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I am an EU (Belgium) based indie developer preparing for the release of my first (game) app next week. I will be offering the game through the Google Play Store. For a lot of countries/regions, Google takes care of collecting and paying the taxes for me (EU, South-Korea, Marocco ...), but not so for US sales. For the US, I need to figure this out myself (or talk to an accountant, but my current accountant seems to have no experience with this).

With the information I have found so far, it seems like it boils down to whether or not I have "nexus" in the US or not. I would say that, by myself, I do not (not a US citizen, not living in US, business not situated in US).

"Please note that in the U.S., you are only required to collect sales tax in states where you have “sales tax nexus”. This occurs when your business has some kind of “physical presence” in a state, for instance; an office, employees, inventory, affiliates, a drop shipping relationship or selling products at a tradeshow or other event. If you have nexus in a state, then you have to apply sales tax to buyers in that state." (https://quaderno.io/blog/sales-tax-digital-products-us/)

However, I am selling through the Google Play Store. Does that change anything? Google says I remain the seller of record when selling apps. (https://support.google.com/googleplay/answer/2850368?hl=en)

Obviously, I'm hoping I don't need to collect sales tax, as managing/paying that administrative overhead doesn't seem feasible in regards to the small amount of sales I'm expecting. Meaning it might lead me to avoid the US market

This might also matter: the game app itself will actually be offered for free but will have InAppPurchases (to disable the infrequent ads/to support development).

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  • Google P.Store takes care of it all, and you have no decision in the matter. Note that the overwhelming problem you face on playstore / appstore is that you really need to be set up so that there is no withholding. (By using a corporation, a company in a non-fascist jurisdiction, or whatever is the relevant way to achieve that in your nation.)
    – Fattie
    Feb 22, 2018 at 16:03

2 Answers 2

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I'm Carlos, the founder of Quaderno. Thanks for sharing our article.
EU businesses don't have to collect any sales taxes in USA, unless they have a permanent establishment in that country, which is not your case. So don't worry about this.

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  • Wow, small world. :-) Thanks for the information/confirmation, Carlos. Now I just need to relay this to my accountant. And prepare for releasing in the US as well!
    – Saffron Streams
    Feb 23, 2018 at 7:11
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You don't have to collect any sales tax in the US. I'm in the US, and when I previously sold software online, I only had to collect sales tax for sales in my own state. Since you are not in any state, you don't need to do anything.

I also never collected any sales tax for other countries. I'm surprised that you would need to collect taxes in South Korea or Morocco, though I didn't sell through the Play Store and that may make a difference in those countries (it doesn't make a difference for the US).

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  • Seems logical, although that would mean that there's a difference between selling in US from EU and selling in EU from US: "Due to VAT laws in the EU, Google is responsible for charging, and remitting VAT for all content purchases by EU customers. Google will send VAT for EU customers' purchases to the appropriate authority.[...] Even if you're not located in the EU, this change in VAT laws will still apply." Then again, that would explain why Google has not implemented automated tax collection for US (I would think one of the bigger if not biggest market). Thanks for the response.
    – Saffron Streams
    Feb 22, 2018 at 16:01
  • Unfortunately Jeff, your experience has absolutely no connection to selling through the PlayStore.
    – Fattie
    Feb 22, 2018 at 16:04
  • Hi @Fattie, that is because it doesn't matter how you are selling. The US tax laws are the same whether you are selling through the Play store or selling some other way.
    – new name
    Feb 22, 2018 at 16:15

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