Introduction
If you are selling to U.S. customers from France you may find yourself liable to U.S. sales tax, even without a presence in the U.S. This article is aimed at U.S. sales tax compliance for businesses based in France who want to understand and manage their tax obligations.
In contrast to France’s VAT system which is a federal, multi-stage value-added tax, U.S. sales tax is governed at the state-level, is charged only at the point of retail sale, and varies widely across 12,000+ jurisdictions.
For example, France does not charge French VAT on exports, while in the U.S. you might have to collect and remit sales tax in some states if your business has nexus and it sells into the applicable state.
Understanding U.S. Sales Tax
U.S. sales tax is implemented at the state and local level; this means that each state and often city/counties create their own tax law, rules, rates, exemptions and payment requirements.
For companies from Europe, this can be a huge adjustment. In France, VAT is a multi-stage tax that is charged at every point in the supply chain and is recoverable by businesses. In contrast, the U.S. only charges sales tax once, the final point of sale to the end user.
U.S. Sales Tax vs. French VAT
| Category | French VAT | U.S. Sales Tax |
| Type | Multi-stage value-added tax | Retail tax on final sale |
| Level | National (same across France) | State + local (12,000+ combinations) |
| Digital Goods/SaaS | Generally taxed | Varies by state (some tax SaaS, some don’t) |
| Export Rules | Zero-rated (0% VAT) | Taxable if you have economic nexus |
Do French Sellers Pay US Sales Tax?
French sellers only pay or, to be precise, collect and remit U.S. sales tax if there is a nexus in a U.S. state. A nexus is the legal relationship to a state that makes a seller have sales tax obligations, and understanding how nexus works is important for any France-based business selling into the U.S.
What is Nexus?
Traditionally nexus was defined as physical presence. This could be having an office, a warehouse or an employee in a particular state, called Physical Nexus.
Nonetheless, the 2018 South Dakota v. Wayfair Supreme Court case introduced a new standard of economic nexus, meaning a remote vendor could create a sales tax obligation depending on the level of sales or transaction the remote vendor had in a state. Most states have set their thresholds (both sales and transactions) to roughly $100,000 in sales or 200 transactions a year.
For French businesses, this means if you sell enough goods or services to customers in a state in the U.S., then you will create an economic nexus.
Types of Businesses Affected
1. Remote Sellers:
Businesses selling online directly to U.S. customers.
2. Marketplace Sellers:
Sellers on platforms such as Amazon or Etsy, where marketplace facilitator laws may apply, changing who is responsible for tax collection.
3. Direct-to-Consumer E-commerce:
Those using platforms like Shopify or WooCommerce need to be vigilant about nexus and tax obligations.
Sales Channels and Nexus
Different sales channels affect how French sellers must comply:
1. Shopify and Similar Platforms: Sellers are responsible for monitoring nexus and collecting taxes where applicable. Many platforms offer automated tax solutions but the onus remains on the seller.
2. Amazon and Marketplace Facilitators: Many states require Amazon to collect and remit sales tax on behalf of sellers, easing the compliance burden for French businesses.
3. Other Marketplaces: Each marketplace has its own rules, so it’s essential to verify tax responsibilities.
Economic Nexus and Sales Tax Rules for France Businesses
Under France sales tax rules for U.S. sales, economic nexus is usually the reason most France-based companies owe U.S. sales tax even without ever setting foot on American soil.
What Is the Economic Nexus?
Economic nexus is a tax obligation triggered by your sales activity in a state not by physical presence. French businesses will have to collect US sales tax under economic nexus rules once their sales in a state exceed certain thresholds.
The most important piece to understand is that if your business exceeds a state’s threshold, then you must register and collect sales tax from purchasers in that state.
You can learn more about how states enforce this through our deep dive on the economic nexus.
