US sales tax for Australian businesses
Sell software or products to US customers from Australia and you can owe sales tax in US states, even with no US office. Kintsugi finds where, registers you, and files.
Why a seller in Australia can owe tax in Texas
Each US state sets a sales threshold for sellers outside the state. Once your sales to customers in that state pass it, you have economic nexus there and must register, collect the state's sales tax and file returns. The rule applies to sellers based overseas the same as to sellers based next door.
US$100,000
41 of the 46 states and districts with a sales tax set the line here. 16 of them also count transactions.
US$250,000
Alabama and Mississippi set it at US$250,000.
US$500,000
California, New York, and Texas set it at US$500,000. New York also requires more than 100 sales.
4 states
Delaware, Montana, New Hampshire, and Oregon have no statewide sales tax and no threshold. Alaska has no state sales tax, but its local governments use a US$100,000 threshold for remote sellers.
Thresholds change. The economic nexus guide has every state with its source, and the economic nexus calculator checks your own sales against them.
If you know GST, this is how US sales tax differs
| Topic | Australian GST | US sales tax |
|---|---|---|
| Who you register with | The Australian Taxation Office. | Each state separately, once your sales into it pass that state's threshold. |
| The rate | A single national rate of 10%. | A state rate, plus county and city rates where they apply, set by where the buyer is. |
| The threshold | A$75,000 in turnover. | Set by each state, most often US$100,000 in sales. |
Software and physical goods are taxed differently
- EcommerceSee ecommerce sales tax automation
Selling physical goods
Physical goods are generally taxable. Marketplaces like Amazon collect on the sales they facilitate, and each state decides whether those count toward your threshold.
- SaaSSee SaaS sales tax automation
Selling software
Whether software as a service is taxable depends on the state, and the answer differs again for downloads and digital goods. Kintsugi applies the state's treatment to each sale.
- GuideRead the SaaS guide
SaaS sales tax by state
Which states tax SaaS, which do not, and what changes if you sell to businesses instead of consumers.
What Kintsugi does for you
1
We watch your sales by state
Connect Xero, Shopify, Stripe or another system. Kintsugi tracks your sales into every state against its threshold and alerts you as your sales approach it.
2
We register you
When you owe tax in a state, Kintsugi registers you there, so you do not work through each state's portal yourself.
3
We calculate the tax
Each sale gets the rate for the buyer's address, and each product gets the treatment its state gives it.
4
We file and remit
Kintsugi files the return in each state and pays the tax you collected.
Kintsugi also supports Australian GST. See VAT and GST automation or the Australia GST guide.
Questions Australian sellers ask
Find out which US states you owe
Connect your sales data and see where you have crossed a threshold.