If you’re an Australian seller shipping to US customers, you almost certainly owe US sales tax in at least one state — and probably several — the moment you cross a state-level revenue threshold or store inventory in a US warehouse. The Australia–US tax treaty doesn’t help you. GST registration in Australia doesn’t help you. Being based in Sydney, Melbourne, Brisbane, or Perth doesn’t help you.
What does help: understanding the rules, getting a US EIN, registering only where you actually have nexus, and either filing diligently every month — or handing the whole thing to someone who does this all day.
This guide is written specifically for Australian ecommerce sellers, founders, and operators selling into the United States via Amazon FBA, Shopify, eBay, Etsy, Walmart, or any combination. If you’re tired of guides written for US-based sellers with a half-paragraph for “international” tacked on the end, this is for you.
Do Australian Ecommerce Sellers Actually Owe US Sales Tax?
Yes — once you cross a state’s economic nexus threshold or store inventory in that state, you have a legal obligation to register, collect, and remit sales tax. Citizenship, residency, and entity formation country are irrelevant.
The short answer: yes, if you cross a state’s economic nexus threshold
US sales tax is not federal. There is no national sales tax in the United States. Instead, sales tax is administered by individual states, and 45 of the 50 states (plus the District of Columbia) impose a general state-level sales tax. The five outliers are New Hampshire, Oregon, Montana, Alaska, and Delaware — though Alaska allows local jurisdictions to impose their own sales tax.
That means as an Australian seller, you’re not dealing with one US tax authority. You’re potentially dealing with up to 46 separate jurisdictions, each with its own thresholds, registration portal, filing frequency, due dates, product taxability rules, and penalty structures.
The watershed event was South Dakota v. Wayfair, Inc., decided by the US Supreme Court in 2018, which overturned the prior physical-presence requirement and allowed states to impose sales tax collection obligations on remote sellers based purely on economic activity. Before Wayfair, you had to have boots, inventory, or employees on the ground in a state. After Wayfair, simply selling enough to customers in a state is enough.
How US sales tax differs from Australian GST
This is the single biggest source of confusion for Australian sellers. They’re not the same tax.
| Feature | Australian GST | US Sales Tax |
|---|---|---|
| Scope | Federal, single rate | State-level, 46 jurisdictions |
| Rate | 10% | Varies: typically 4%–11% combined |
| Mechanism | Value-added tax with input credits | Single-stage retail tax, no input credits |
| Registration trigger | $75,000 AUD turnover | Per-state economic nexus threshold |
| Who collects | Every business in the supply chain | Only the retailer at point of final sale |
| Reverse charge | Yes (B2B common) | No equivalent |
If you’re used to the elegance of GST — register once with the ATO, claim back what you paid suppliers, remit the net — US sales tax will feel primitive. There is no input credit. You collect tax from your customer at checkout, hold it in trust, and remit it to each state on its filing schedule. There’s no offset for tax you paid your suppliers (because you typically buy on a resale certificate and pay no tax in the first place).
Why the Australia–US tax treaty does NOT exempt you
The Australia–United States Income Tax Treaty (originally 1982, amended via protocol in 2001) is an income tax treaty. Its scope is corporate income tax, withholding tax on dividends/interest/royalties, permanent establishment rules, and the like. Sales tax is explicitly outside its scope, because sales tax is a state-level transactional tax — not an income tax.
This trips up a lot of Australian founders who assume “I have a treaty country, I’m covered.” You’re not. The IRS doesn’t administer sales tax, and state revenue departments are not bound by federal treaties on transactional taxes. Your Australian Pty Ltd, sole trader ABN, or trust structure has the same US sales tax obligations as a Delaware LLC selling into the same states.
The Two Triggers: Economic Nexus and Physical Nexus
You owe sales tax in a US state when you trigger either economic nexus (revenue/transaction threshold) OR physical nexus (inventory, employees, warehouse). Either trigger is sufficient on its own.
