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Do International Sellers Registering for Sales Tax Need a U.S. EIN?

author photo of Sylvia F. Dion

Are you a seller located outside of the United States that sells or plans to sell to U.S. customers? If so, you probably have many questions about the U.S. tax requirements that apply to international businesses. And if you are particularly concerned about how our sales tax laws apply to international (non-U.S.) businesses, then you’ve come to the right place! Helping international businesses understand U.S. sales tax is exactly what we try to do here at the “U.S. Sales Tax for Foreign Sellers” blog.

You see, I know that international businesses, especially international sellers, have many questions about doing business in the U.S. And so the topics that I write about are often based on issues that I am advising my own international clients on or on questions that I receive from international sellers (such as from sellers who post comments at my posts here at SalesTaxSupport).

For instance, I often receive many questions from international Amazon FBA sellers. Because I wanted to address those many questions I wrote a blog post about U.S. Sales Tax for Amazon FBA International Sellers. In that post, I explained that using Amazon’s Fulfillment by Amazon (FBA) service creates a physical presence or “nexus” to those states where an FBA seller’s inventory is located and fulfilled from and as result, creates a legal requirement to charge and collect sales tax on sales to customers in the “nexus” states.

Then because many international sellers wanted to know how to “register” with the states so that they could operate in accordance with the U.S. sales tax laws, I wrote a blog post on 3 key issues that International Sellers should know about the U.S. sales tax registration process.

So, in today’s blog post I am once again writing about a topic that I receive many, many questions about. Actually, I receive questions on this topic almost daily! The question I'll be addressing in this blog post is whether an international seller must obtain a Federal Employer Identification Number (also called an EIN or FEIN) from the U.S. Internal Revenue Service (IRS). And while today’s topic is not about U.S. sales tax specifically, it is very important topic that international sellers need to be aware of if they sell goods to U.S. customers and find that they are required to register to collect sales tax.

What is a Federal Employer Identification Number and Does an International Seller Need One?

In my last post on 3 key issues I explained that an international seller is not required to form or incorporate in the U.S. in order to register with the various states. An international seller may sell through their foreign registered entity – and the foreign entity can apply for a sales tax permit or business license with the various states. Remember – an international seller that has “nexus” to a state (such as an international seller that uses Amazon’s FBA service) is required to register to collect sales tax. However, in order to register, almost every state requires the registering entity to have a Federal Employer Identification Number (EIN). Note that though it is called a federal “employer” identification number, there is no requirement that the applying entity be an actual employer.

An EIN is nine-digit taxpayer identification number assigned to entities such corporations, partnerships and limited liability companies, and may also be assigned to sole proprietors, estates, trusts, and other entities for tax filing and reporting purposes. State agencies use the EIN to identify the registering entity while they process an entity’s application for a state sales tax permit or business license – since the state has yet to assign its own state taxpayer number (and yes, an entity will have different number assigned to it by each state it registers with). So to answer the question about whether an international seller must obtain an EIN – if an international seller wishes to apply for a sales tax permit or business license, the seller must have an EIN.

How to Apply for an EIN

An international seller can apply for an EIN by completing Federal Form SS-4, Application for Employer Identification Number. While it is not possible to provide an in-depth explanation of exactly how to complete Form SS-4, careful consideration should be given to the questions that are asked and information that is requested on the Form because international sellers may need to respond to the various questions on Form SS-4 in a certain way. Therefore, if may be wise to seek the assistance of a U.S. tax advisor experienced in working with international clients or to contact the IRS international taxpayer assistance line at +1-267 941-1099. An international business that does not have a principal place of business or principal office in the U.S. can apply by mailing or faxing the completed SS-4 to the mailing address or the fax number listed on page 2 of the instructions to Form SS-4 (they cannot use the online SS-4 registration process). However, if an EIN must be obtained immediately, an international taxpayer (or a third party designee such as their tax advisor) can also obtain a same-day EIN by completing Form SS-4 and contacting the international taxpayer assistance line.

Concluding Thoughts and Other Important Points to Keep in Mind

International sellers that are considering selling goods to U.S. customers (or that may already be selling to U.S. customers) should keep in mind that they are subject to the U.S. sales tax laws which may require them to register to collect sales tax in states where they have nexus. However in order to register with the various states, a business must obtain an EIN from the U.S. Internal Revenue Service.

In this post I’ve touched on the requirement to obtain an EIN and the proper form to use to apply. However, there is so much more that international sellers should know - such as whether an international seller may be subject to federal taxes (yes, they could be) or be required to file additional returns or forms (yes, there could be a requirement to submit additional IRS filings), or whether an international seller may be subject to other types of states taxes, such as state income, franchise, or gross receipts taxes (yes, other types of state taxes may apply).

So please note, that it is important to realize that there are many more considerations than just sales tax – which is why I’ll cover more of these topics in future posts. In the meantime, if you have questions or would like to recommend a topic for a future blog post, please feel free to leave a comment below.

