US Sales Tax for Canadian Online Sellers (2026)
Do Canadian sellers collect US sales tax? Only with nexus. Economic thresholds by state, marketplaces, FBA and 3PL stock, and how a Canadian registers.
Canadian sellers often assume selling into the US means collecting sales tax in 45 states. For most small stores it doesn’t. The US has no federal sales tax, and each state can only make you collect once you have nexus there. Here’s when that happens, what marketplaces do for you, and how a Canadian business registers when it finally has to.
TL;DR
- No nexus, no sales tax. A Canadian store only collects a state’s sales tax once it has economic or physical nexus there.
- Economic nexus usually starts at US$100,000 of sales into a state in a year. California and Texas use US$500,000. New York needs US$500,000 and more than 100 sales.
- Physical nexus starts with the first unit of stock in a US warehouse: Amazon FBA, a 3PL, or a pop-up shop.
- Marketplaces collect it for you. Etsy, Amazon and eBay handle US sales tax on their orders.
- Sales tax isn’t duty. Import duty is a separate, federal charge at the border.
| Your situation | Collect US sales tax? | What to do |
|---|---|---|
| Selling on Etsy, Amazon or eBay | No: the marketplace collects | Nothing for those sales |
| Own store, under the threshold in every state | No | Track sales by state once a year |
| Own store, over US$100,000 into one state | Yes, in that state | Register for a permit there, collect and file |
| Stock in Amazon FBA or a US 3PL | Yes, potentially, in each state where it’s stored | Check each state’s rules; register where required |
| Selling digital products into the US | Depends on the state and your sales there | About half the states tax digital goods |
There’s no federal sales tax
The US has 45 states with a sales tax, plus DC and Puerto Rico, each with its own rules, rates and returns. Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon (though some Alaska towns charge their own). Rates differ by city and county too, so a Seattle order and a Spokane order aren’t taxed the same. Look any address up with the US sales tax calculator by ZIP code.
Because it’s a state tax, there’s no single US registration. You register state by state, only where you have to. The US sales tax guide explains the whole system.
Economic nexus: when your sales create an obligation
Since the 2018 Wayfair decision, a state can make a remote seller, including a Canadian one, collect its sales tax based only on how much it sells there. That’s economic nexus:
| State | Threshold (12 months) |
|---|---|
| Most states | US$100,000 of sales into the state |
| California, Texas | US$500,000 |
| New York | US$500,000 and more than 100 sales |
| A few states | Also 200 transactions, though Illinois, Utah and Alaska have dropped that test since 2025 |
The rules differ in the details: whether the period is the calendar year or a rolling 12 months, whether marketplace sales count towards the total, and whether exempt sales count. The state sales tax index has each state’s threshold, and the US nexus calculator checks your sales against all of them.
Most small Canadian stores are below every threshold. Even US$300,000 of US sales spread across the country rarely puts more than one or two states over US$100,000.
Physical nexus: stock in the US
Keeping inventory in a US state is a physical presence, and it creates nexus from the first unit, whatever your sales. That includes:
- Amazon FBA stock, which Amazon can move between fulfilment centres in many states;
- a US 3PL or fulfilment warehouse;
- a pop-up shop or trade show booth, in some states;
- staff or contractors working in a state.
Many Canadian brands open a US 3PL to avoid duty on every parcel and offer faster delivery. That’s a good move, but plan the sales tax at the same time. Read Amazon FBA and nexus before you send stock south.
Marketplaces collect it for you
Every US state with a sales tax has a marketplace facilitator law. Etsy, Amazon, eBay, Walmart Marketplace and similar platforms calculate, collect and pay sales tax on the orders they process, for sellers based anywhere. Etsy says sellers can’t opt out.
For a Canadian seller that means:
- Marketplace-only sellers usually never need a US sales tax registration.
- Own-store sellers are responsible for their own store’s sales once they have nexus.
- Both: some states count marketplace sales towards your threshold and some don’t. If you’re near US$100,000 in a state across all channels, check how it counts.
