US Sales Tax Question - US customer, US shipper, Canadian seller

[dipmicro]

Anyone has experience with fulfilment from USA ?

Seller operating from Canada, customer invoiced from Canada, payment goes to Canada, but product ships from USA to USA.

I believe there is no US sales tax involved, am I wrong? In case there is a tax liability, Canadian seller is not authorized to collect it, so how would this work?

[mr.elmwood]

Taxes are not assessed on international sales unless it is GSP and Pitney Bowes is collecting non-collectable taxes.

Hum? The possibly exists that the Cdn seller has an American foot print. No, that still does not count as the parcel is exiting the USA.

[pierrelebel]

You are looking at a dropshipping operations with Canadian reseller and American dropshipper..

Technically, the American dropshipper is liable to charge and remit State Retail Sales Tax if the buyer is located in the same State.

[recped]

I think dipmicro is talking about fulfillment services not dropshipping.

In a fulfillment situation you own the inventory so there is no dropshipper involved. If you don't own the fulfillment service or actually lease space (only contract for a service) I don't think you would be considered to have a "presence" in that state and therefore you are not obligated to collect local sales tax.

It's a somewhat complicated issue, just ask Amazon! The big difference is that with Amazon because they bill the purchaser are acting like a hybrid of fulfillment and dropshipping whereas you would only be doing fulfillment.

[mr.elmwood]

I t "looks" like Dip is more concerned about getting charged taxes or having to pass them along to Cdn buyers. Cdn buyers abhor paying taxes on imported goods when they should not have to.

[dipmicro]

Thanks everyone for replying.

Canadian customers are not the issue here, US customers are.

I think my situation is dropshipping.

If I understand correctly, only sales to supplier's state are affected, so when I send PO with shipment to supplier's state, they will have to invoice me their local tax. I cannot claim this as credit because I have no relation with their tax authority.

Ok then, I will either absorb/expense the tax or refer customer to another dealer.