About the Author: Sylvia F. Dion, MPA, CPA, is the Founder and Managing Partner of SALT Consulting firm, PrietoDion Consulting Partners LLC. Sylvia has been covering Internet Sales Tax developments for SalesTaxSupport’s Issues blog since 2011. Sylvia is also the “U.S. Sales Tax for Foreign Sellers” contributor for SalesTaxSupport’s Industry blog and the “Massachusetts Sales Tax” contributor for SalesTaxSupport’s State blog. You can follow Sylvia on twitter and on Google+ and can contact Sylvia via e-mail at sylviadion@prietodiontax.com or at 978-846-1641.

Comments or questions may be submitted by using the on-page "Comment" feature, subject to disclaimer at bottom of page. Other contact options (and Consultation Requests) are also available on Sylvia's associated Firm Profile page.

Other recent “U.S. Sales Tax for Foreign Sellers” posts by Sylvia F. Dion, CPA:

NOTE: All blog content, comments, and participation subject to disclaimer at bottom of page.

Comments

51 Responses to Do International Sellers Registering for Sales Tax Need a U.S. EIN?

  • Posted by Manuela on August 11, 2017 12:04am:

    Hi Sylvia,
    Hope you can help me with my question. I hope is not too late to ask. I am an international student from Colombia currently studying here in the US in the state of Washington. I plan to start selling on Amazon but I don't have an established business yet. As a student I received a SSN which can be used only with dhs authorization. I have a bank account because my university lets me work part time and I also have a credit card with a bank here. Can I obtain an EIN in order to file taxes on Amazon using my SSN? Is that going to have any complication with my visa? I don't want to lose my student status by using my SSN incorrectly. Or is it better if I open a bank account in my homecountry (Colombia) and have my amazon sells revenue be deposited directly there so I file taxes there instead of in the US? What's the best decision? Thank you so much!

    • Posted by Author photo of Sylvia F. DionSylvia Dion on September 22, 2017 9:40pm:

      Manuela, Thank you for reading my blog post and your question/comment. Before you start to sell on Amazon, I would strongly advise you to seek the guidance of an lawyer who is experienced with F-1 Visa compliance. Even though you are allowed to work on a part-time basis with an F-1 Student Visa, you cannot be a business owner or run a business while you are on a F-1 Visa. I hope this helps.

  • Posted by David on July 19, 2017 11:08am:

    Hola Sylvia cómo estás

    Mi nombre es David espinal soy dominicano tengo una compañía constituida aquí en Santo Domingo y quiero empezar un negocio de dropshipping en Estados Unidos y necesito un EIN. Y resulta que voy a estudiar en la universidad en new York con una visa de estudiante, la pregunta es la siguiente no tendría problema con el IRS siempre y cuando mantenga las transacciones a un banco local en República Dominicana. Muchas gracias de antemano y si pudieras dejarme algún mail donde te pueda contactar. Gracias

  • Posted by Mic on June 20, 2017 12:57am:

    Hi Sylvia, I am from the UK and I am trying to sell on Amazon. I followed the advice I read and I obtained an EIN number. But Amazon have stated this is not correct, even though I am an individual and not an "organization" they now state the following error message when taking their tax interview;

    "Based on your prior inputs, an ITIN or SSN would be expected, but you have provided an EIN. Generally, EINs are issued to businesses and organizations. Your prior input for Type of Beneficial Owner is an Individual and not a business or organization. You can either provide the ITIN or SSN of the individual who is the beneficial owner, or if the beneficial owner of the income is a business or organization, please update your previous inputs."

  • Posted by Lucy on June 19, 2017 5:45am:

    Hello Sylvia,

    Thanks a lot for the useful information as this issue is quite complicated.
    My questions is that as a UK resident planning to dopship in the US, to US residents only using US based dropshippers, I have no nexus in any of the states but I anticipate the dropshippers will have in the states they are based. What is my position then? Do I need to have a tax ID number? Do i need to register an LLC in the US? I assume I will have to pay tax here in the UK which I can find out about i just want to know what is required of me in the US.

    Thanks

  • Posted by Irene on May 8, 2017 4:40pm:

    I have an EIN linked to a sole proprietor business outside the US. I want to ship goods from China to my US address (NOT AMAZON FBA).

    Can I use my EIN for this? (Ultimate Consignee)

    How will this affect my tax obligations?

    Will this be seen as working and receiving income in the US by IRS?

  • Posted by Sultan on April 6, 2017 2:27am:

    Hi Sylvia. Thanks for the informative post.

    I'd like to know if I need a local mailing address in the US in order to get an EIN. If yes, how do I go about getting one? I've no presence or place of business in the US. I'm an international seller located in India planning to sell through Amazon FBA. TIA

    • Posted by Author photo of Sylvia F. Dionsylviadion on May 6, 2017 9:38pm:

      Sultan,
      Good day and thank you for your comment/question.

      You'll be happy to know that you do NOT need to have a US address in order to obtain an EIN. The address that you use when obtaining your EIN should be your actual business and mailing address (in your home country). There are virtual office companies in the US that offer a US address (often these companies will receive your mail and scan/forward it to you) but it is not necessary to engage once of these services. You can call the IRS International Taxpayer Assistance line at +1 267 941 1099 for more assistance.