What This Means for France-Based SaaS and E-Commerce Sellers
If you’re a B2C e-commerce seller, a subscription-based SaaS company, or a digital service provider, your U.S. sales count toward economic nexus. This includes:
- Physical goods shipped from abroad
- SaaS subscriptions and downloadable software
- Digital products like e-books, templates, or online courses
SaaS businesses, particularly, many U.S. states consider cloud-based software as a taxable service. So, selling to U.S. customers could create a nexus, and therefore a tax collection obligation, even if your infrastructure is completely hosted in Europe.
Tax Registration Requirements for France-Based Businesses in the U.S.
Once your French business has established nexus in a U.S. state via physical presence or exceeding sales thresholds, you are legally obligated to go beyond establishing nexus. You are required to register with that state’s tax authority prior to collecting any sales tax.
This process may seem complex from abroad, but it’s manageable with the right steps and help from Commenda. Let’s break down the tax registration requirements for France-based businesses in the U.S.
1. Confirm Where You Have Nexus
Before registering, you must determine in which U.S. states you have nexus. This could be due to the Economic nexus If your sales exceed a state’s threshold. Physical nexus If you have a warehouse, employee, or office in the U.S.
Learn more in our Economic Nexus Sales Tax Guide.
2. Obtain a U.S. EIN (Employer Identification Number)
While an EIN is not universally required, many states, including certain states where a sales tax is applied, require its usage to complete the sales tax registration. French businesses can apply for an EIN online from the IRS website, or appoint a U.S. agent to apply for the EIN on their behalf.
3. Register for a Sales Tax Permit in Each Nexus State
There is no federal sales tax license in the U.S. you must register state by state. Here’s how: visit the Department of Revenue website for each state where you have nexus. Complete the online registration form. You’ll need:
1. Company name and French VAT number
2. U.S. mailing address (if available) or a registered agent’s address
3. Expected sales volume and product types
4. Your newly acquired EIN, if required
4. Know When You Need Foreign Qualification
In some states, registering for sales tax is enough. But if your France-based company has more substantial operations such as opening a U.S. office or hiring locally you may also need to register with the Secretary of State through a process called foreign qualification.
5. Wait for Your Permit Before Collecting
Once approved, the state will issue a sales tax permit or license number. You are now authorized to collect tax on sales shipped or delivered to customers in that state.
Never collect U.S. sales tax without registering first. Doing so is illegal and could leave your business personally liable for unremitted funds. If all of this seems like a headache, Commenda can help you expand to the U.S. without the stress. Get in touch today!
Collecting and Remitting U.S. Sales Tax
Collecting VAT from checkout is simple in France: it is a national rate and charged the same everywhere. In the U.S., collect sales tax in a similar manner, but the system is far more fragmented.
Once you have a nexus in a U.S. state, you are liable to charge sales tax at checkout – usually this is calculated real time, and reported as a line item on the invoice, just like VAT would in France.
However, since rates vary by ZIP code and frequently change, most businesses use automated tax software like Commenda to do the rate lookup and calculation at checkout.
Once you have collected sales tax, you will remit it to the state’s revenue department. In France, you will typically file only a single single with the national tax authority. The U.S. requires a separate filing for each state. While in both systems the seller collects and remits tax, the U.S. approach requires more detailed tracking and reporting, the added complexity of state by state compliance, and more frequent files across multiple jurisdictions.
Filing U.S. Sales Tax Returns from France
Do I need to register for U.S. sales tax as a French-based business?
If you have established nexus in any U.S. state through sales volume or physical presence, the answer is yes you must file U.S. sales tax returns.
Typically states assign a monthly, quarterly or annual filing period based on your sales volume, but even if no tax is collected many states require you to file a “zero return.” Returns are filed online through each state’s Department of Revenue and typically consist of your total sales, taxable sales, and tax collected or owed.
But for a business located in France, this is similar to French VAT filings you submit monthly, it simply has to be submitted separately for each state in which you have nexus. Compliance with multi-state sales tax can be daunting, but automation tools or working with U.S.-based tax advisors can make this a lot easier and less risk of errors.
The most common errors are remembering not to file returns by the due date, or forgetting to report marketplace sales even if Amazon or Etsy, etc., collected the tax.