Economic nexus thresholds by state (2026)
Economic nexus is the post-Wayfair rule: cross a state’s revenue or transaction threshold over a measurement period, and you must register. Here are the thresholds for the major states most Australian sellers care about, drawn directly from each state’s Department of Revenue:
| State | Threshold | Transactions Prong? | Effective Date |
|---|---|---|---|
| California | $500,000 in sales of TPP delivered into CA | California requires a seller’s permit once a business makes three or more sales for substantial amounts in any 12-month period (see CDTFA Regulation 1595). | Economic nexus effective dates vary by state and have shifted with subsequent legislative updates. If you’re determining when your collection obligation began in a specific state, contact us for a current review. |
| New York | $500,000 AND 100 transactions (conjunctive) | Whether a state’s economic nexus thresholds are conjunctive (must cross both sales and transaction prongs) or disjunctive (either one) varies by jurisdiction and has changed in several states. If you’re close to a threshold, contact us for a current review. | Economic nexus effective dates vary by state and have been amended since Wayfair. If you need to pin down when nexus was triggered in a particular state, contact us for a current review. |
| Pennsylvania | $100,000 in PA gross sales | No | Economic nexus effective dates differ across states and have been revised post-Wayfair. If you’re reconstructing a historical nexus footprint, contact us for a current review. |
| Massachusetts | $100,000 in sales | No | Economic nexus start dates vary by state and have been updated by subsequent guidance. If you need a definitive trigger date for a specific jurisdiction, contact us for a current review. |
| Connecticut | $100,000 AND 200 transactions (conjunctive) | Yes | State economic nexus effective dates are not uniform and several have been amended. If you’re evaluating back-period exposure, contact us for a current review. |
| Indiana | $100,000 in sales | No | 2018-10-01 |
A few patterns worth noting:
- Most states sit at $100,000 in gross sales as the floor
- A handful of large states use higher thresholds: California, Texas, and New York all use $500,000
- Some states (like New York and Connecticut) still require BOTH a dollar AND a transaction count to be crossed (conjunctive), while most have moved to dollar-only tests
- The trend is away from transaction-count prongs toward dollar-only thresholds, because the original 200-transaction prong from South Dakota’s law was easy to trip on a low-AOV product
For a complete state-by-state breakdown, see our economic nexus thresholds by state reference page.
Physical nexus: FBA inventory, US warehouses, US contractors
Even if you’re under the economic threshold, you can still be on the hook because of physical nexus. The classic trap for Australian sellers: Amazon FBA inventory creates physical-presence nexus in every state where Amazon stores your goods.
When you enrol in Amazon FBA, Amazon distributes your inventory across its US fulfilment centre network — typically 15–25 states at any given time. Each one of those states sees your stored inventory as a place of business. California Revenue and Taxation Code §6203(c)(1) explicitly includes “warehouse or storage place” in its definition of physical presence sufficient to require registration, and the CDTFA’s Marketplace Facilitator Act Tax Guide spells it out plainly: storing inventory in California — even via Amazon FBA — creates registration obligations independent of the marketplace facilitator law.
This is the inventory-nexus double trigger, and it is the single most common reason Australian sellers end up unregistered in states they didn’t realise they had nexus in.
How to count revenue in USD when your books are in AUD
Practical question almost no other guide answers: your Xero or MYOB ledger is in AUD, but state thresholds are denominated in USD. How do you test thresholds?
Two acceptable approaches:
- Per-transaction spot rate. Convert each US sale to USD at the date-of-sale exchange rate (your payment processor typically does this for you — Stripe, PayPal, and Amazon settle in your home currency at their rate). This is the most accurate but creates monthly tracking overhead.
- Annual average rate. Use a single annual exchange rate (e.g., the IRS yearly average, RBA average, or a published commercial rate) and apply it consistently to all US sales for the year. Simpler but can mis-state thresholds in a year with high FX volatility.
The key word is consistency. Pick a method, document it in your accounting policy, and stick to it. State revenue departments don’t publish a prescribed FX methodology for foreign sellers — they expect a reasonable, consistent approach.
Marketplace Facilitator Laws: When Amazon, eBay, Etsy, and Shopify Handle It For You
Marketplace facilitator laws shift the collection and remittance burden from the seller to the platform — but only for sales made through that platform, and only in states where the law applies. Shopify, WooCommerce, and BigCommerce are NOT marketplace facilitators.