      Thank you again.

  • Posted by Nikita on February 14, 2017 8:51pm:

    Dear Slyvia, The post was quiet helpful. However it would be great if you could address one more concern that is still not quiet clear to me. I m a manufacturer based in India who wants to send my goods directly to Amazon to be sold to the ultimate customers in USA. Do i still require to obtain a Tax EIN? Since I am not intending to set up any entity or any other form in USA and i would be utilising FBA services, how would i be able to get a EIN? and is it mandatory to get a TAX ID.
    Regards,
    Nikita

  • Posted by J.w on February 1, 2017 8:19pm:

    Saludos silvia soy de venezuela
    me estaba registrando como vendedor individual en amazon , planeo usar el servicio de fba, pero me detuve en el paso 4 de los taxes, me registre como vendedor individual, no tengo itin como solicitare los permisos de venta como fba donde cree nexo? en venezuela tengo una pequeña empresa registrada con la que trabajo, que puedo hacer para obtener el numero itin? un contador me dijo que si se podia obtener y que le enviara copia certificada de mi pasaporte

    • Posted by Author photo of Sylvia F. DionSylvia Dion on February 2, 2017 7:54pm:

      Julio,
      Buen dia y gracias por leer mi blog y su pregunta.

      En general, el IRS sólo le emitirá un ITIN si personalmente tiene que presentar una declaración de impuestos de los Estados Unidos. El proceso para obtener un ITIN puede tomar muchas semanas. Además, no es necesario obtener un ITIN para registrarse para vender en Amazon y tampoco es necesario para registrarse para un permiso de impuestos de ventas en los estados donde su negocio tiene nexo (si utiliza el servicio Amazon FBA, tiene un requisito para registrarse en los estados donde se encuentra su inventario).

      Usted dice que usted está vendiendo como individuo - pero asumo que usted tiene un negocio que usted vende de (asumo que usted es autónomo). Si es así, entonces usted puede obtener un EIN para el negocio - que es mucho más fácil que tratar de obtener un ITIN.

      Espero que esta información sea útil.

  • Posted by San on January 25, 2017 10:59am:

    Hi Sylvia,

    Greta post! I am a Canadian permanent resident who recently moved to Canada from USA in 2016. I was on H-1B work visa in USA for 6 years so I do have a Type-2 Social Security Number which is valid only with US work authorization and I also have US bank accounts in the state of TX. I am planning to start a sole proprietorship here in British Columbia where I live and my business would be selling private label physical products on Amazon FBA by directly shipping products from China to Amazon FBA warehouses . I just have 3 quick questions as below:
    (1) Since I do have bank accounts in USA which I will be using to pay suppliers in China as well as taking profits from Amazon in, is there any limit on how much amount of profits earned through Amazon I can transfer every month from my US bank account to Canadian bank account to pay my rent and other personal expenses here without getting any red flags from IRS?
    (2) Since US-Canada have a tax treaty, do I get any benefit as a Canadian in terms of filing taxes?
    (3)Sometimes Amazon gives 3 different addresses to send goods imported from China. In that case, do I have to register for sales tax permit one-by-one OR Is there any service you provide wherein I can register for sales tax permit in ALL states once and for all for a flat fee?
    I would really appreciate your insights. Also what is the best number to reach your office? I understand that at this point you will be getting loads and loads of queries on your email so I believe it would be better to contact you via phone if I require any consultation. I don't mind paying a fee so would appreciate if you can provide details on it as well.

  • Posted by San on January 25, 2017 10:58am:

    Hi Sylvia,

    Greta post! I am a Canadian permanent resident who recently moved to Canada from USA in 2016. I was on H-1B work visa in USA for 6 years so I do have a Type-2 Social Security Number which is valid only with US work authorization and I also have US bank accounts in the state of TX. I am planning to start a sole proprietorship here in British Columbia where I live and my business would be selling private label physical products on Amazon FBA by directly shipping products from China to Amazon FBA warehouses . I just have 3 quick questions as below:
    (1) Since I do have bank accounts in USA which I will be using to pay suppliers in China as well as taking profits from Amazon in, is there any limit on how much amount of profits earned through Amazon I can transfer every month from my US bank account to Canadian bank account to pay my rent and other personal expenses here without getting any red flags from IRS?
    (2) Since US-Canada have a tax treaty, do I get any benefit as a Canadian in terms of filing taxes?
    (3)Sometimes Amazon gives 3 different addresses to send goods imported from China. In that case, do I have to register for sales tax permit one-by-one OR Is there any service you provide wherein I can register for sales tax permit in ALL states once and for all for a flat fee?
    I would really appreciate your insights. Also what is the best number to reach your office? I understand that at this point you will be getting loads and loads of queries on your email so I believe it would be better to contact you via phone if I require any consultation. I don't mind paying a fee so would appreciate if you can provide details on it as well.

