If a UK company sells books on the net to the USA, does it have to collect US Sales Tax from the customer?

Question

Does the UK company collect the sales tax or does the buyer have to pay it themselves to the US government?

If the customer has to pay, how would they pay it?

Alternatively, are books zero-rated for sales tax, like Value Added Tax in the UK?

Answer 1

In your situation, the answer is NO, you do not need to collect US sales tax. Read on...

Each of the 50 U.S. states sets its own sales tax rule. Some states have a sales tax and some do not. In addition, some cities have sales taxes.

If you have a continuing physical presence in a state, such as a traveling salesperson, an independent contractor or an office of any type, you need to register for that state's sales tax, collect sales tax from the customer and remit it to the state.

If you have no presence, you DO NOT need to collect and remit sales tax. If sales tax is due, this becomes the obligation of the customer to self-assess the tax and report it on their sales tax return (or in some cases, their annual income tax return). Also, in some states like California, but not all states, the download of software or "e-books", is not subject to sales the sale of computer software or paper copies of books are subject.

You can voluntarily register, but filing sales tax returns in each of the 50 U.S. states that have a sales tax, determining what is taxable, determining the state and local tax rate to use, filing returns and remitting the tax is an administrative nightmare!

The rules requiring registration in the U.S. require a physical presence. It is not like the EU rules which require a U.S. company selling over the internet to register for EU VAT purposes. At least, for EU purposes, a U.S. company can register in only one EU county to meet its VAT obligations and is not required to register in each EU country in which it makes sales.

Answer 2

No................ sales tax.