Do I Need to Register for U.S. Sales Tax?
A Practical Guide for Non-US Founders
If you are a non-US founder selling to U.S. customers, U.S. sales tax is often one of the most confusing obligations you will encounter. Some founders assume they must register everywhere. Others assume they can ignore sales tax entirely. In practice, both assumptions are usually wrong.
You do not automatically need to register for U.S. sales tax just because you sell to U.S. customers. Registration is triggered only when specific state-level conditions are met.
Unlike VAT or GST systems, U.S. sales tax is not federal. Each state sets its own rules, thresholds, and definitions of what is taxable.
Physical nexus explained
Physical nexus generally exists when your business has a physical presence in a state. This includes inventory stored in U.S. warehouses or fulfilment centres, third-party logistics providers, U.S.-based employees or contractors, or owned or leased equipment.
Example: A UK-based ecommerce brand stores inventory in a Texas fulfilment centre. That inventory alone generally creates physical nexus in Texas.
Economic nexus explained
Economic nexus is triggered by sales activity rather than physical presence. Most states require registration once sales exceed certain thresholds, commonly $100,000 in revenue or 200 transactions within a 12-month period. Some states use higher thresholds, such as $500,000.
Decision checkpoint
You should review your position if any of the following apply:
- You store inventory in the U.S. (including via FBA or a 3PL)
- You employ or contract anyone based in the U.S.
- You are approaching $100,000 in sales to customers in a single state
- Your U.S. sales increased sharply after a launch or promotion
If none apply, registration is often not required yet — but monitoring is essential.
Reassurance for non-US founders
Most non-US founders discover they only need to register in one or two states initially. The objective is clarity, not over-compliance.
Ready to check your nexus status? Use our free Nexus Checker to find out where you may have sales tax obligations.
Have questions? Check our FAQ or view our pricing for full-service compliance support.