The U.S. Sales Tax Guide for Denmark-Based Businesses

The United States offers huge growth potential for Danish businesses, with over 325 million consumers and a $20 trillion economy. Selling physical products, digital goods, or SaaS in the U.S. is more accessible than ever thanks to platforms like Shopify and Amazon.

But the U.S. sales tax system is complex. Unlike Denmark’s uniform 25% VAT, U.S. taxes vary by state, with thousands of jurisdictions, differing rates, and unique compliance rules. For Danish businesses, understanding and managing these obligations can feel daunting, but with the right guidance, it’s entirely manageable.

In this article, we’ll cover everything you need to know about U.S. sales tax compliance for Danish businesses, from economic nexus to registration, collection, and filing.

Understanding U.S. Sales Tax

U.S. sales tax works very differently from Denmark’s VAT system. The U.S. has no federal sales tax; rates and rules are set at the state and local levels. This creates a patchwork where some states tax groceries or clothing, while others don’t. In contrast, Denmark applies a flat 25% VAT nationwide, with limited exemptions.

In the U.S., sales tax is charged at the point of sale and added at checkout, with no input tax credit for businesses. VAT, however, allows businesses to deduct input VAT and is usually included in displayed prices.

U.S. Sales Tax vs. Denmark VAT

Do Danish Sellers Pay U.S. Sales Tax?

Yes. Danish sellers must collect U.S. sales tax once they hit state-specific thresholds, even without a physical presence. This rule comes from the 2018 South Dakota v. Wayfair decision, which introduced the concept of “economic nexus.”

Who is affected?

Danish businesses selling to U.S. customers through any channel, including your own e-commerce website, Shopify stores, Amazon, eBay, Etsy, or other marketplaces, may trigger sales tax obligations. This includes:

• E-commerce retailers selling physical products
• SaaS companies offering cloud-based software subscriptions
• Digital product sellers (e-books, courses, downloads, streaming services)
• B2B and B2C sellers
• Businesses using fulfillment centers or third-party logistics providers in the U.S.

If you sell via Amazon FBA or use U.S. warehouses, you may also create a physical nexus. While marketplaces often collect tax on your behalf, you’re still responsible for sales through your own website or direct channels.

Economic Nexus and Sales Tax Rules for Danish Businesses

Understanding the economic nexus is crucial for Danish businesses entering the U.S. market. Economic nexus U.S. sales tax for Danish companies means you have a tax collection obligation based purely on your sales volume into a state, regardless of whether you have employees, offices, or inventory there.

How the economic nexus works

Most states now use a $100,000 annual sales threshold as the economic nexus trigger. If your Danish business generates $100,000 or more in sales to customers in a particular state within 12 months, you must register to collect sales tax. Some states still have transaction-count thresholds, though many eliminated these in 2024–2025.

Important threshold variations

Not all states use the $100,000 standard. Examples include:

• California: $500,000 threshold
• Texas: $500,000 threshold
• New York: $500,000 and 100 transactions
• Alabama: $250,000 threshold

Some states count all sales toward the threshold, others only taxable retail sales, which is important for Danish B2B sellers..

Tax Registration Requirements for Danish-Based Businesses in the U.S.

Once your Danish business establishes nexus in a U.S. state, registration becomes mandatory before you begin collecting sales tax. The tax registration requirements for Danish-based businesses in the U.S. vary by state but generally follow a similar process. Here’s the step-by-step registration process:

Step 1: Obtain a U.S. Employer Identification Number (EIN)

Most states require an EIN from the IRS. Applications can be submitted online, by fax, or by mail. Have your Danish CVR number and business documents ready.

Step 2: Determine which states require registration

Identify states where you’ve triggered economic nexus or have a physical presence. Focus first on states with the highest sales volumes.

Step 3: Register with each state’s department of revenue

Provide EIN, business details, contact info, estimated sales, filing frequency, and start date. Processing times vary based on office workload and different states; online filings are generally processed in approximately 7 business days. Processing in 2 business days costs an additional $120. 

The average fee is around $186, with some states charging as low as $50 (e.g., Hawaii, Michigan, Missouri) and others up to $750 (e.g., Texas, South Dakota)

Step 4: Understand your filing frequency

States assign monthly, quarterly, or annual filing based on expected tax liability. Frequency can change as sales grow.