U.S. Tax Compliance for SaaS Businesses from France
U.S. tax compliance for SaaS businesses from France is complex due to varying state rules. Many U.S. states now treat SaaS as taxable. For example, Washington taxes SaaS universally, while Arizona includes it under taxable services.
For France-based software companies, this means checking each state’s specific definition:
Is your SaaS classified as tangible software? A subscription service? Digital content?
These distinctions determine whether you must collect sales tax once nexus is triggered.
Most French SaaS exporters take a conservative approach collecting tax in every state where they meet economic nexus thresholds.
To simplify compliance, many rely on automation platforms like Commenda, which apply the correct product tax codes and real-time rates at checkout.
France Sales Tax Nexus in the USA: What It Means?
France sales tax nexus in the USA refers to the point at which your France business becomes obligated to follow U.S. state sales tax rules.
This connection can be physical like storing products in a U.S. warehouse or attending a trade show or economy, which happens when your sales in a state surpass a specific threshold.
Even without a physical presence, your France-based company can trigger economic nexus just by selling enough to customers in a particular state. For instance, if your yearly sales to California exceed $100,000, you now have a nexus there and must collect and remit California sales tax moving forward.
While France VAT doesn’t apply to U.S. exports, each U.S. state sets its own rules, and once you have nexus, compliance is mandatory.
How Commenda Helps France Businesses Stay Compliant
Commenda’s automated tax platform handles everything from rate calculation to registration and filing across all 50 states.
Because our software updates in real time as tax laws change, you can be assured that you will maintain compliance with your reseller obligations without having to keep up with ongoing research. Also you gain access to expert assistance for important tasks such as applying for a U.S. tax ID, managing exemption certificates, and responding to questions from the state.
For digital sellers and SaaS companies in particular, Commenda applies the right tax rules by product type and location, reducing the risk of over- or under-charging customers.
And if you’re ever audited or need help with documentation, our compliance team has your back. In short, Commenda takes care of U.S. sales tax so your France-based business can scale with confidence. Click here to Book a Demo!
FAQs: U.S. Sales Tax for French Businesses
1. Do France sellers have to collect U.S. sales tax?
Yes, if your France-based business has a nexus in a U.S. state due to sales volume or physical presence.Without nexus, you are not required to collect U.S. sales tax.
2. What are France sales tax rules for U.S. sales?
French exports are zero-rated for VAT, so no French tax applies.However, U.S. sales tax is based on state-level nexus and must be collected accordingly.
3. Do I need to register for U.S. sales tax as a France-based business?
Yes, registration is mandatory before collecting sales tax in any state where you have nexus.You must apply online through that state’s Department of Revenue.
4. What is the economic nexus U.S. sales tax for French businesses?
It’s triggered when your sales exceed a U.S. state’s threshold (e.g., $100,000 or 200 transactions).This creates a tax obligation even without physical presence in the U.S.
5. What are the tax registration requirements for France-based businesses in the U.S.?
You must register for a sales tax permit in each nexus state. Some states may also require a U.S. EIN or foreign qualification.
6. How do I collect and remit U.S. sales tax as a French company?
Use automated tools to charge accurate tax rates at checkout.Remit the collected tax to each relevant state based on your filing schedule.
7. How do I file U.S. sales tax returns from France?
File returns online with each state’s tax department, usually monthly or quarterly. Even if no tax was collected, some states require a “zero return.”
8. Are SaaS businesses from France subject to U.S. sales tax?
Yes, many states tax SaaS, subscriptions, and digital goods once the nexus is met. Taxability and rules vary by state.
9. What does “France sales tax nexus in the USA” mean?
It means your French business has a legal tax connection with a U.S. state. This obligates you to collect and remit sales tax under that state’s rules.
10. How does Commenda help France businesses with U.S. sales tax?
Commenda automates nexus tracking, registration, tax calculation, filing, and audit support to keep France businesses fully compliant with U.S. sales tax rules.
