Sales Tax Nexus: When Foreign Sellers Owe US Sales Tax
Key takeaways
As of October 2026, US sales tax is set by each state, and a seller with no US office has sales tax nexus once it passes a state threshold. California and Texas use $500,000. Amazon, Walmart and TikTok Shop collect on most marketplace orders, but direct sales and US inventory need their own check.
Does a seller with no US office have sales tax nexus, and who collects the tax?
Brand owners based outside the US often ask us:
"We have no US entity and no office. Do we owe sales tax?"
"We only sell on Amazon. Doesn't Amazon handle the tax?"
"If we open our own Shopify store, do we register in every state?"
The short answer: US sales tax is a state tax, not a federal one, and a seller has to register and collect only in states where it has sales tax nexus. Nexus is the connection between a seller and a state that triggers the duty to collect.
That connection no longer needs an office. Sales volume alone can create it, and so can inventory sitting in a warehouse. This post covers the thresholds in three large states, what marketplaces collect for you, and what stays on your side.
1. Sales tax nexus without a physical presence
Before 2018, a state could require a seller to collect sales tax only if the seller had a physical presence there, such as an office or employees. That changed in 2018.
On June 21, 2018, the US Supreme Court decided South Dakota v. Wayfair and overruled Quill, the case behind the physical presence rule (slip opinion, Cornell LII). The South Dakota law the Court upheld covers sellers that, on an annual basis:
- deliver more than $100,000 of goods or services into the state, or
- engage in 200 or more separate transactions there
A connection created by sales amount or transaction count is called economic nexus. A connection created by an office, staff or inventory in the state is physical nexus. A seller with no physical presence in a state is a remote seller.
Since Wayfair, the question is not where your company sits but how much you sell into each state.
2. Economic nexus thresholds in California, Texas and New York
Each state sets its own threshold, lookback period and counting rules. Here are three large states, from each state's tax agency.
California. Since April 1, 2019, a retailer must register and collect when its combined sales of tangible personal property for delivery in California exceed $500,000 in the current or preceding calendar year. Sales by related persons count toward the total (CDTFA).
Texas. Texas gives remote sellers a safe harbor. A remote seller with total Texas revenue of less than $500,000 in the preceding twelve calendar months does not need a permit and does not collect. Once you pass $500,000, you must start collecting no later than the first day of the fourth month after the month you crossed it (Texas Comptroller).
New York. New York uses two tests, and you must meet both. A business must register when, in the preceding four sales tax quarters, its gross receipts from goods delivered into New York exceeded $500,000 and it made more than 100 sales there (NY DTF).
| State | Economic nexus threshold | Lookback period | Also note | Source |
|---|---|---|---|---|
| South Dakota (law upheld in Wayfair) | Over $100,000 or 200+ transactions | Annual | The test the Supreme Court upheld | Slip opinion |
| California | Over $500,000 in sales, related persons included | Current or preceding calendar year | Inventory in the state is physical presence | CDTFA |
| Texas | Safe harbor ends once revenue passes $500,000 | Preceding 12 calendar months | Collect by the 1st day of the 4th month after crossing | Texas Comptroller |
| New York | Over $500,000 and over 100 sales | Preceding four sales tax quarters | Marketplace sales count toward the test | NY DTF |
The same $500,000 figure means different things in each state, so read each state's own page, not a summary chart.
3. Marketplace facilitators collect on marketplace orders
Selling through a marketplace changes who collects. Under marketplace facilitator laws, the platform calculates, collects and remits sales tax on behalf of the third-party sellers on it. The platform is the marketplace facilitator; you are the marketplace seller.
- Amazon. As the marketplace facilitator, Amazon calculates, collects, remits and refunds sales tax on third-party orders shipped to states where these laws are in effect. Its table lists start dates of October 1, 2019 for California, October 1, 2019 for Texas and June 1, 2019 for New York (Amazon Help).
- Walmart. Walmart's policy says all states that levy sales, use or gross receipts taxes have passed marketplace facilitator laws (Walmart Marketplace Learn, updated December 10, 2025). Fees on that channel are in our Walmart Marketplace fees post.
- TikTok Shop. TikTok's Seller University says all US states that impose a sales tax have enacted marketplace facilitator laws requiring TikTok to collect sales tax on TikTok Shop transactions (TikTok Shop Seller University, July 1, 2024). For how orders ship on that platform, see our TikTok Shop fulfillment post.
