Sales Tax Basics for Selling to the US & EU
Tax looks scary, but for a new store the rules can be summarized in a few pages.
US: state sales tax
- Tax applies based on where the buyer is (destination-based).
- Each state has its own rate; California ~8.25%, New York ~8.87%.
- Economic nexus: once you exceed state thresholds (usually $100k or 200 transactions), you must collect tax there.
EU: VAT
- VAT is charged at the destination country rate (19–22% typical).
- Under OSS (One-Stop Shop), one registration covers all EU countries.
- Below €10k/year cross-border sales, you can keep using your home-country VAT rate.
What to do now
- Use a tax engine that computes rates by shipping address.
- Track revenue per state/country to know when nexus triggers.
- Keep invoices — every EU invoice needs VAT number and rate.
Disclaimer: this is general information, not tax advice. Consult a professional for your situation.