Legal Question in Business Law in

US tax liability for foreign mail-order business

What is the US stand-point on mail-order business by non-US resident companies shipping to US and using a Website Hosting Company with a server physically located within the United States.

Would it be considered doing business in the USA and therefore be subject to any taxes?

I might state that none of the shareholders of the company would be US Citizen and all goods would be non-US made and shipped from abroad.

Thanks for any answer you might be able to give me.


Asked on 2/08/99, 10:45 am

2 Answers from Attorneys
Patrick Tracy Patrick J. Tracy, Esq, P.E.,

Re: US tax liability

This is a very unsettled area of the law. However, since you have stated that the server is located within the United Sates, I believe that you are subject to US tax liability and depending on the state where the server is located you may be subject to other state taxes. Check with a CPA on the state tax issue.

Patrick Tracy

Patrick J. Tracy, Esq, P.E., P.C.

P.O. Box 34576


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Answered on 2/09/99, 6:42 am
Timothy J. Walton Internet Attorney

Re: US tax liability for foreign mail-order

The webserver might be considered a sales agent and thus subject the transaction to sales tax in the state where the machine is located. This will depend upon state law, which varies from state to state.

If the webserver is or will be located in California, I can give you a more detailed answer if you send email to [email protected]

You can also see my website at http://www.netatty.com

Timothy J. Walton

Internet Attorney

1896 San Ramon Avenue


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Answered on 2/09/99, 2:44 pm


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