Single person non resident USA LLC + AdSense/play store income

[troubled soul]

Hello everyone,

I am a non-resident of the United States and I own a single-member LLC that is registered in Delaware. I am generating income from AdSense and the Google Play Store, and I am wondering if this income is considered to be US source income and could trigger Effectively Connected Income (ECI) or “effectively connected to a US Trade or Business” (ETBUS).

thanks

 

[Marzio]

I am wondering if this income is considered to be US source income and could trigger Effectively Connected Income (ECI) or “effectively connected to a US Trade or Business” (ETBUS).

It's considered US source income if income is generated from US clicks but it's not ECI / ETBUS If you are not engaged in a trade or business in the United States.

You will likely pay a variable US WHT depeding on your tax residency.

 

[Jay9]

Im following up on this slightly older post because Im possibly going to be in a similar situation in the future. How did this play out for you.

How does the relationship between "US Sourced" and "Effectively connected" play out?

Does this mean we are holding separate two different things, that the taxability of Google Play sales is not based upon if some of the income is "US Sourced" but instead the taxability is based on if the company/seller/entity is connected to the US by residence or "nexus" of some sort?

That seems to be what happens with Apple, apple asks "interview" type questions to work out if the seller has a "nexus" to see if they should withold anything. i.e. If you tell apple you don't have a server in the US you can get to a W-8BEN form, but if you say you do have a server in the US you end up with a W-8ECI (Effectively connected income?) form.

 

[Marzio]

How does the relationship between "US Sourced" and "Effectively connected" play out?

Having US sourced income doesn't mean it's effectivecly connected income.

if you say you do have a server in the US you end up with a W-8ECI (Effectively connected income?) form.

Having a server in US is probably assimilable to having some kind of resource at your disposal so that's why it's considered effectively connected.