What marketplace facilitator laws actually cover
Marketplace facilitator (MF) laws are now in effect in all 45 sales-tax states. Under these laws, when you sell through a qualifying marketplace, the marketplace itself becomes the legal “seller” for sales tax purposes — meaning Amazon, eBay, Etsy, Walmart, or Mercari calculates, collects, and remits the sales tax on your behalf.
For example:
– California’s Marketplace Facilitator Act became operative on October 1, 2019
– New York’s marketplace provider law became effective June 1, 2019
– Indiana’s marketplace facilitator law became effective July 1, 2019 (see IN DOR Marketplace Facilitators).
For pure-Amazon-FBA sellers in some states, this means Amazon does the heavy lifting. But — and this is enormous — you may still need to register, even if Amazon collects every cent.
Why you may STILL need to register even when the marketplace collects
This is the trap that catches Australian sellers who Google “Amazon collects my sales tax, am I done?” and stop reading.
Several states require the marketplace seller to register and file returns even when 100% of their sales are facilitated by a marketplace and Amazon is collecting and remitting. The reason: the seller still has independent nexus (typically from FBA inventory), and the state wants visibility into the seller’s activity even if no tax is owed by the seller directly.
States in this category include:
- California — CDTFA’s Marketplace Facilitator Act Tax Guide states that a marketplace seller is required to register if they have a sufficient physical presence, which includes maintaining inventory in California
- New York’s registration rules for sellers operating through marketplace providers turn on the specific facts of the seller’s activity and current NYDTF guidance. If you sell into NY through a marketplace, contact us for a current review of your registration obligation.
- Connecticut — CT DRS requires registered sellers to file Form OS-114 to report all sales activity even if no sales were made or no tax is due
- Pennsylvania’s registration expectations for online sellers with economic presence depend on current PA DOR guidance and the seller’s specific channels. If you sell into PA through marketplaces or direct channels, contact us for a current review.
- Massachusetts registration obligations for marketplace sellers with FBA inventory depend on current MA DOR positions and the specifics of your inventory footprint. If you have FBA stock in MA, contact us for a current review.
A small minority of states do exempt MF-only sellers from registration — Indiana, for example, explicitly states that a seller making sales only through a marketplace facilitator is not required to register or file Indiana sales tax returns. But you can’t assume; you have to check each state.
Shopify is NOT a marketplace facilitator — this is the #1 trap
Most Australian sellers use Shopify either as their primary channel or alongside Amazon. Here’s the part nobody tells you clearly:
Shopify is a platform, not a marketplace. WooCommerce, BigCommerce, Magento, Squarespace Commerce — same story. They host your storefront, but you remain the seller of record. You — not Shopify — are responsible for calculating, collecting, and remitting sales tax on every Shopify order.
This is a huge issue for mixed-channel sellers. If 80% of your US sales go through Amazon FBA and 20% through your Shopify store, Amazon handles the FBA tax, but you still have to:
- Register in every state where your total sales (FBA + Shopify) cross the economic nexus threshold
- Calculate, collect, and remit tax on the Shopify portion
- Report (often as $0 taxable) the Amazon-facilitated portion
For more on this, see our Shopify sales tax guide and marketplace facilitator laws by state.
Step Zero: Getting a US EIN as an Australian Seller
Before you can register in any US state, you need a US Employer Identification Number (EIN). You can get one as an Australian without an SSN, ITIN, or US bank account.
Why you need an EIN before any state registration
Every US state DOR registration portal asks for either an SSN, an ITIN, or an EIN to identify the registering business. As an Australian, you don’t have an SSN (that’s for US citizens and residents) and getting an ITIN is slow and painful. The path of least resistance is the EIN, which is free and obtainable from the IRS directly.
An EIN identifies your business — your Pty Ltd, your sole trader operation, your trust — to US federal and state authorities. Once you have it, every subsequent state registration uses the EIN as the primary identifier.
Form SS-4 by fax: the only realistic option for non-residents
The IRS provides three ways to apply for an EIN: online, phone, or fax. The online application requires a US-resident “responsible party” with an SSN — which you don’t have. So that’s out.
