2 ms·
European b2c company US sales tax?
We are a Scandinavian company that sells electronic services to consumers internationally.
We pay EU VAT but no other sales tax.
Around 20% of our sales come from American citizens.
Our accountant brought up the question whether we are obliged to pay sales tax in the US for these sales.
There’s a known case 'Wayfair vs South Dakota' from 2018 that ruled that more than 100k USD _OR_ 200 transactions per year in sales to consumers living in that state mandates sales tax from the company. We are way beyond the transaction threshold in many states since we sell low cost products.
We have talked to 2 independent tax experts regarding this but they are not sure and we find it weird because there must be a lot of companies above these thresholds.
Is anyone else in this situation and can shed some light on how you solved it?
Let’s say we are required to do it, based on the Wayfair prejudicing case, are there any American accountants out there that you can recommend to handle this?
There has to be a lot of companies in our position, how do you solve it?
- mtmail 6y agoYou'd be surprised how many countries have similar regulation, some starting at the first sale, sometimes even regional. We'd have to file in 20-30 countries by now. We're waiting for any tax office to contact us directly before acting, we assume they target bigger companies first. Example > Register for ضريبة القيمة المضافة in United Arab Emirates as soon as possible. > Add the local tax rate in your <our vendor> tax settings. > Do your periodic ضريبة القيمة المضافة filings in United Arab Emirates. because we did a single sale to the UAE apparently.
- throwitnowzone 6y agoThat's crazy. We also have sales in almost every country in the world. Are you a European company? How do you dispense with US sales?
- mtmail 6y agoEuropean doing B2B and SaaS, which gets treated as accessing software over the internet. It's less complex than shipping physical products but still a mix of regulations as each US state can classify SaaS differently. https://www.quaderno.io/blog/sales-taxes-for-saas-in-us https://www.quaderno.io/blog/sales-taxes-for-saas-in-us "Some states regard SaaS the same as electronically downloaded software, so they tax it. Some regard it as a service, and some states don’t tax services at all." https://www.quaderno.io/resources/sales-tax-for-saas https://www.quaderno.io/resources/sales-tax-for-saas has a table of countries. India for example has no threshold https://www.quaderno.io/blog/saas-businesses-indias-online-service-tax https://www.quaderno.io/blog/saas-businesses-indias-online-s... at the same time with B2B it's the customer's obligation to deal with the tax. We, well our accountants, do the EU required breakdown of sales by EU country for tax purposes. For non-EU countries we don't yet.