  • Posted by San on January 25, 2017 10:58am:

    Hi Sylvia,

    Greta post! I am a Canadian permanent resident who recently moved to Canada from USA in 2016. I was on H-1B work visa in USA for 6 years so I do have a Type-2 Social Security Number which is valid only with US work authorization and I also have US bank accounts in the state of TX. I am planning to start a sole proprietorship here in British Columbia where I live and my business would be selling private label physical products on Amazon FBA by directly shipping products from China to Amazon FBA warehouses . I just have 3 quick questions as below:
    (1) Since I do have bank accounts in USA which I will be using to pay suppliers in China as well as taking profits from Amazon in, is there any limit on how much amount of profits earned through Amazon I can transfer every month from my US bank account to Canadian bank account to pay my rent and other personal expenses here without getting any red flags from IRS?
    (2) Since US-Canada have a tax treaty, do I get any benefit as a Canadian in terms of filing taxes?
    (3)Sometimes Amazon gives 3 different addresses to send goods imported from China. In that case, do I have to register for sales tax permit one-by-one OR Is there any service you provide wherein I can register for sales tax permit in ALL states once and for all for a flat fee?
    I would really appreciate your insights. Also what is the best number to reach your office? I understand that at this point you will be getting loads and loads of queries on your email so I believe it would be better to contact you via phone if I require any consultation. I don't mind paying a fee so would appreciate if you can provide details on it as well.

  • Posted by nekeita on January 23, 2017 9:40am:

    hi sylvia, i have been reading through some of your blogs, and they have help me . i have a question to ask of you, i am an international seller, i have recently move the business to an online entity , but now my suppliers are asking for a sellers permit for the US, my question is do i have to register the business in the US to get one?

  • Posted by Ronald on January 9, 2017 2:09am:

    I am a US citizen living in Germany. I wish to drop ship from US based companies to US based adresses. Do I need a state tax registration? Do I need an EIN? If so, do I use W-8 or W-9? thanks ahead of time.

    Mac

  • Posted by Winnie on September 16, 2016 4:43pm:

    Hi Sylvia,
    I am a permanent resident in Canada, and would like to sell products on Amazon US market as sole proprietor. I used to have a SSN when I studied in the US as an international student 6 years ago(2010), but I lost my SSN card. Should I fill my SSN number when obtaining an EIN number? What's the point for getting an EIN with and without a SSN for a foreign seller claiming an exemption from withholding policy? Thanks for your response in advance.

    • Posted by Author photo of Sylvia F. DionSylvia Dion on October 2, 2016 3:49pm:

      Winnie,
      Thank you for your question/comment.

      If you have an SSN (even if you no longer have the card), you should use it when filling out Form SS-4. If you obtain the EIN through the IRS international taxpayer assistance line (+1-267 941-1099), the IRS agent will ask you if you have an SSN and you should truthfully provide it. If you plan to sell on Amazon.com and use the FBA service, you will need the EIN for sales tax registration purposes.

      I hope this was helpful.
      Sylvia

  • Posted by Roger on May 10, 2016 8:12am:

    Dear Sylvia
    We plan to have a direct Business (selling furniture) with a NY based end-customer.
    Is a sales tax (or any other tax) applicable for direct Business?
    As far as I know it's not - but you're the professionel. :-)
    Many thanks and
    best regards

    • Posted by Author photo of Sylvia F. Dionsylviadion on June 8, 2016 7:50pm:

      Roger,
      Thank you for reading my post and your comment/question.

      Whether your business will need to collect and pay New York sales tax or any other tax is based on whether your activity in New York creates nexus in New York. This is a complex topic and therefore, I cannot give you an absolute answer in a reply - however, simply having one customer in New York might not be enough to give your company nexus in New York. Hope this helps.

  • Posted by Mike on February 2, 2016 3:14am:

    Hi Sylvia,

    Thank you for the great content on your blog which has really helped me. I am based in the UK and would like to clarify a few points pertaining to the Sales Tax Registration process:

    1) Would any of the States require me to incorporate in the USA if I have a UK Limited Co?
    2) Does it take longer to obtain registration for a Limited Company, as opposed to a partnership or sole trader?
    3) If I initially registered for sales tax as a sole trader, could I later convert to a Limited company?
    Thank you so much for your guidance.

    Mike

    • Posted by Author photo of Sylvia F. DionSylvia Dion on February 5, 2016 9:10pm:

      Mike,
      Thank you for reading my post and for your kind comment. I work with foreign sellers (mostly Amazon FBA sellers) from many parts of the world (including many from the UK). About 98% of my foreign Amazon selling clients sell through their foreign entity (they do not form a U.S. entity - it is not a requirement to sell/do business in the U.S.). It takes longer to register as a foreign entity (the process is more complex/time consuming) than it does for a U.S. entity. If you register for a sales tax permit/business license as a sole proprietor but later form a Ltd to run your business from, the registration process will need to be completed again. as the sales tax permits/business licenses are not transferable. I hope this helps.
      Thank you again.