That leaves two realistic options for Australian sellers:
- Form SS-4 by fax to the international applicant fax number. Turnaround is typically 4–6 weeks. You complete Form SS-4, fax it to the IRS international fax line, and they fax (or mail) back the EIN.
- Phone application via the IRS International line. Faster (often same-call assignment) but operates on US Eastern Time, which means evening calls from Australia. Hold times can be brutal.
On Form SS-4, the critical line is 7b — “SSN, ITIN, or EIN of responsible party.” As a non-US resident with no US tax ID, the IRS-accepted answer is simply “Foreign.” This is documented in the IRS instructions to Form SS-4 and is the standard convention for non-resident applicants.
Common rejection reasons and how to avoid them
We see the same SS-4 rejections over and over:
- Inconsistent business name between SS-4 and Australian company register
- Wrong entity type box checked (sole proprietor vs. partnership vs. corporation — for an Australian Pty Ltd, “Corporation” is typically correct)
- Missing or incorrect responsible party name (must be a real person, not the company name)
- Reason for applying not properly indicated
- No fax number on the form for the IRS to fax back the EIN
For a deeper walkthrough, see our US EIN for non-US residents guide.
Skip the EIN paperwork, the state portals, the time-zone problems. Sales Tax Compliance USA handles your entire US sales tax compliance — from EIN through state registrations through monthly filings — for a single fee. No software for you to learn, no portals to log in to at 3am Sydney time. Book a free consultation or learn more about our service.
State Registration as a Foreign Seller: What You’re Actually Up Against
Every state accepts foreign sellers in principle. In practice, registration UX varies from “20 minutes online” to “notarised documents shipped from Sydney to a state capital.”
States that accept foreign Responsible Parties cleanly
Most states have figured out how to register foreign sellers. Their portals accept an EIN as the primary identifier, allow “Foreign” as the responsible party tax ID, and let you set up an online account from an Australian IP without much friction. New York, California, Texas, Florida, and Washington fall in this category — though “clean” is relative; New York still wants you to apply at least 20 days before beginning operations.
States that require notarised or apostilled documents
A handful of states demand more paperwork from foreign applicants, particularly when a third party is registering on the seller’s behalf via power of attorney. This can mean:
- A notarised POA witnessed by an Australian Justice of the Peace or notary public
- An apostille from the Australian Department of Foreign Affairs and Trade (DFAT) authenticating the notarisation for use in the US under the Hague Apostille Convention
- Original signed and posted (not scanned) forms
Apostille turnaround in Australia varies but typically runs 5–10 business days from DFAT, plus international post. Plan accordingly.
States that require a US bank account for ACH filings
Some states’ online portals strongly prefer (or effectively require) ACH debit for tax payment, which means setting up a debit relationship with a US bank account. As an Australian seller, you have a few options:
- Wise (formerly TransferWise) Business — provides USD account and routing numbers usable for ACH debit in most states
- Mercury, Relay, Brex — US digital banks that accept foreign-founded entities (with varying KYC requirements)
- Payoneer — works for some states’ ACH setup
- A third-party filing service that pays state tax on your behalf using its own US banking infrastructure (this is what Sales Tax Compliance USA does for clients)
A few states still accept paper checks drawn on US banks, and a smaller number accept international wire transfers, but the path of least resistance is a USD account that supports ACH.
The Streamlined Sales Tax (SST) program provides a single registration covering 24 member states. In theory, this sounds great for a foreign seller. In practice, SST registration is rarely the right answer because:
- You’re registering in 24 states whether you have nexus there or not
- Most foreign sellers don’t yet have nexus in 24 states — they have nexus in 5–15
- SST registration commits you to filing in all 24, even where you have $0 in sales
For more, see our Streamlined Sales Tax for foreign sellers analysis.
Filing, Remitting, and Staying Compliant Year-Round
Once registered, your obligation isn’t done — it’s just begun. Every state assigns a filing frequency, requires returns even in zero-sales months, and applies penalties for missed filings.
Filing frequencies (monthly, quarterly, annual) and how they’re assigned
Most states default new registrants to a quarterly filing frequency, then re-assess based on actual liability after 6–12 months. Higher-volume sellers get bumped to monthly. Very low-volume sellers may be allowed annual.