Texas goes further. A remote seller that sells only through a marketplace provider that certifies it collects and reports Texas sales and use tax for the seller does not need a Texas permit (Texas Comptroller).
On marketplace orders the platform usually collects, but that does not end your own checks.
4. New York counts marketplace sales toward the threshold
This part is easy to miss. When a platform collects the tax, those sales do not always drop out of your nexus math. New York is one example.
New York's tax department answers the question directly: sales you make into New York through an online marketplace should be included when you check the threshold (NY DTF).
For example, say a brand sells $400,000 into New York on Amazon and $150,000 through its own Shopify store, with well over 100 orders. Its New York total is $550,000, above the threshold, even though the Shopify store alone looks small.
Track sales by state across every channel, not just the channels where you collect the tax yourself.
5. Inventory in a US warehouse creates physical nexus
Inventory is a separate trigger. California's CDTFA lists maintaining inventory or office locations in California as physical presence (CDTFA). That applies regardless of the $500,000 sales test.
It is easy to treat the choice of a 3PL or FBA warehouse as a pure logistics decision: speed, cost, capacity. In California, putting stock in a warehouse also puts a sales tax question on your desk. If you are weighing where your stock should sit, our Amazon FBA vs 3PL post covers the logistics side.
For any other state where you hold stock, check that state's tax agency page for its own rule.
Where your inventory sits is a tax decision as well as a shipping one.
6. Wholesale orders need a resale certificate
When you sell wholesale to a US retailer or distributor, the buyer is buying goods to resell. The buyer gives you a resale certificate, and you do not charge sales tax on that sale.
In Texas, a sale for resale is exempt when the seller accepts a properly completed Form 01-339, the Texas Sales and Use Tax Resale Certificate. The seller should keep it in its records for four years (Texas Comptroller FAQ).
If you did not charge tax on a wholesale order, keep the certificate that shows why.
Four questions before you open a channel
Before you go live, answer these:
1. Can you see sales and order counts by state, across all channels combined?
2. Which states hold your inventory today, and which will after your next shipment?
3. Does each marketplace you use collect sales tax in the states you ship to?
4. Do you keep a resale certificate on file for every wholesale buyer?
Filing duties depend on your company's facts, so confirm your registrations with a US tax professional.
Wrap-up
US sales tax runs state by state. Marketplaces collect on most marketplace orders, but your own store and your US inventory remain your responsibility to check.
LinkONE supports Korean brands with Amazon, Walmart and TikTok Shop store setup and FBA and FBM operations.
In the end, sales tax nexus is decided by how much you sell into each state and where your stock sits, not by where your company is based.
Frequently Asked Questions
Do foreign sellers owe US sales tax?
It depends on the state. Since the 2018 Wayfair decision, a seller with no US office can have nexus once its sales into a state pass that state's threshold (slip opinion). California's threshold is $500,000 in sales for delivery into the state (CDTFA).
Do I file sales tax if I sell on Amazon or TikTok Shop?
On marketplace orders, the platform usually collects and remits. Amazon does so in states where marketplace facilitator laws apply (Amazon Help). Texas says a remote seller that sells only through a marketplace that certifies it collects the tax does not need a Texas permit (Texas Comptroller).
What are the economic nexus thresholds in California, Texas and New York?
California: over $500,000 in the current or preceding calendar year (CDTFA). Texas: the safe harbor ends once revenue in the preceding twelve months passes $500,000 (Texas Comptroller). New York: over $500,000 and over 100 sales in the preceding four sales tax quarters (NY DTF).
Does inventory in a California warehouse create nexus?
Yes. CDTFA lists maintaining inventory in California as physical presence (CDTFA). That applies apart from the sales threshold.
How long must I keep resale certificates in Texas?
Four years. Texas says a properly completed Form 01-339 should be kept in the seller's records for four years (Texas Comptroller FAQ).
Sources
- Texas Comptroller, Remote Sellers
- New York State Department of Taxation and Finance, Registration requirement for businesses with no physical presence in New York State
- CDTFA, Use Tax Collection Requirements Based on Sales into California Due to the Wayfair Decision
- Amazon, Marketplace Tax Collection
Fees and rules in this post are as of October 2026.
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