      • Posted by Mike on February 25, 2016 9:34am:

        Hi Sylvia,

        Thank you so much for your guidance - it's really appreciated! I have now formed a UK private Limited Company with 2 directors. Would that equate to a 'Profit Corporation' in the USA or would it be this be equivalent to a 'Profit Limited Liability Company (LLC)? I've read both definitions and would say the 'Profit Corporation' is the nearest as it refers to an organisation chartered by law and recognised as having a legal existence as an entity separate from its owners, which operates under the direction of duly elected officers. Am I correct to correlate UK Private Limited Company to Profit Corporation? I really hope you can clarify this point for me. With appreciation. Mike

      • Posted by Mike on February 8, 2016 3:02am:

        Thank you Silvia for your very helpful response which certainly clears away a lot of the bureaucratic 'fog'. I wonder if I might trouble you to clarify one further point please ..... If I register for sales tax as a UK Ltd company, would I need an ITIN (as the Company Director completing the form) as well as an FEIN?
        Thank you in anticipation.
        Mike

        • Posted by Author photo of Sylvia F. DionSylvia Dion on April 24, 2016 8:40am:

          Hello again Mike, Sincere apologies for the delay on this final question. Many U.S. sales tax advisors who are NOT knowledgeable in dealing with foreign sellers will tell you that you must obtain an ITIN. However, you do not need to obtain an ITIN - HOWEVER, the registration process is more time consuming, takes longer and can't be completed online like it can be for a U.S. entity. I cover this a little in my prior post: http://www.salestaxsupport.com/blogs/industry/us-sales-tax-for-foreign-sellers/international-sellers-and-u-s-sales-tax-registration/

          Thanks again for the kind comments.

  • Posted by Harry on January 29, 2016 2:18pm:

    I am a UK resident and planning to sell on Amazon US - FBA and Canada both FBA and merchant fulfilled.

    If i store goods at amazon in the usa for FBA ....do you know if the IRS class you still under a W-8BEN (Cert of foreign Status of beneficial owner for Unites States Tax Witholding) OR would they recognise you as a business located there? And then have to register as a business and pay tax there?

    And also for Canada...is there special forms i need to complete to register to sell there...firstly as non fba...then FBA?

    • Posted by Author photo of Sylvia F. DionSylvia Dion on February 6, 2016 6:59am:

      Harry, Thank you for reading my post and your comment. First, I should explain that the W-8BEN is not a classification The W-8BEN (or W-8BEN-E for an entity) is an IRS Form that Amazon will require you to complete (as part of the Amazon Tax interview in the seller account set up process) Amazon must obtain this form from you so that Amazon can be in compliance with its own IRS reporting requirement. You see, Amazon, as payor, is required to withhold on payments it makes to foreign sellers UNLESS Amazon has a W-8-BEN (or W-8-BEN-E) on file. Also, the W-8-BEN is not an “exemption” certificate from U.S. taxes. If you sell on Amazon.com as UK resident or through a UK entity (such as a LTD), then you would complete the W-8BEN or W-8BEN-E form. Whether you will have to pay US taxes is a different and complex topic - and is impacted by the US-UK tax treaty. To sell on the Amazon.ca (Canadian Amazon) platform, you need to register with the Canada Revenue Agency (CRA) and obtain a Business Number, Import-Export account and GST/HST account. I hope this helps. Thanks again!

      • Posted by Harry on February 6, 2016 7:13am:

        Thanks Sylvia

        1. What to you suggest would be next step to be compliant about income tax after registering with Amazon.com and w8 form. Do you provide any support on this.

        2. Could you redirect where I can find more information about Canada ? Do you provide any support on this ?

        • Posted by Author photo of Sylvia F. Dionsylviadion on February 6, 2016 8:07am:

          Harry, Thank you for asking :) In addition to blogging here at SalesTaxSupport, I am a CPA and tax advisor, One of main of services is assisting and advising foreign (non-U.S.) Amazon sellers with understanding and complying with all of their U.S. tax requirements. I work with Amazon FBA sellers from many parts of the world, including from Asia, Australia, Canada and Europe. My firm handles everything from advising on the tax considerations of doing in the United States, obtaining an Employer Identification Number (EIN) for the foreign business, registering the foreign business for sales tax collection purposes, filing the required sales tax returns, advising and filing other types of state tax returns (and yes, a foreign company may be required to pay other types of state taxes), and to advising on U.S. federal tax issues. So if you are interested in my services, please let me know. I am also now handling the Canadian registrations and filings for my foreign (non U.S./ non Canadian) clients. Hope this helps.

          • Posted by Mahaveer on July 16, 2016 12:51pm:

            I need your professional services and advise on starting an Amazon FBA based business. Please contact me to take it further.

          • Posted by Prabhat on February 6, 2016 8:23am:

            Hi Sylvia

            Definitely interested. Could you email me with next steps please ?

            Many thanks for a quick reply. Much appreciate it

  • Posted by Jon on January 26, 2016 2:22am:

    Hi Sylvia,

    Firstly, thank you for these wonderful articles.

    I have a question:

    - I am planning to incorporate in Canada, but since my business will sell exclusively to the US market, would it be better to incorporate in the United States as an LLC?

    I've heard conflicting opinions on this question, as some say it is always easier to incorporate in your home country.

