Detailed explanation of U.S. cross-border e-commerce tax policy: historical evolution from tax exemption to taxation

As a pioneer in the development of global e-commerce, the United States has a long history in the field of e-commerce. As early as 1996, the U.S. Department of the Treasury issued the “Global E-Commerce Selective Tax Policy,” which established the principle of e-commerce tax neutrality and advocated no additional taxes on the emerging e-commerce industry. However, as the scale of the e-commerce market continues to expand, its impact on the traditional physical retail industry has become increasingly significant, especially the problem of unfair competition caused by the tax-free policy.

In response to this phenomenon, some senators submitted the Market Fairness Act (2011) to Congress in 2011, aiming to resolve the issue of whether e-commerce companies should pay state sales tax. Although the bill was not officially implemented in the end, it marked the beginning of the U.S. government’s efforts to face up to and try to solve the tax imbalance between e-commerce and physical retail. In 2013, the Market Fairness Act of 2013 received broad support in the Senate and authorized eligible states to collect sales tax on remote sales.

In recent years, states in the United States have strengthened tax supervision on large e-commerce platforms such as Amazon, requiring them to collect sales tax on specific goods and services. As of the end of 2017, Amazon has levied consumption tax on consumers in 45 states and the District of Columbia in the United States, and starting in 2018, it will charge an additional 8.39% consumption tax on all orders shipped to Washington State through FBA or FBM.

For Chinese cross-border e-commerce sellers, entering the US market requires understanding and complying with local tax regulations. According to U.S. tax laws, cross-border e-commerce is required to pay two main types of taxes: income tax and sales tax. When a seller has an office or employees in a certain state in the United States, there is a sales tax nexus, and the seller needs to declare and pay the corresponding sales tax to that state. It is worth noting that even without establishing a physical presence, sales tax obligations may be triggered as long as sales or transaction volume reach certain thresholds.

In addition, for sellers who sell products through platforms such as Amazon, some states in the United States have required these online marketplaces to collect sales tax from buyers on their behalf. However, for those states that have not yet implemented such regulations, sellers are still required to apply for a sales tax ID and complete the tax filing process themselves. In contrast, independent website operators are required to perform relevant tax responsibilities completely independently.

To sum up, with the acceleration of globalization and the increasingly frequent trade exchanges between countries, understanding and adapting to the tax policies of the target market has become one of the key factors for the success of cross-border e-commerce. The complex state-level tax system and ever-changing laws and regulations in the United States require sellers to pay close attention to the latest developments and ensure compliant operations.

The above information is compiled from multiple articles.