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Should U.S. sellers collect sales tax on orders shipped directly to to Europe?

Full Question: European consumers order goods (e.g. computers, sport equipment, clothes ...) at US manufacturers or retailers, who are supposed to ship the goods directly to Europe. Do the US companies have to bill sales tax? In case they don't have to: what kind of regulations do both parties (customer and manufacturer/retailer) have to survey?

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Answer:

Diane Yetter photoThe determination as to whether tax applies on orders placed with US sellers for delivery outside the US is dependent on whether the goods are truly delivered into foreign commerce or if they are delivered into the US. For example, if the customer who is visiting the US makes a purchase and takes the goods with them and leaves the country with the goods, the sale is almost always taxed at the retailers location. This is because the goods were delivered in the US. If however, the retailer is responsible for shipping the goods outside the US directly to the foreign location, this will generally not be deemed taxable in the US. The question as to whether the US retailer is required to charge tax in the foreign jurisdiction is based on the laws in the foreign jurisdiction. That question is outside the realm of my expertise. If you need further assistance with this matter, please feel free to contact us directly.

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