Specific examples from the verified KB:
- California assigns sales tax filing frequency based on average tax liability, with monthly prepayments required at higher liability levels. If you need to confirm your assigned frequency or prepayment status, contact us for a current review.
- New York uses an unusual quarterly period structure where Q1 runs March 1–May 31 with a return due June 20, Q2 runs June 1–August 31 due September 20, Q3 runs September 1–November 30 due December 20, and Q4 runs December 1–February 28/29 due March 20
- Indiana sales tax return due dates depend on the assigned filing frequency and tax type; monthly filings are generally due the 20th or last day of the following month per IN DOR forms. Confirm your specific due date against your assigned frequency.
Sourcing rules: destination vs. origin states
Most states use destination sourcing: tax is calculated based on the buyer’s address. A small number use origin sourcing for in-state transactions. California uses a hybrid sourcing approach in which state and certain local components are sourced differently than district taxes. If you need to determine the correct rate to apply on a CA transaction, contact us for a current review..
For an Australian seller selling into the US, you’re effectively always a “remote seller,” so destination sourcing applies almost universally — your tax engine looks at the buyer’s ZIP code and applies the combined state + local + special district rate for that exact address.
Combined rates can range from roughly 4% to over 11% depending on the destination. For example, California’s statewide minimum combined rate is 7.25%, but with district taxes the rate can reach approximately 10.75%–11.25% in some jurisdictions, while New York combines a 4% state rate with local sales taxes and a 0.375% MCTD tax, reaching 8.875% in New York City.
Product taxability for common ecommerce categories
Taxability rules vary by state and product category. Some major patterns:
- Apparel: New York exempts clothing and footwear under $110 per item from the 4% state sales tax; Massachusetts exempts clothing up to $175 per item; Pennsylvania broadly exempts clothing from sales tax, with exceptions for certain categories. If you sell apparel or apparel-adjacent goods into PA, contact us for a current taxability review.
- Food/groceries: Generally exempt in most states, but with carve-outs for prepared food, candy, and supplements
- Candy: Candy is exempt from Massachusetts sales tax as a food product, unless sold as part of a taxable meal by a restaurant or from vending machines/honor trays at certain price points (see MA DOR Sales Tax on Meals).; California exempts candy as part of its broad food-products exemption — unusual among states
- Dietary supplements: Treatment varies dramatically — taxable in Massachusetts, Connecticut, Pennsylvania, and most states; treated as food (and exempt) in California
- SaaS: Taxable at 6.25% in Massachusetts; Connecticut applies 1% to B2B SaaS and 6.35% to personal-use SaaS; SaaS taxability in California depends on whether the offering is classified as a taxable transfer of tangible personal property under current CDTFA guidance (see CDTFA Sales & Use Tax programs). If you sell SaaS into CA, contact us for a current taxability review.; exempt in Indiana
For a comprehensive breakdown, see our SaaS sales tax by state reference.
Filing zero returns even in zero-sales months is required in most states. Failure to file generates automatic penalties — typically 5–10% of tax due (which is $0) plus a flat-dollar minimum penalty (often $25–$50 per missed return) plus interest. These add up fast across 10–15 states over a year.
The Honest Cost of DIY vs. Done-For-You for an Australian Seller
A typical Australian Shopify seller crossing nexus in 12 US states can expect 80–120 hours per year of compliance admin if they do it themselves. That’s a part-time job for an unpaid bookkeeper who also has to learn US tax law.
Realistic time investment to DIY across 10-20 states
Here’s what your year actually looks like if you DIY:
- Initial setup (one-time): 40–60 hours. EIN application, 12 state registrations, learning each portal, configuring your tax engine, getting bank/payment routing right.
- Monthly filings: 6–10 hours per month across 12 states (some monthly, most quarterly with monthly bookkeeping). That’s 80–120 hours/year ongoing.
- Notice handling: Variable. State DOR notices arrive in physical US mail (which is fun when you’re in Sydney), need to be triaged, and often have 30-day response windows. Plan for 20+ hours/year.
- Annual nexus review: 5–10 hours to re-check thresholds, retire registrations in states where you’ve fallen below threshold, and add new ones.
