Aliexpress dropshipping sales tax for non-us residents

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Hi All,
I am starting dropship business with Shopify, I will be doing basic Aliexpress drop shipping and I don't live in the US so I don't have SSN number.
Because of that, I set up a new company (LLC) in Delaware state, which allows non-us residents to have company and EIN. My question is about the taxes.

Do I need to collect sales or income taxes? (As I know no need to pay income taxes for Delaware registered companies, is it true?)

Let's say I sold any goods for 100$ to the customer which located in California or Texas, My company billed to customer and goods sent from China to my customer. Do I need to get sales tax amount from the customer? (with the nexus rules of customer resident state) If yes how you calculate taxes for all the states? as it's different for all the states :S

I am about the begin and for sure I will talk with a tax consultant, but your experiences are very valuable for me

Thanks in advance
#aliexpress #dropshipping #nonus #residents #sales #tax
  • Profile picture of the author dave_hermansen
    Generally speaking, you are only required to collect sales tax for shipping destinations that are in the state you are incorporated in. In your case, that is Delaware and since there is no sales tax in Delaware, you would probably never need to worry about it.

    I say "probably" because it also can depend on where things are shipping from. If you are dropshipping from a company/warehouse in the state of California, that state's sales tax nexus laws state that a warehouse in that state constitutes a legal nexus (even if it is not your company's) and you would need to pay sales tax to the state of California for any order shipped to California. In most cases, your dropship supplier simply collects the tax from you and it is up to you whether or not you are going to pass that sales tax down to your customer.

    That said, Delaware does have a gross receipts tax on businesses that sell anything (even online-only businesses). You would be required to pay that gross receipts tax for anything that shipped to the state of Delaware (it is a very small amount that ranges from 0.1037% to 2.0736%, depending on the business activity). You are not allowed to charge customers sales tax to cover your gross receipts tax.

    Here are two pertinent links to sites that discuss Delaware Gross Receipt tax and the difference between them and sales tax:

    https://revenue.delaware.gov/service...ax/Step4.shtml
    https://www1.avalara.com/trustfile/e...pts-taxes.html

    As far as your own personal income tax goes, that is generally only paid to your own country. There are situations where this may not be the case, however, all depending how your LLC was set up. You should really speak with a qualified tax attorney regarding your individual situation.
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    • Profile picture of the author num num
      Thanks, Dave, that's what I was looking for.
      As I will ship directly from China to the US, I guess I won't pay any sales tax, let me talk to a tax consultant as well.
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      • Profile picture of the author dave_hermansen
        Originally Posted by num num View Post

        Thanks, Dave, that's what I was looking for.
        As I will ship directly from China to the US, I guess I won't pay any sales tax, let me talk to a tax consultant as well.
        Just don't forget that Delaware has that gross receipts tax. You would be required to remit that small amount on orders that ship to Delaware residents.

        Of course, if you don't feel like dealing with that at all, you can just exclude Delaware from places you will ship to and you'll never get an order from there. Delaware is one of the lesser populated states in the U.S.A. (there are only 6 states with less people), so you won't take much of a revenue loss by excluding orders from there.
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