I am constantly meeting entrepreneurs and business owners who are running great businesses online. They tell me that US taxes are a nightmare for them. They are unable to find one place where they can get all the answers they seek –
- If I’m a digital nomad, spending time in Bali or Chiang Mai or Penang – what, if any, is my tax exposure in the jurisdiction in which I am spending time?
- If I’m a US citizen or green card holder, what, if any is my tax exposure given that I am spending months or years away from the US?
- If I’m British, Australian, Italian, French etc. – what, if any is my tax exposure given that I am spending months or years away from my country of origin?
- If I am based in Asia but I’m running a Drop Shipping business focusing on the US market. What is my US tax exposure?
- If I am based in Asia but I’m running a business using Amazon FBA, focusing on the US market. What is my US tax exposure?
- I think that my Drop Shipping or Amazon FBA business has US tax exposure, is there one firm that can help me with US tax planning and compliance for sales taxes, use taxes, city taxes, state taxes, Federal taxes?
- Software companies are selling me US tax compliance services, but they are not licensed tax practitioners so what happens to me and my business if the software company gets something wrong with my US taxes?
These are all valid questions and it is near impossible for a single individual to know all these answers. It is also unusual for a single firm to have all these answers as well. That’s where we come in. We are an international tax team with accredited and qualified cross border tax professionals. With that in mind, here are some answers.
If I’m a digital nomad, spending time in Bali or Chiang Mai or Penang – what, if any, is my tax exposure in the jurisdiction in which I am spending time?
Read our thoughts here – http://www.mooresrowland.tax/2018/04/tax-responsibilities-of-digital-nomads.html
If I am based in Asia but I’m running a Drop Shipping business focusing on the US market. What is my US tax exposure?
The key tax to pay attention to would be sales and use tax. Unfortunately, this is one of the most complex tax structures in the US and everyone needs help in planning and compliance. This is more of an issue since the rules changed in summer 2018.
On June 21, 2018, the U.S. Supreme Court overturned decades of established law that required vendors to have a physical presence in a state before that state could require them to collect and remit sales tax on purchases by customers within the jurisdiction. The Court overturned its 1992 decision, Quill Corp. v. North Dakota, with its recent decision in South Dakota v. Wayfair, Inc., noting that “the physical presence rule, both as first formulated and as applied today, is an incorrect interpretation of the Commerce Clause.” While it will take some time to completely understand the full effects of this decision, it is safe to say that this is the most important development in the sales tax world in at least 25 years.
What about US Income Taxes for Amazon Sellers or Drop Shippers who are not American and who live outside of the US?
More Questions? Drop us an email on firstname.lastname@example.org today