Dropshipping - items ordered and shipped within USA - UK business - do I have to charge sales tax?

[missklj]

Hello all, I am new here!

I am a UK artist, based in the UK and would like to sell art prints to USA customers.

To keep shipping costs down for my US customers, I have found some printers that print in the USA then ship from there directly to the US customers.

All transactions are via my UK based website. I am a small turnover business (not liable for VAT).

I charge a fee for the product, then buy the product from the US supplier, keeping the profit.

My supplier charges me a US sales tax on base price I pay for the product, that is shipped within the USA.

As I am based in the UK but the product never comes here, am I liable to charge any US state sales taxes to the customer at the point of sale (and then somehow report / pay those to each state?)? I was reading about sales nexus but found it quite confusing.

My trade volumes would be very low, probably less than $100 per year per state.

I have been given some conflicting advice about this so would welcome any clarity.

Many thanks

 

[contiukecom]

Hello,

Unfortunately I do not have a clear answer for you.

But I am also very interested in this.

I sold in the US through Amazon FBA with a limited company based in the UK. It was as you suspected a real headache. I closed that business a few years ago but now I would like to start an e-commerce and my fear of selling in the US is the same as yours.

Did you get any answers?

Many thanks

 

[Louis @ 3PLUSA]

Hello all, I am new here!

I am a UK artist, based in the UK and would like to sell art prints to USA customers.

To keep shipping costs down for my US customers, I have found some printers that print in the USA then ship from there directly to the US customers.

All transactions are via my UK based website. I am a small turnover business (not liable for VAT).

I charge a fee for the product, then buy the product from the US supplier, keeping the profit.

My supplier charges me a US sales tax on base price I pay for the product, that is shipped within the USA.

As I am based in the UK but the product never comes here, am I liable to charge any US state sales taxes to the customer at the point of sale (and then somehow report / pay those to each state?)? I was reading about sales nexus but found it quite confusing.

My trade volumes would be very low, probably less than $100 per year per state.

I have been given some conflicting advice about this so would welcome any clarity.

Many thanks

That's a good question, it's most likely that your supplier is being charged sales taxes by the state they are located on for the service they are offering you and therefore including those charges back to you. There are states here that have no sales taxes like Delaware Oregon and New Hampshire. I advise most UK offshore online sellers not to worry about sales taxes here on the merchandise they sell online and ship direct from their fulfillment centers in the US. Under US law, they are suppose to register their businesses here. But in reality, the US Government has to go after about 10,000,000 chinese online merchants 1st, before they chase UK online merchants to comply with our laws

 

[contiukecom]

Hi Louis,

Many thanks for the input. It makes sense.

So, would you say then that legally if I dropship a product from China to California, being my business in the UK, I would have to pay sales taxes for selling that item in California? +maybe customs?
I find that very complicated!

 

[Louis @ 3PLUSA]

Hi Louis,

Many thanks for the input. It makes sense.

So, would you say then that legally if I dropship a product from China to California, being my business in the UK, I would have to pay sales taxes for selling that item in California? +maybe customs?
I find that very complicated!

Your most likely subject to customs duties if you import in bulk from China to USA. That is the law but then again the Chinese are masters are not obeying US law. If the product your selling from the UK sourced in China and delivered to customer in USA is $ 800 or less, then custom duties are 0% by law.

 

[Louis @ 3PLUSA]

in your web browser to "www" nvinc "dot" com , read the information on ecommerce selling in USA. I would not lose sleep over this as there are 10-20 million Chinese Online sellers that have not not been abiding by US law when it comes to distant selling online in the American Marketplace. Why should you abide by US law, when 10-20 million Chinese online sellers have been ignoring it for the past 10 + years.

 

[contiukecom]

Many thanks for the answer!
That’s helpful.

 

[pentel]

Why should you abide by US law, when 10-20 million Chinese online sellers have been ignoring it for the past 10 + years.

Because The UK will help the USA unlike China which will help its citizens avoid complying

 

[Mister B]

Why should you abide by US law, when 10-20 million Chinese online sellers have been ignoring it for the past 10 + years.

I cannot believe that you have said this.

Action is taken across all sellers and not just the Chinese. We used to sell over there, followed all of the rules but overlooked one small thing. The IRS came for us and fined us US$40k which we then had to spend a small fortune fighting. Fortunately for us, we had the foresight to employ a good accountant before they came for us so we were well placed at the offset.

So, please don't tell people to break the law, it does no one any good at all. The more people that comply the more resources the authorities can use to fight the bad guys.