Do you need an ITIN to sell online in the US?

Three questions decide it

Where your customers live doesn’t decide whether you need a US tax number. These three things do:

1. Are you a US person for tax purposes? That means a US citizen, a green card holder, or someone who meets the IRS’s substantial presence test. If you are, platforms ask for a Form W-9 with an SSN, or an ITIN if you can’t get an SSN.
2. Do you sell as yourself or through a company? A non-US company certifies on Form W-8BEN-E. A US company uses its EIN.
3. Do you have to file a US federal tax return yourself? If you do and you have no SSN, you need an ITIN for that return, whatever the platforms ask.

If the answer to the first and third is no, you almost certainly don’t need an ITIN to sell online.

Which number fits your setup

The third row is the one most often filled in wrong. The IRS says the owner of a disregarded entity, not the entity, submits the W-8BEN, and that a foreign owner uses a Form W-8 instead of a W-9 “even if the foreign person has a U.S. TIN.” The W-8BEN guide explains each field.

What each platform asks for

Each platform has its own screens and thresholds. In short:

Do you owe US tax on sales to US customers?

It depends on whether the IRS sees your business as a US business. A nonresident is taxed on two kinds of US income: income effectively connected with a US trade or business, taxed at graduated rates after deductions, and FDAP income such as royalties, taxed at a flat 30% or a lower treaty rate.

Sales of goods generally aren’t FDAP: the IRS excludes gains from selling property from that category. So the 30% flat rate, which applies to things like royalties, isn’t the rule for product sales.

The harder question is the first category. The IRS says that “if a foreign person owns and operates a business in the U.S. selling services, products, or merchandise, the foreign person is, with certain exceptions, engaged in a trade or business in the U.S.” If that describes you, you file Form 1040-NR, and that return needs an ITIN. Whether an online store run from abroad reaches that point depends on how and where the business operates, and a tax treaty with your country can change the answer. This is a question for a tax professional, not for a platform’s tax form.

Two related points:

• Self-employment tax. The IRS says nonresident aliens aren’t subject to it, unless a Social Security agreement between the US and their country says otherwise. Resident aliens are.
• Sales tax. US sales tax is run by each state and is separate from income tax. An ITIN doesn’t register you for it.

When you need an ITIN, and when you don’t

• You need one if you live in the US for tax purposes and can’t get an SSN.
• You need one if you have to file a US federal return, such as Form 1040-NR.
• You may want one to claim a treaty rate on royalties, such as KDP, if your country doesn’t issue tax numbers.
• You don’t need one to register on Amazon, Etsy or Shopify as a non-US seller.
• You don’t need one to get an EIN for a US LLC.

If you do need one, you apply with Form W-7, usually attached to your tax return. How to apply for an ITIN walks through it step by step.