This is on top of your actual job — which is running an ecommerce business.
Where software-only solutions fall short for foreign sellers
the major SaaS sales tax platforms — all useful tools, all built primarily for US-based sellers. As an Australian seller, the gaps you’ll hit:
- None of them get you a US EIN. That’s still on you.
- None of them register you in states. Some offer “registration as an add-on” for an extra fee, but you still complete the application data.
- None of them resolve state notices. Notices in physical mail, sent to the address on your state registration — which is your problem.
- None of them do audit defence. If a state DOR audits you, you’re hiring a separate professional.
- All of them charge in USD per month per state. For a 12-state seller, you’re looking at $200–$500/month just in software, plus your own time.
What full-service compliance includes
Sales Tax Compliance USA is a done-for-you service — not software. We handle:
- US EIN application and follow-up
- Nexus monitoring across all 45 states (sales-dollar tracking in USD with proper FX methodology, transaction-count tracking where states still use it)
- State registrations including notarised documents and apostilles where required
- Monthly and quarterly filings in every state where you’re registered
- Notice handling: we get the mail, we resolve the issue, we keep you informed
- Voluntary disclosure agreements if you’ve been selling unregistered (see voluntary disclosure agreements for foreign sellers)
- Deregistration when you leave a state
- Audit support if it ever comes to that
One fee. No software for you to learn. No portals to log into. No state DOR mail being scanned and emailed to you.
For Australian sellers, this is the difference between US sales tax being a constant low-grade anxiety and US sales tax being something that just… happens, correctly, every month, while you focus on growing the business.
Frequently Asked Questions
Do Australian sellers need to charge US sales tax on every order?
No — only on orders shipped to states where you have nexus AND for products that are taxable in that state. If you have no US nexus, you charge nothing. If you have nexus in California only, you charge California buyers and nobody else.
Does the Australia–US tax treaty exempt me from US sales tax?
No. The treaty covers income tax only. Sales tax is administered by individual US states and is outside treaty scope.
Can I get a US EIN without an SSN, ITIN, or US bank account?
Yes. Apply via Form SS-4 by fax to the IRS international applicant line, write “Foreign” in the responsible-party tax ID line (7b), and you’ll receive an EIN typically within 4–6 weeks.
Does Amazon collect US sales tax for Australian FBA sellers?
Amazon collects and remits sales tax on FBA-channel sales in all 45 sales-tax states under marketplace facilitator laws. However, you may still need to register in states where your FBA inventory creates physical nexus — Amazon’s collection doesn’t relieve your registration obligation in states like California, New York, Pennsylvania, Massachusetts, and Connecticut.
Do I need to register for US sales tax if I only sell on Shopify?
Yes, in every state where you cross economic nexus. Shopify is not a marketplace facilitator — you remain the seller of record and must register, collect, and remit yourself.
What is the lowest economic nexus threshold across US states in 2026?
$100,000 is the most common floor across the majority of states with economic nexus. A few states use higher thresholds ($250,000–$500,000), and some apply a transaction-count alternative (typically 200 transactions).
How do I track my US sales in USD when my Xero books are in AUD?
Use either per-transaction spot rates (your payment processor typically handles this automatically) or an annual average exchange rate applied consistently. State DORs don’t prescribe a method; consistency matters.
What happens if I’ve been selling into the US for years and never registered?
You likely have unfiled returns, unremitted tax, and accruing penalties. The standard remediation path is a Voluntary Disclosure Agreement (VDA) with each affected state — this typically caps lookback at 3–4 years and waives penalties in exchange for voluntary registration and back payment.
Is GST the same as US sales tax?
No. GST is a federal value-added tax with input credits. US sales tax is a state-level single-stage retail tax with no input credits and no federal layer.
Can Sales Tax Compliance USA register and file in all 45 states for me?
Yes — across all 45 sales-tax states plus DC. We handle EIN, registration, monthly filings, notice resolution, and deregistration as a done-for-you service for a single fee. Book a free consultation.
Last verified: 10 May 2026
This article is for informational purposes only and does not constitute tax advice. Consult a licensed tax professional before acting on any of this content.
