Sales tax in the United States: what French companies still underestimate
- 1 day ago
- 6 min read
You sell SaaS subscriptions to American clients from France. You ship eCommerce orders to several states. You're testing the US market without a local subsidiary, thinking that tax issues will come later...
However, it is often at this point that the sales tax appears.
Because in the United States, the obligation to collect local taxes no longer depends solely on a physical presence. In many cases, your level of activity in a state is enough to trigger registration, collection, and reporting obligations. And for a French company accustomed to the VAT system, the difference is significant.
Since the South Dakota v. Wayfair ruling in 2018, all U.S. states that apply a sales tax have implemented economic nexus rules for remote sellers.
Sales tax is not VAT!
The first pitfall is believing that sales tax works like a local VAT. Unfortunately, this is not the case.
In the United States, there is no federal sales tax . Sales taxation is based on a complex set of rules established by the states, and sometimes also by local jurisdictions. Rates, thresholds, exemptions, reporting frequency, and the taxability of goods or services: everything can vary from one state to another.
Today, there are over 12,000 tax jurisdictions in the United States. For a French company, this changes everything. It's not a matter of mastering a single tax framework, but rather a fragmented, evolving, and far more operational one.
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What Wayfair has changed for foreign businesses
For a long time, the rule was relatively simple: without a physical presence on site, there was no obligation to collect sales tax. However, this interpretation is no longer valid.
Since the Wayfair decision, a state can impose an obligation on a remote seller solely based on its economic activity within that state. This is known as the economic nexus .
In practice, this means that a French company can become liable for sales tax without an office, warehouse and US subsidiary, simply because it has generated enough sales in one or more states.
In many states, the threshold is around $100,000 in sales , although the exact calculation method varies by jurisdiction. And by 2026, the trend is clear: several states have eliminated the number of transactions criterion, retaining only a revenue threshold.
The nexus doesn't just come from revenue.
While the economic nexus is attracting a lot of attention, it's not the only topic. The physical nexus also still exists.
It can be triggered by a local presence that seems minimal from the perspective of France: stock in a warehouse, a remote employee, a sales office, sometimes even certain forms of representation or service on site.
In other words, a company can find itself exposed even before reaching a state's sales thresholds.
This is particularly important for French SMEs that are progressing in stages in the American market: initial recruitment, a logistics partner, a marketplace presence, then a few direct sales. From a tax perspective, this issue can begin well before the complete legal structuring is in place.
Why the topic is even more sensitive for a SaaS
For an eCommerce business selling physical products , the question is already technical. For a SaaS and digital services business, it becomes a real headache.
Why? Because the taxation of software or online subscriptions varies from state to state , but also depending on the precise classification of the offering. Downloaded software, remotely accessible software, licenses, digital services, and data processing services are not taxed in the same way everywhere.
A few examples clearly illustrate the difference:
In California , electronically delivered software is generally treated as non-taxable
In Connecticut , certain pre-written software programs accessible electronically and used by a business may be subject to a specific rate, different from the standard rate.
In Texas , cloud-based SaaS is generally analyzed as a taxable data processing service, with a partial taxable base in certain situations.
The consequence is clear: for the same SaaS product, a "copy-and-paste" approach from state to state is dangerous. It's essential to examine the exact nature of the offer, the customer's location, the potential presence of exemptions, and the applicable reporting framework.
The most frequent mistakes made by French SMEs
"We only sell B2B, so we are not affected."
The first is to think that B2B sales do not pose a problem.
However, B2B transactions do not automatically eliminate sales tax. In some cases, the customer may be exempt, but they must have the proper supporting documents, including valid exemption certificates when required. Without these, the risk remains with the seller.
"We go through Amazon, Amazon is in charge."
The second mistake is believing that the marketplace solves everything.
A marketplace like Amazon, for example, often collects sales tax on sales made on its platform as part of marketplace facilitator rules.
But this doesn't automatically close all the issues: direct sales on your website, threshold calculations, registration requirements in certain states, consistency of tax documentation. Again, you need to look at the details.
"We haven't received any adjustment notice, so everything is fine."
The third mistake is the most classic: waiting.
Many companies tell themselves they'll deal with it later, when volumes become truly significant. The problem is that governments can go back in time to undeclared periods and claim taxes, interest, and penalties.
What you need to do specifically right now
Before discussing tools or automation, we must begin with a diagnosis.
The right approach is to conduct a Nexus audit :
analyze sales state by state over the last 12 months
identify the states in which a threshold has already been crossed, or is about to be crossed
check if a physical nexus already exists
Properly categorize the flows: physical products, SaaS, services, B2B, marketplace, direct sales
Once this framework is in place, we can move on to the next steps: registration in the relevant states, setting up collection on the right channels, implementing periodic declarations, and securing the documentation.
Tools like Avalara , TaxJar , or Stripe Tax can help automate some of the processes. However, they don't replace the initial qualification work or the configuration decisions. A poorly implemented automated setup doesn't make a tax position any fairer.
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The good news: it's not too late
Discovering the issue late does not always mean immediately experiencing the worst-case scenario.
Some states offer occasional amnesty or voluntary regularization programs. In Illinois, for example, a specific program for certain remote retailers is planned between August 1 and October 31, 2026 , with a period covered from January 1, 2021 to June 30, 2026 .
This type of mechanism shows an important point: it is better to deal with the subject upstream, in a logic of controlled compliance, than to discover it during a forced catch-up.
What Blendy does for you
At Blendy, we support French companies selling in the United States with a very operational approach.
The goal is not to generate yet another tax bill. The goal is to secure business development .
In concrete terms, this involves three projects:
identify the states that are truly at risk
clarify the applicable obligations according to your sales model
to establish sustainable compliance over time, in line with your tools and workflows
For an e-commerce business, this prevents an issue from escalating until the first audit. For a SaaS provider, it primarily prevents sales tax from being treated as a mere technical detail when it directly impacts pricing, billing settings, and margin risk.
Selling in the United States, yes. Selling blindly, no.
The American market remains a major opportunity for French SMEs. But a simple reality must be accepted: when it comes to sales taxation, the United States is far from being a large, homogeneous market.
The longer you wait, the more complicated the issue becomes. The earlier you address it, the more manageable it becomes.
Are you already selling in the United States or are you preparing for your expansion?
Now is a good time to check if sales tax has already become a topic of discussion in your company.
Sources:
With Blendy , international CPA based in France, Canada and the USA, take advantage of digital accounting and tailor-made advice to accelerate your financial process and develop your business.
Pennylane, Dext, QuickBooks and Stripe certified, we support digital and IT companies, e-Commerce, SaaS in France and internationally.
