Hi guys, let's discuss US LLC taxes for a nonresident.
I've seen many videos on youtube that say there be no taxes for the nonresident because it's a pass-through entity.
But it clearly says that you will be taxed if you have received a US-sourced income.
What about sales tax? if the customer is from the US and you sell a digital product, should you collect it?
Let's just find an answer together and save that thread so no one will ask it anymore.
Some people also say that it depends where your PE is like you can still sell to US customers and pay 0% because you don't have employees there and you don't live there etc.
"Nonresident aliens are only subject to U.S. taxation on income from U.S. sources. Foreign-sourced income received by nonresident aliens is not subject to U.S. taxation. This is unlike resident aliens who are taxed on worldwide income (income from both U.S. and foreign sources).
Generally, U.S.-sourced income includes all income received from U.S. organizations or individuals and compensation received from both U.S. and foreign organizations or individuals for work performed in the U.S.
Income is considered foreign-sourced if the location of the activity for which the payment is being issued is not in the U.S.
If the source is unclear at the time of payment, the payment is treated as U.S.-sourced income and taxed accordingly."
I've seen many videos on youtube that say there be no taxes for the nonresident because it's a pass-through entity.
But it clearly says that you will be taxed if you have received a US-sourced income.
What about sales tax? if the customer is from the US and you sell a digital product, should you collect it?
Let's just find an answer together and save that thread so no one will ask it anymore.
Some people also say that it depends where your PE is like you can still sell to US customers and pay 0% because you don't have employees there and you don't live there etc.
"Nonresident aliens are only subject to U.S. taxation on income from U.S. sources. Foreign-sourced income received by nonresident aliens is not subject to U.S. taxation. This is unlike resident aliens who are taxed on worldwide income (income from both U.S. and foreign sources).
Generally, U.S.-sourced income includes all income received from U.S. organizations or individuals and compensation received from both U.S. and foreign organizations or individuals for work performed in the U.S.
Income is considered foreign-sourced if the location of the activity for which the payment is being issued is not in the U.S.
If the source is unclear at the time of payment, the payment is treated as U.S.-sourced income and taxed accordingly."
| Type of Income | Factor Determining Source |
| Salaries, wages, other compensation | Where services performed |
| Business income: Personal services | Where services performed |
| Business income: Sale of inventory - purchased | Where sold |
| Business income: Sale of inventory - produced | Where produced (Allocation may be necessary) |
| Interest | Residence of payer |
| Dividends | Whether a U.S. or foreign corporation (some exceptions) |
| Rents and Sale of real property | Location of property |
| Royalties: Patents, copyrights, etc. | Where property is used |
| Sale of personal property | Seller's tax home (some exceptions) |
| Pensions | Where services were performed that earned the pension |
| Scholarships - Fellowships | Generally, the residence of the payer |
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