Do I owe US sales tax with no US company?
You can. US sales tax is not a federal tax and it is not covered by the treaty, so having no US entity settles nothing on its own. Each state applies its own rules to sellers outside its borders, and economic activity alone — sales made into the state — can be enough. A seller shipping from Canada with no office, no staff and no subsidiary anywhere in the country can still be required to register and collect in a long list of states. The first question is therefore not whether you have a US company, but which states your sales actually reach and what each of those states asks of a seller.
Does the Canada US tax treaty cover state sales tax?
No. The treaty is an agreement about income taxes between two federal governments, and state sales tax sits outside it entirely. That has two consequences worth knowing. Relief you may be used to on the income tax side — a permanent establishment test, a reduced rate, a credit for tax paid elsewhere — has no equivalent here. And there is no single authority to deal with: each state decides for itself what creates an obligation, what is taxable, and how often you file. Treaty analysis is genuinely useful for your income tax position. It will not answer a question about collecting tax on a sale into a state.
Does stock in a US warehouse create sales tax nexus?
Physical presence creates nexus in its own right, independently of any sales test, and inventory held in a state is physical presence. So goods sitting in a fulfilment centre or a distributor warehouse can create an obligation in that state from the moment they arrive, whatever your sales into it look like. This catches sellers who moved stock closer to their customers to shorten delivery times and treated it as a logistics decision. Where stock is spread across several centres, each state holding it has to be looked at separately. Ask your fulfilment provider for a list of the locations your goods have actually been stored in.
I am registered in one state, does that cover the others?
It does not. Registration is a relationship with one state revenue authority, and it does nothing for the state next door. Each state has its own registration, its own return, its own filing frequency and its own view of what your product is. A seller registered in a handful of states and collecting correctly in all of them can still be unregistered in others where an obligation has already started. The practical consequence is that this is a portfolio to be monitored rather than a task to be finished: as sales shift between states, the set of states you owe something to shifts with them.
Is my product taxable in every state I sell into?
Not necessarily. Taxability is a state-level question, so the same item can be taxable in one state, exempt in the next, and taxed at a different rate in a third. Services, software and digital products vary the most widely, and shipping charges are treated differently from state to state as well. This matters before you register rather than after: registering in a state where your supply is not taxed adds returns without adding tax, and assuming an exemption travels with the product is how sellers under-collect. The work is a product-by-product, state-by-state determination, written down so the same answer gets applied consistently.
What happens if I should have been collecting and did not?
The duty to collect belongs to the seller, so tax that was never charged to customers is generally looked for from the seller rather than from them. That is the uncomfortable part: the amount has to come out of margin already earned, because the sales it relates to are long since invoiced. Exposure builds from the date the obligation started, which is why late detection costs more than the tax itself. States commonly operate disclosure routes for sellers who come forward before being contacted, and the terms of those routes are better than the terms after an enquiry. So the order of work is: establish the start dates first, then decide how to approach each state.
What is a totalization agreement and how do I use one?
A social security agreement that stops you contributing to two systems for the same work, and lets periods in both count towards benefit eligibility in either. Which system you stay in depends on the agreement's rules for your situation — a seconded employee usually remains in the home system for a set period, a locally hired one usually joins the host system. You evidence it with a certificate of coverage obtained before or shortly after the assignment starts. See certificates of coverage.
Does hiring one remote employee in another country create a tax presence?
It can, on two separate fronts, and the second applies even when the first does not. A permanent establishment may arise if the employee has a fixed place of business there or concludes contracts for you. Independently of that, employing someone locally generally brings payroll registration, wage withholding and social security contributions in their country from the first payroll — obligations that do not wait for a permanent establishment finding. Contractor paperwork does not by itself avoid either. See remote work and tax exposure.
