depending on the state.
Step 6: Set up sales tax collection at checkout
Once permitted, configure your store to collect the correct rate. US sales tax is destination-based in most states, meaning you charge the rate for the buyer’s address, and rates combine state, county, and city taxes. Tools like TaxJar or Avalara automate multi-state rates and filings for a monthly fee. See our guide on using Stripe with a non-resident LLC for the payment side.
Step 7: File returns and remit on schedule
Getting the permit is the start, not the end. Each state assigns you a filing frequency (monthly, quarterly, or annually) based on your sales volume, and you must file a return even in periods with zero taxable sales. File on time: late filings draw penalties and interest automatically, so put every state’s deadlines into one tracker.
Step 8: Keep records and stay current
Keep invoices, exemption certificates, and marketplace facilitator reports for at least the state’s record-retention period (commonly 3 to 7 years). Re-check thresholds annually and your own sales by state every quarter, because a business safely under every threshold last year can cross two or three this year.
Digital products and services: a special case
If you sell ebooks, courses, software, SaaS, or digital downloads, the rules get murkier. States are split: many tax digital goods much like physical ones, some tax only specific categories (like prewritten software but not custom services), and a few exempt digital products entirely. Services are even more fragmented, with most professional services untaxed but some states taxing specific categories.
Economic nexus thresholds generally apply to digital sellers the same way, measured on sales into the state. Check exactly which states tax your specific product category before assuming anything.
What happens if you ignore sales tax
States treat uncollected sales tax as the seller’s debt, not the customer’s. If you had nexus and failed to register, the state can assess the tax you should have collected, plus penalties and interest, going back several years. Voluntary disclosure programs exist in many states and can reduce penalties if you come forward before an audit notice arrives.
The good news: this is one of the most solvable compliance problems a foreign seller faces. The thresholds are public, and registration is usually free and online.
FAQ
Do non-US citizens have to collect US sales tax?
Yes, if their LLC has nexus in a state and makes taxable sales there. Citizenship and residence are irrelevant to sales tax obligations. The state looks at where your customers are, what you sell, and whether you cross its physical or economic thresholds. A foreign owner with qualifying sales into California collects California sales tax exactly like a California resident would.
What is the sales tax nexus threshold in most states?
The most common pattern is $100,000 in annual sales into the state, often paired with a 200-transaction test, but this varies widely and changes over time. New York uses $500,000 and 100 transactions, Texas uses $500,000, and several states have dropped the transaction test entirely. Verify the current threshold on the state’s revenue department website before making decisions.
Does Amazon handle sales tax for FBA sellers?
For marketplace sales, yes. Under marketplace facilitator laws in every state with sales tax, Amazon collects and remits sales tax on orders placed through its marketplace. However, this covers only marketplace transactions. Direct sales through your own website and some states’ registration quirks still fall on you.
Does Shopify collect and remit sales tax for me?
No, not in the way marketplaces do. Shopify is generally not classified as a marketplace facilitator, so it does not assume your collection and remittance duties. It provides tax calculation and collection tools for your own store, but registering for permits, filing returns, and remitting payment remain your legal responsibility.
Do I need a seller’s permit if I only sell on Amazon?
Usually not, if Amazon marketplace sales are your only US sales activity. Because Amazon collects and remits as the marketplace facilitator, most states do not require marketplace-only sellers to register. The exceptions are a handful of states that still want a registration on file and any state where you make even occasional direct sales. Confirm the rule state by state rather than assuming a blanket exemption.
Can I register for a seller’s permit without a US address or SSN?
In most states, yes. You apply as a foreign-owned entity using your LLC’s registered agent address in that state and your federal EIN instead of a Social Security Number. A few states have extra identity verification steps for foreign applicants, and processing can take longer.
Sources
- South Dakota v. Wayfair, Inc., 585 U.S. (2018) — U.S. Supreme Court decision establishing economic nexus; via supremecourt.gov
- Tax Foundation, “State Remote Seller Nexus Rules” — current 50-state summary of economic nexus thresholds; taxfoundation.org (checked October 2026; thresholds change, verify against state sources)
- California Department of Tax and Fee Administration (cdtfa.ca.gov) — $100,000 economic nexus threshold guidance for out-of-state retailers
- New York State Department of Taxation and Finance (tax.ny.gov) — $500,000 and 100-transaction threshold guidance
- Texas Comptroller of Public Accounts (comptroller.texas.gov) — $500,000 economic nexus threshold for remote sellers
- Florida Department of Revenue (floridarevenue.com) — remote seller registration and threshold guidance
- IRS, “Apply for an Employer Identification Number (EIN) Online” and Form SS-4 instructions — irs.gov
Conclusion
Sales tax is the least intuitive tax a foreign LLC owner faces, because the obligation follows your customers across state lines while you sit on another continent. The system is manageable once you see its shape: physical nexus from inventory or people, economic nexus from sales volume, marketplace facilitator laws covering your Amazon and eBay sales, and a straightforward permit process in each state where you genuinely have nexus.
The foundation everything else rests on is a properly formed LLC with a registered agent already in place, since every seller’s permit application asks for both. If you have not formed yours yet, start your LLC with Registered Agents Inc: $100 + state fee covers the state filing, a domain name, a website, and one year of free registered agent service, so your entity is ready before the first permit application. Pair that with a cross-border tax professional for your specific situation. For the bigger federal picture, read our Form 5472 guide for single-member LLCs next.