While all of the amazing advances in technology area make it easier to sell your items to customers in the US from all over the world, it can be frustrating trying to understand the tax laws you have to deal with.
This could get you into a lot of trouble with the US government. We frequently have conversations with eCommerce sellers that are based outside of the United States and they usually have pretty much the same questions.
Andy and Dan join us today to answer these questions and help you get your business on the right track.
Additional Questions Answered:
Q: Do I need a US entity to sell in the US or collect sales tax?
A: A US entity is not required to sell in the US or collect sales tax. We have many clients that keep their foreign entity and some that operate as sole traders/proprietors. In some instances opening a US entity can complicate income tax requirements. You could have US-sourced income to report in that case and you could end up owing federal income tax and in some cases state income tax.
Q: Are there any benefits of opening a US entity?
A: It could help you if you need to set up a US bank account (see below). Also, if you are working with US suppliers, some of them may require you to operate as a US entity.
Q: Is an EIN/FEIN required to sell or collect sales tax?
A: Most states require an EIN (aka FEIN) to register to collect sales tax. An EIN is generally not a legal requirement to sell in the US. However, some suppliers may require it if you are making purchases in the US. You can obtain an EIN directly from the IRS, or we can assist you in getting an EIN if so desired.
Q: Is a social security number or ITIN (Individual Taxpayer Identification Number) required to register for sales tax?
A: If you are a US resident you must have either an SS# or an ITIN.. If you are not a US resident, you are not required to have either one.
Q: Am I required to have a US bank account in the US to file sales tax returns?
A: When filing the returns online, most states require you to have a US bank account because of the ACH limitations. We do not require our clients to use a US bank account to file sales tax returns, remit taxes to the states or for any of our other services. However, the states often require a US bank account to pull the taxes. We have helped companies outside the US and can probably help you also.
Q: Can you assist with or complete forms such as the W-8BEN-E or W-8BEN forms?
A: Yes, we can assist or complete your W-8BEN-E or W-8BEN forms.
Q: Can I have my mail from the various states sent to your firm?
A: Sure, this is part of our sales tax return services. If you are a client, we will give you our address to use as your mailing address.