Worked example: a Montreal skincare brand
Lumen & Sel makes skincare in Montreal and sells on Shopify and Amazon. In 2026 its US sales by state were:
| State | Shopify | Amazon | Over the threshold? |
|---|---|---|---|
| California | US$41,000 | US$22,000 | No: US$500,000 threshold |
| New York | US$26,000 | US$9,000 | No: US$500,000 and 100 sales |
| Texas | US$14,000 | US$8,000 | No: US$500,000 |
| Washington | US$12,000 | US$6,000 | No: US$100,000 |
| Florida | US$9,000 | US$5,000 | No: US$100,000 |
| All other states | US$58,000 | US$30,000 | No state over US$100,000 |
That’s US$240,000 of US sales and no sales tax obligation in any state. Amazon collects on the US$80,000 of Amazon orders. Lumen & Sel doesn’t collect on its Shopify orders.
In 2027 it moves its US stock into a 3PL in Pennsylvania to cut shipping times. From the day the first pallet arrives, it has physical nexus in Pennsylvania, so it registers there and collects 6% (plus local tax where it applies) on Shopify orders to Pennsylvania addresses. Its other states are unchanged.
On the Canadian side, all its US sales are zero-rated exports for GST/QST, and they still count towards its small supplier threshold.
How a Canadian business registers for US sales tax
When you do pass a threshold, the process is the same for a Canadian business as for a US one:
- Get an EIN. Many states ask for a US federal Employer Identification Number. A Canadian business can get one from the IRS without a US company or Social Security number, by applying with Form SS-4.
- Register for a seller’s permit in that state, usually online through the state’s tax department. See how to get a seller’s permit.
- Turn on tax collection in your store for that state only.
- File returns monthly, quarterly or annually, as the state assigns. Nil returns are usually required too.
The foreign sellers guide and the foreign seller compliance checklist cover each step in more detail.
Digital products and SaaS
Selling e-books, patterns, presets, courses or software to US customers works the same way: you only collect where you have nexus. The difference is that about half the states tax digital goods, and fewer tax SaaS, so even over a threshold you may owe nothing in some states. Our post on nexus for digital products and SaaS goes into the details.
Sales tax vs customs duty
Two separate charges, often confused:
| Customs duty and tariffs | State sales tax | |
|---|---|---|
| Who sets it | US federal government (CBP) | Each state |
| When it’s charged | When goods cross the border | At checkout |
| Applies to | Physical goods | Goods (and digital goods/services in some states) |
| Threshold | None: the US$800 de minimis has been suspended since August 2025 | Economic nexus, usually US$100,000 per state |
| Who handles it | You (DDP) or your buyer (DAP), through the carrier | You, once registered, or the marketplace |
The duty side, including tariffs on Canadian goods and Canada Post’s prepaid duty, is covered in shipping to the US from Canada.
FAQ
Do Canadian businesses have to charge US sales tax?
Only in states where they have nexus. A Canadian seller has economic nexus in a state once its sales there pass the state’s threshold, usually US$100,000 a year, and physical nexus as soon as it keeps stock there, for example in Amazon FBA or a 3PL warehouse. Below those thresholds, a Canadian store doesn’t collect US sales tax.
Do Etsy and Amazon collect US sales tax for Canadian sellers?
Yes. Etsy, Amazon, eBay and other marketplace facilitators calculate, collect and pay US sales tax on orders made through them in every state with a sales tax, wherever the seller is based. You don’t need to register for those sales. Sales through your own Shopify or WooCommerce store are not covered.
What is the economic nexus threshold for US sales tax?
In most states it’s US$100,000 of sales into the state in the current or previous calendar year. California and Texas use US$500,000, and New York requires both US$500,000 and more than 100 sales. A handful of states still also count 200 transactions, though several have dropped that test since 2025. Five states have no statewide sales tax.
Does Amazon FBA create sales tax nexus for a Canadian seller?
Yes. Inventory stored in a US state is a physical presence there, so it creates nexus from the first unit, whatever your sales. Amazon still collects sales tax on Amazon orders, but some states expect you to register, and the nexus can make sales through your own store taxable there too.
Can a Canadian business register for a US sales tax permit?
Yes. Each state lets foreign businesses register for a sales tax permit online. Many ask for a US federal Employer Identification Number (EIN), which a Canadian business can get from the IRS without a US company or Social Security number. You then collect tax on sales into that state and file returns on the schedule the state assigns.
Is US sales tax the same as customs duty?
No. Customs duty and tariffs are federal and charged at the border when goods enter the US. Sales tax is set by each state and charged to the customer at checkout. A parcel can owe both: duty because the US$800 de minimis exemption has been suspended, and sales tax if you have nexus in the buyer’s state or sell through a marketplace.