Asked in Tax Law

Q: I live in Russia, so I'm not USA citizen. I do dropshipping and want to become Tax Exempt. Is there a way to do that?

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1 Lawyer Answer

A: You're dealing with two different tsxes. Sales tax and income tax. To tax you the IRS and the tax department of each state needs nexus, essentially enough interaction to create the right to assess tax on you. The IRS only deals with income tax since there is no federal sales tax. Income tax nexus will be determined based on your location, source of income, physical property, and empliyees. Sales tax is determined by the recipients location, that states nexus rules, number of items shipped, and amount of sales. Each state is a bit different.

You're going to want to retain a US tax professional to help guide you through the process state by state.

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