EFFECTS OF THE USA SALES TAX REGULATIONS ON ITALIAN COMPANIES SELLING IN THE USA

To date, it is possible to observe how the American sales tax regulation is involving a lot of changes in the 50 Member States but also word wide.

Sales tax concerns sale of products and services charged on ends users at the time of purchase and deposited by sellers. The amount of this tax, has to be calculated with multiplying the purchase price with the share percentage established by State of the transaction and it is between 1 and 11%.

Initially, for the application of the sales tax was needed the substistence of two requirements: one territorial (the products or services had to be purchased or distributed in the State where the seller is physically established) and one linked to the purpose (the products or services had to be purchased or distributed for to end user).

Currently, the new rules and jurisprudence are expanding the subjects of this tax. Indeed, for the application this regulation, is enough that a subject with non-USA nationality, has established an economic presence in the USA (“nexus”). This presence can be verified regardless the existence of offices, equipment, storage, employee on territory, also for a short time.

In any cases, the burden of proof of the not-existence of the purpose requirement in order to have the exemption, lies with the seller.

Some exemptions of objective nature are established in some jurisdictions; for example, the New York State not apply the sales tax at the all sales of clothes and footwear of value lesser than 100 $; other States provide to exemption with regard the services category.

It is important specify that is enough the presence of agents on the us territory for the existence of a “nexus” presence.

With regard to electronic trade, some States have increased the definition of economic presence, with the purpose to include also the big virtual business owner.  This because it was verified a competitive imbalance between traditional sellers and virtual sellers.

For example, "Amazon Tax" is a legislative provision issued by the New York State, with the purpose to insert a presumption regarding the economic presence existence towards all sellers that have stipulated economic contracts with natural persons or legal entity residing in the State, with the aim to carry out any solicitation of sales, through link, banner and any other instrument, regardless the physical presence on the territory.

The Massachusetts State, considers cookies or the app owned by a virtual seller set up on computers or smartphones of a resident, as an indicator of a nexus.

Recently, the Supreme Court of the United States, with the Wayfair ruling has stated about the constitutionality of economic presence criteria towards sellers, that had realized in the territory and in a year, incomes greater than 100'000 $ or 200 sale transaction.

Waiting for new developments and an uniform regulation, the Italian companies must conform to the USA fulfilments if they sell taxable goods or services, in order to avoid penalty.

In particular, foreign companies working ­­­­business to consumer are subjected to this tax and have to prepare correctly the documents related to the origin and destination of goods and the ones eventualy related to the exemption. Otherwise they must be registrated to the tax office of the involved jurisdiction.

 Our staff is available for any clarification.