Tax compliance is one of the most confusing aspects of running an online store. With different rules across states and countries, it’s easy to get overwhelmed.
Sales Tax Basics
In the US, you only need to collect sales tax in states where you have ‘nexus’ — a physical or economic presence. The 2018 South Dakota v. Wayfair ruling expanded this to include economic nexus based on sales volume.
VAT for International Sales
Selling to the EU? You may need to register for VAT in each country where you exceed the threshold. The EU’s One-Stop Shop (OSS) system simplifies this by letting you file in one country.
Tax-Inclusive vs Tax-Exclusive Pricing
US stores typically show prices before tax, while European stores include VAT in the displayed price. Your eCommerce platform should support both models.
Leave a Reply