Should a foreign non-resident-owned US LLC charge sales tax?

[Topcat]

Hi! I am sole owner of a Wyoming LLC that sells digital non-tangible goods (website memberships that stream video content via amazon s3). As the thread title states, I am not a US person, have no offices or warehouses there and have never even visited the US. Should I charge US-based customers sales tax on the digital products I sell?

If the answer is yes, how can I set up Stripe and Paypal to automatically deduct this tax from sales? Many thanks to anyone who answers!

 

[Topcat]

how can I set up Stripe and Paypal to automatically deduct this tax from sales?

If you don't know the answer to this part but do know whether or not I should be collecting and remitting sales tax (seems it's usually 7% for US-based customers), please let me know. From the research I did it appears that you need to be hitting a certain revenue threshold from any particular State (usually $100k+ per year for that State) to qualify for having to collect and remit sales tax for US sales. In this case, I would not qualify because I don't and probably will never have $100k income from any one State in a year. But if anyone knows and is sure of the answer, it would be extremely helpful.

 

[Topcat]

Nobody knows?

 

[Jay9]

I have some limited knoweldge about this from my reading about how sales tax applies to digital sales of apps/books in the apple/google app store.

1. It is my understanding that US state sales taxes are a tax on the purchaser, and that when sales taxes apply to the customer, they must be collected, no matter what the legal status or location of the seller is. The nightmare of sales taxes on digital products is each state has different rules, I believe there is even one state that forces you to apply sales tax if you make just 5 sales in one year. So sales taxes start to apply very quickly.

2. The beauty of the Apple/Google app stores, as I understand it, is Apple/Google handle the sales tax component of all your digital product sales in the USA. That is why I only sell my app via the app stores, because it means I don't have to deal with the problem of registering for state sales taxes every time the sale volume hits the sales tax threshold. It's just too much for a small new growing business to have to worry about. How many small businesses have time to subscribe to tax accountant mailing lists to keep up to date on the sales tax rule changes that occur from time to time.

I heard a while ago that Stripe was looking into providing a similar 'collect sales tax for you' type of service, I don't know if thats happened yet, I don't use stripe.

I suspect a lot of people outside of the US are just not collecting sales tax and not getting in trouble because they are outside of the US and not big enough for US states to notice.

Update: It looks like stripe has added a function to allow you to collect sales tax, but then you'd still have to do the paperwork to send the money to the relevant state. Stripe Tax | Steuerautomatisierung mit einer einzigen Integration This makes me so thankful that Apple does all the annoying state sales tax for us. Yea we complain about the "15/30% Apple tax" but for small companies at least, who would want to do this sales tax stuff manually?

 

[daniels27]

Yes, many states require sales tax collection.
https://www.avalara.com/blog/en/nor...-guide-to-digital-products-and-sales-tax.htmlhttps://www.taxjar.com/blog/sales-tax-digital-productshttps://www.fonoa.com/blog/guide-to-the-taxability-of-digital-products-in-the-ushttps://quaderno.io/blog/sales-tax-digital-products-us/
You can do this with PayPal automatically
https://developer.paypal.com/api/nv...n/checkout-settings/#auto-calculate-sales-tax