How to Start a Business in The USA by MyUSACorporation - HTML preview

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You will find a good CPA (accountant) who will handle your sales tax filing as well as your income tax filing. You can try doing it on your own, but we don’t recommend it.

 

Q. My business is registered in one state, but my dropshipper is in another. They want me to show sales tax registration in their state - how do I do it?

 

Almost all states have procedures to obtain sales tax permit without having to register the company as "foreign entity". It is usually called "out-of-state vendor ID" or something of the kind. We help with these permits as well.

 

Keep in mind though, if your dropshipper is also the one processing the payment then they will be collecting sales tax and reporting it to the state themselves, so you don’t really need to obtain your own permit in case like this.

 

Q. I want to buy products in the U.S. and sell them in my country - do I need to register for sales tax?

 

Obviously you don’t need to collect sales tax in the U.S. on these sales, but you might need to

collect some sort of VAT tax in the country were you sell, so check the rules there.

 

However, the real question is this - can you buy from U.S. vendors without having to pay sales tax on these purchases (in wholesale)? The answer is yes, provided you obtain sales tax ID. That’s why it’s also called "reseller permit" - you want to resell the products you buy at wholesale, to the end users, without being considered end user yourself. Check with a CPA if the state in which you obtain the permit requires you to file zero tax reports.

 

Q. How do I report sales tax in all the states I am registered in?

 

Just as you do in one state - have your CPA file reports in each state you are registered in for sales tax, and cut checks for each state (or pay online, whatever the procedure is).

 

Q. Do I need to register as foreign entity in states where I am registered to collect sales tax?

 

Not necessarily. We distinguish the two cases as "soft nexus" and "hard nexus" (this is not official designation, we just like to call it this way).

 

"Soft nexus" has to do with connection strong enough to require you to register for sales tax (for example, if your have a dropshipper who ships from a specific state), which is usually done with state’s taxation department (or it’s equivalent), but not strong enough for registration with Secretary of State (or whatever authority registering companies in the given state).

 

"Hard nexus" is when you have physical connection to a state, for example if you have an office, warehouse, employees, or if you are managing the business from this state and are physically located there.