Online traders to review tax obligations following US court ruling

Geoff Collis profile image

Geoff Collis, Partner

Geoff has over 30 years’ experience and joined Wilkins Kennedy in 2013, following a merger with CW Fellowes Limited.

July 26, 2018


Businesses operating via online platforms to sell goods into the US could now face new taxation laws, regardless of whether or not they are based there.

Until recently, companies selling goods to customers in the US did not have to pay any sales tax, as long as there was no physical premises that could link them to a state. However, that has now changed.

In the wake of a recent court case, the US Supreme Court ruled in favour of collecting state sales taxes from any business with any form of connection with a state. This could be physical premises, but it could also be people, such as staff or customers, or by the sales themselves into those states.

The consequences of the ruling will result in any businesses trading with the US via internet sales, especially through sites such as Amazon and eBay, will need to consider reviewing any obligations to register for tax. Whilst Amazon and eBay themselves may collect tax, the responsibility is on the business to file a return and pay the correct amount of sales tax. This will need to be replicated in all states where the business is trading.

For businesses that do a small amount of trade, you may be able to consider other options, such as appointing a distributor that could take away the filing headache, but this should be approached with care.

If you would like further information about how the ruling may affect you, please contact the International team at Wilkins Kennedy.

  • es surrounding employment taxes, contact Wilkins Kennedy to see how we can help.

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