    I am a Canadian, starting an e-commerce business that will sell products manufactured in China and private label products (soaps, etc..) that would be manufactured in the US. I will use Amazon FBA.

    Thanks!

    -Jon Yorg

    • Posted by Author photo of Sylvia F. DionSylvia Dion on February 6, 2016 7:26am:

      Jon,
      Thank you for reading my post and for your very kind comment. In addition to blogging here at SalesTaxSupport, I am CPA and tax advisor. I work with many foreign companies and advise on issues such as whether creating a U.S. entity to conduct their U.S. business is beneficial. Although I can't advise you in a blog comment reply, I can give you general guidance which is that you are not required to form/establish a U.S. LLC to conduct business in the U.S. and if your foreign entity is formed/established in a Treaty county, then the Treaty may protect your foreign entity from U.S. taxation - thus further eliminating the need to form a U.S. LLC. If you are looking for a U.S. tax advisor, feel free to contact me at sylviadion@verizon.net

  • Posted by Pallavi on January 23, 2016 11:23pm:

    Hi Sylvia,
    Thank you for your articles, they are extremely helpful and probably one of the most detailed I've found so far on the web.
    I am a start-up based out of India. Our products are made and stored here and will be shipped directly to our customers from here. Do we still need to pay sale tax?
    My understanding from your articles is that in our case we dont have a nexus (ie. Aren't storing inventory, selling through a local network) in the states so we won't need to, is that correct?
    Thanks

    • Posted by Author photo of Sylvia F. DionSylvia Dion on February 6, 2016 7:41am:

      Pallavi,
      Thank you for reading my post and for your VERY kind comment. The requirement to charge, collect and remit (pay) sales tax to the state governments is based on whether a foreign company has nexus. If your product is entirely fulfilled from India and you have no U.S. representation (offices, employees, contractors, sales agents, etc.), then you most likely do not have nexus in any State and would not be required to collect sales tax. But please note that nexus is a complex topic - and you can create nexus by never stepping foot in a state: http://www.allbusiness.com/five-things-smbs-need-to-know-about-state-tax-nexus-7885-1.html I hope this helps. Thanks again.

  • Posted by Hector on January 14, 2016 12:27pm:

    Hola Sylvia, muchas gracias por compartir esta información. Supe de ti gracias a que el equipo de Taxjar.com me canalizó contigo.

    Vivo en México y vendo en Amazon USA usando el programa FBA desde hace varios meses.

    En México estoy registrado como Persona Física con Actividad Empresarial (no he constituido una empresa como tal). Y de la misma manera estoy registrado en Amazon.

    Gracias a tus posts previos entiendo que debo pagar impuestos por las ventas ya que tengo Nexos con varios Estados de USA y que es necesario obtener los números de registro de cada Estado de manera individual.

    Es aquí en donde me encuentro atorado.

    En tu post veo que, para obtener los números de registro de los Estados, debo antes obtener un EIN.

    Pues bien, estuve revisando el proceso para obtener el EIN y me encuentro con que, en el formato que debo llenar, me solicitan el SSN, ITIN o EIN del "Name of Responsible Party" (8a-b). ¿Es indispensable este campo?

    Por ello, revisé el proceso para obtener el ITIN, el cual encuentro tardado y complejo.

    Leyendo las respuestas que amablemente has dado a preguntas previas, veo que para una empresa constituida en el extranjero es muy sencillo obtener un EIN, no así el ITIN.

    Mi duda entonces es: me recomiendas registrar una compañía en México (SA de CV) para poder obtener el EIN de forma más sencilla?

    Muchas gracias de antemano!

    • Posted by Author photo of Sylvia F. Dionsylviadion on January 24, 2016 8:12am:

      Héctor,
      Gracias por leer mi artículo y por su comentario amable. Ahora, para responder a su pregunta. Como usted sabe porque está utilizando el servicio de Amazon FBA, usted tiene un "nexo" o una conexión que requiere su negocio a inscribirse en la recaudación de impuestos de ventas con los estados donde tiene su producto. Y para hacer esto, usted debe obtener el EIN. Sí, es más fácil obtener el EIN par una entidad y también es más fácil registrarse en los estados como una entidad. No es necesario establecer una entidad americana. Yo trabajo con muchos clientes extranjeros de todo el mundo - y 95% de mis clientes extranjeras venden en Amazon.com a través de su entidad extranjera. (He registrado la entidad extranjera con los estados.) Así que, sí, formando una entidad mexicana para obtener el EIN y para registrarse con los estados sería mejor que hacerlo como individuo extranjero. También, usted no es elegible para un ITIN. Tengo un cliente de Noruega que estaba trabajando con otro consultor que le dijo que debia obtener un ITIN. Aplicó para un ITIN cuatro veces y cada vez fue rechazado. Por último, el otro consultnt le dijo que debería trabajar conmigo. Usted no es elegible para un ITIN. El IRS es muy estricto y no le emitirá un ITIN si usted no es elegible. Espero que esto ayude. Por favor, hágamelo saber si usted tiene alguna pregunta o está interesado en una consulta (soy de la herencia mexicana y puedo realizar consultas en español).
      Gracias de nuevo.

