Incorporation · Legal

Does an Internet startup selling in the USA need to pay tax in the USA, even if it is not registered there? If so, how is this tax withheld?

Sandeep C Cofounder and UX expert working on a new SAAS idea

Last updated on March 25th, 2018

I have read in a few blogs / articles about the need to pay taxes on income from different US states where my customers may be located, and therefore establishes some sort of nexus with that state. However, what is confusing to me is how should I collect / pay tax for every single state even though I have physical presence in the USA. For instance, customers use my SAAS app, and pay me a monthly recurring fee. This is handled by the payment gateway. However, my SAAS is registered in another country (like Singapore). The question is do i have to declare / pay taxes in the USA even though my company has no "physical" presence such as office, employees etc? Thanks.

Marcia Allen Founder and COO BioTech Solutions Enterprise Group, Ltd, LLC

March 25th, 2018

I don't think you have to pay taxes at all because this is a service. I run a service company and I don't pay taxes on what I collect as you would if you're reselling a physical product. However I pay taxes at the end of the year based on the profit of my company.

Gregory Giagnocavo Serial Entrepreneur

March 25th, 2018

HelloIf you have NO presence in the USA, then no. Having said that, the USA is really mean and territorial. A "presence" for tax purposes could, in select instances, be ascribed to you if you have a USA mailing address or telephone number. But if you have no presence in the USA, no servers in the USA serving your SaaS customers, I would not worry about it.