> So you store stock within the USA and UK? My understanding is that in that situation it is unambiguous and you are required to pay sales tax. Would you still be trying to pay Sales Tax in USA if you were sending all your stock out from Canada yourself?
I store stock Canada, USA, and UK. For shipping from Canada to USA, the rules are more murky (similar problem for UK to US). The customer expectation is that they would not need to pay anything extra to receive their order. If there were any customs, duties, or taxes added, they could choose to refuse the delivery. Technically, there is no nexus, so there should not be any such requirement. The decision would be to avoid the sales tax and take chances on avoiding registering for sales tax. Fortunately, with using FBA, I have avoided this problem.
> Also, if you’re only registered for sales tax in two states then isn’t that very close to not paying at a.ll as it’s only 4% of the total states available. How have you chosen which states to pay sales tax to? If it’s based on your keeping stock in those warehouses then again isn’t that different than if you’re sending from your country of origin directly?
I have a couple nexuses in the US. Those are the states that I have registered my business. The current US internet sales tax moratorium prevents other states from requiring that the internet retailer collect and remit sales taxes. It could be undertaken voluntarily, but many states will also require a business license and state income tax as well. Similarly requirements could be extended to city and county, resulting in hundreds of jurisdictions to register, collect, and remit. The decision made by most internet retailers is to follow the federal law and await federally mandated changes.
> Of course like you say the paper burden of trying to pay different sales tax all over the place would certainly be prohibitively annoying and costly. I would 100% simply not sell to the USA if that was required as it would be a total nightmare…
Agreed. That is the position by most. Part of the current confusion is the ambiguity of a nexus in any state where there is an Amazon FBA warehouse. Often those are staging areas and are totally outside of the control of the retailer.
> It’s a shame more people aren’t chiming in with their knowledge. As you say it’s pretty hard to even get an accountant to take a position. Having trouble getting anyone to say anything for sure. So I really appreciate that you’ve taken the time
On the US forums, there is continuous debate on this topic. There is no consensus. There are some sellers who register for every state where there is an FBA warehouse, just in case. Several of those who have done so have regretted it due to the business license and expectation of income tax requirements that follow. Most are waiting on the sidelines for a decision by either restricting their use of FBA (to avoid potential nexuses) or taking no action outside of the state they reside in.