  • Posted by John on December 29, 2015 3:05am:

    Hi Sylvia,

    Thank you for taking your time to write such an awesome post.

    I'm a Hong Kong residence and looking into selling in Amazon using FBA. I know for a fact that Hong Kong and the US have not signed the tax treaty so I would be subject to double tax. I'm thinking of forming a BVI company solely for doing the FBA business in the US.

    Do you think a non US resident owner of a BVI company would need to pay income tax in the US?

    Thanks you and look forward to hear from you

    Best regards,
    John

    • Posted by Author photo of Sylvia F. Dionsylviadion on January 23, 2016 8:49pm:

      John,
      Thank you for reading my post and your kind comment. While I cannot give you tax or legal advice in a blog comment, I can give you general guidance. Basically, a foreign entity that sells on Amazon could be considered to be engaged in a U.S. trade or business and could be considered to have U.S. Effectively Connected Income (ECI). If the foreign entity is a resident of (domiciled in) a country that does not have a tax treaty with the U.S. then there is no treaty protection and double taxation could occur. If yu are planning on establishing a business selling on Amazon.com, I would highly advise speaking to a tax advisor either in Hong Kong or the U.S. that can explain the tax implications of doing business in the U.S. (I do consult in this area). Thanks, Sylvia

      • Posted by Tom on April 21, 2016 3:19am:

        Hello Sylvia, I have read all the comments on your fantastic blog. It is very informative. I wanted to confirm my understanding of U.S. Effectively Connected Income (ECI) - from my understanding of reading the law on this, one would have to have an office or sales staff in the USA in order to be considered having ECI. The exact text from the IRS : 'own and operate a business in the United States selling services, products, or merchandise'. If we (a company) need to register for sales tax with an EIN, we would not want to automatically be considered to be doing business in the USA and therefore liable for federal tax also.
        Thanks Sylvia.

        • Posted by Author photo of Sylvia F. Dionsylviadion on May 9, 2016 7:48pm:

          Tom,
          Thank you for reading my post and for your kind comment. Also thank you for your question.

          First, it is not necessary to have an office or sales staff in the U.S. to have U.S. Effectively Connected Income. Conducting a U.S. Trade or Business - even if conducted from overseas - could still constitute U.S. ECI. However, a foreign entity CAN have U.S. ECI and not be subject to U.S. federal taxation. For instance, a foreign entity from a country that has a tax treaty with the U.S. will not be subject to U.S. taxation if their U.S. activity does not rise to the level of a U.S. Permanent Establishment (PE) - even if they have U.S. ECI. Also obtaining an EIN in order to register for sales tax will not in itself, subject your foreign entity to U.S. taxation - that will be determine by the factors I just mentioned (e.g., creating or not creating a U.S. PE).

          This is complex topic so I would advise seeking the guidance of a tax advisor in your country or in the U.S. that can properly advise you (I do consult in this area).

          Any other questions, please let me know.
          Sylvia

  • Posted by antonio on December 14, 2015 3:03am:

    Hello Sylvia, thank you for the great information.
    I recently obtained an EIN number with a simple phone call to the IRS: I provided details of a "Company" that technically doesn't exist yet (E.g. "XYZ Trading LLC"), using my home country address as business address plus a mail box address in the country I'm actually living. In the reality I'm just an Individual, and I provided my "Company" name only to be the same as my AMZ Store name. I was also considering to file for a US Company but I'm now re-considering doing such thing. Could this EIN number still be valid to registering for State tax? What's exactly the definition of "foreign entity" for tax purposes? Will the State authorities, IRS or Fed.Govt. actually make sure that my "non" entity actually exists in my Country? I likely did a mistake with this issue, hopefully nothing I can't fix. Thanks for any input you may have. Regards

    • Posted by Author photo of Sylvia F. Dionsylviadion on December 15, 2015 6:38am:

      Antonio, Thank you for reading my blog article and for your comment.

      Unfortunately, this was not a good approach. I have spoken with several foreign sellers who have done something similar and it’s just created numerous problems. First of all – when you provide that information to the IRS you are providing information that is expected to be truthful (when you actually fill out IRS Form SS-4, which asks for the same information that you provided in the interview, you are required to sign Form SS-4 under penalties of perjury). Also, by obtaining the EIN you have created a requirement to lodge (file) a U.S. federal return. Depending on what you communicated to the IRS, a specific type of return will be due – you may need to lodge a 1040, 1040NR, 1065, 1120F (which is why it is a good idea to actually fill out the SS-4 – so that you have a record of what the IRS entered for your entity). The IRS should have mailed formal correspondence to your address on file telling you what filings are due and by when. You ask if you can use this information for state registrations. On the state registrations you must provide the “legal entity” name and state/country of formation. Here again, when you submit a state registration you must sign it under penalties of perjury saying that the information on the registration is true and valid. Since you really don’t have this legal entity, you’ll be filing false registration. So, I hate to be bearer of bad news, but this was not a good approach. If you are interested in an actual tax consultation, please let me know. You can find my contact details at my bio page under the blog title above.

  • Posted by marco on November 5, 2015 11:29am:

    Hi Sylvia, thanks for sharing this great content with everybody. I have a company in the Netherlands and I am planning to sell my products on Amazon.com trough FBA. I understand I need a federal id number to do my sales taxes.
    Does a FEIN entail other obligations? I know getting a FEIN will cost about 700 usd. But I would like to know what other things i will face when selling in the USA through FBA as a foreign seller and do I have to do a yearly reporting?
    I have nice products to sell but would like to know what i am facing when starting this adventure.

    gr Marco

    • Posted by Author photo of Sylvia F. Dionsylviadion on November 8, 2015 7:37pm:

      Marco,
      Thank you for reading my post and for your comment. To answer your question, yes, when you obtain an EIN this will create an obligation to file a federal tax report and possibly pay federal taxes. Whether you would owe federal taxes is a complex issue which is based on many factors - including whether there is treaty protection. Also, in addition to sales tax, there could be other state taxes imposed on your business. Yes, there is much to consider. Finally, there is no cost to obtain an EIN from the IRS. As I explain in the post above - an IRS Form SS-4 must be prepared and submitted to the IRS - but the IRS does not charge for this. Please let me know if you have any other questions.
      Sylvia

  • Posted by Eileen on October 8, 2015 11:38pm:

    Thank you for all this great information- to be honest - the whole US tax situation is quite daunting and it is really helpful to read your posts.
    I am about to become an international seller with Amazon FBA and my question is as follows-
    I understand that by virtue of the way FBA works- I will be establishing nexus in various states and therefore required to pay sales tax, but will obtaining an EIN and an LLC make me liable for income tax as FBA does not establish PE status?

    • Posted by Sylvia on October 23, 2015 8:44pm:

      Eileen,

      Thank you for reading my post and for your question.

      You are correct in that using Amazon's FBA service will create nexus in the states where your inventory will be stored and fulfilled from. Technically, you (your business) would be required to collect sales tax (which you would remit, i.e., pay, to the states). As I mention in my post above, your business would need to obtain an EIN in order to register with the states. Although this would create a U.S. reporting requirement it would not necessarily mean you would be subject to U.S. taxation. If you form a LLC (not a requirement), then this could subject the LLC's owners to U.S. taxation. Please note this is a general answer, it is really much more complex that this.

  • Posted by Juan on October 4, 2015 6:03am:

    Hi Sylvia,
    Thank you so much for all the useful information you provide that I've been desperately looking for. I'm an Amazon FBA international seller located in Venezuela, I have just a couple of questions:
    1. As an international seller, could I possibly register and form a company LLC using an individual taxpayer ID number (since you said it'd be difficult to obtain an EIN)?
    2. I've heard that in order to get an individual taxpayer ID number I need a valid US tax return, how can I get a tax return since I'm not a US person?
    Thanks again.
    Regards,
    Juan

    • Posted by Sylvia on October 11, 2015 7:43pm:

      Juan,
      Gracias por leer mi post y por tu comentario. Como usted es de Venezuela, me imagino que usted es un hablante español. Voy a ofrecer mi respuesta en español e inglés también (ya que otros lectores pueden tener la misma pregunta). En realidad, es muy fácil para una entidad extranjera para obtener un EIN. Si está llevando a cabo negocios en los EE.UU. a través de una entidad venezolana - la entidad puede obtener un EIN fácilmente. Sin embargo, no es fácil de obtener un ITIN (el ITIN es un número para un individuo, el EIN es un número para la entidad). El IRS es muy estricto de los requisitos para obtener un ITIN. Si usted no tiene que presentar una declaración de impuestos de los EE.UU., es probable que no sea elegible para un ITIN. Hay razones para formar una LLC, pero puede que no sea necesario, y podría ser más difícil para usted como una persona extranjera. Espero que esta explicación es útil. Si usted tiene preguntas adicionales, por favor hágamelo saber.

  • Posted by Lengieng on June 5, 2015 8:30pm:

    Hi Sylvia,
    Thank you very much for very useful posts on "international sellers and sales tax"-related topics.
    I have a question. I am a new FBA seller on Amazon. Currently, I am based in South Korea and I don't have any company. Is it possible to register for the U.S EIN as an individual seller? If possible, is there any disadvantages that I should be aware of?
    Regards,
    Lengieng

    • Posted by Sylvia on June 7, 2015 9:45am:

      Lengieng,
      Thank you for reading my posts and for your comment. To answer your question, in general, an EIN is issued to business entities (corporations, partnerships, etc.) but it can be issued to an individual who is operating their business as a sole proprietor. For example, let's say that you were in the U.S. and you hired some employees but your business was not set up in a business entity - is is just you individually, operating the business like a sole proprietor. Because you have employees you would be required to obtain an EIN. However, even though it is possible for an individual to obtain an EIN, because you are not a U.S. citizen and you do not have a Social Security Number, it may be more difficult for you to obtain an EIN as an individual. I would suggest calling the IRS international taxpayer unit at +1-267 941-1099 for more information.

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