Step 5: Obtain and display your sales tax permit

After approval, you’ll receive a permit or certificate. Keep documentation organized for filings; online-only sellers may not need to display it publicly.

Special considerations for Danish businesses

Foreign entities may require a registered agent or additional documentation, which may need to be notarized or translated. Working with a compliance provider familiar with international registrations can simplify the process. 

Collecting and Remitting U.S. Sales Tax

Once registered, you must charge U.S. customers the correct state and local sales tax, then remit it to each state. Unlike Denmark’s flat 25% VAT, which is included in prices, U.S. sales tax is usually added at checkout.

How it works in the U.S.:

• Tax is based on the customer’s location (destination-based).
• Rates vary widely, even within one state.
• Product taxability differs (e.g., clothing may be exempt in one state but taxable in another).
• Exempt customers need valid exemption certificates.
• Remittance schedules vary, ranging from monthly to quarterly to annual, depending on the state.
• Software like Commenda helps automate rate calculations and filings.

U.S. Sales Tax vs. Denmark VAT

Filing U.S. Sales Tax Returns from Denmark

Filing U.S. sales tax returns from Denmark presents logistical challenges but is entirely manageable with proper systems. The question “Do I need to register for U.S. sales tax as a Danish-based business?” has been answered, yes, if you have nexus. Now, let’s address how to maintain compliance through proper filing.

Filing frequencies and deadlines

1. Monthly: States generally require returns by the 20th of the month following the month of purchase. This aligns with high-volume sellers.

2. Quarterly: Returns are typically due 20–30 days after the end of each quarter. Your research shows exact quarterly periods and deadlines:

• Q1 (Dec–Feb) → due 20 March
• Q2 (Mar–May) → due 20 June
• Q3 (Jun–Aug) → due 20 September
• Q4 (Sep–Nov) → due 20 December

3. Annual: Some states allow annual filing; deadlines vary by state, but January 15th for the prior year is correct for certain jurisdictions. Deadlines vary by state; late filings can trigger penalties.

The filing process

Report gross sales, exempt sales, taxable amounts, tax collected, and deductions via state portals. Some states require county- or city-level breakdowns. Maintain detailed records to support filings.

Common mistakes to avoid

• Failing to file zero returns
• Double-reporting marketplace sales
• Ignoring local jurisdictions
• Missing multiple state deadlines
• Not keeping supporting documentation for audits

Filing from Denmark

Account for time zone differences and build buffer days before deadlines. Most portals work internationally, but compliance platforms that consolidate filings across states simplify the process and reduce errors.

U.S. Tax Compliance for SaaS Businesses from Denmark

Danish SaaS companies face unique challenges with U.S. tax compliance. Unlike physical products, SaaS taxability varies by state, and rules continue evolving. Around 20–25 states currently tax SaaS, with states like Texas and Pennsylvania taxing all subscriptions, while others exempt certain enterprise licenses. Bundled services, customer type (B2B vs. B2C), and determining where the service is “delivered” add complexity.

Economic nexus can be triggered quickly for SaaS due to high subscription values; just 42 users at $200/month can hit a $100,000 threshold. U.S. tax compliance for SaaS businesses from Denmark requires monitoring state rules, accurately classifying customers, configuring billing systems, and tracking nexus thresholds. Prioritizing compliance from launch avoids retroactive obligations and ensures smooth expansion into the U.S. market. Understanding why sales tax is important helps contextualize these compliance requirements.

Danish Sales Tax Nexus in the USA: What It Means

“Denmark sales tax nexus in the USA” refers to the connection between your Danish business and a U.S. state that creates an obligation to collect and remit sales tax. In simple terms, nexus is the point at which a state can require your business to charge tax on sales to customers there.

What creates a nexus?

• Economic nexus: Crossing state sales thresholds (usually $100,000/year).
• Physical nexus: Having inventory, employees, or offices in a state (e.g., via Amazon FBA).
• Affiliate nexus: Using U.S.-based affiliates or agents generating significant sales.
• Click-through nexus: Receiving sales referrals from U.S. websites above state thresholds.

Practical implications

Once nexus is established, you must register for a sales tax permit, collect the correct tax, file returns on schedule, and maintain records for audits. Multi-state nexus adds complexity; each state has separate rules, rates, and filing requirements. Unlike Denmark’s centralized VAT system, U.S. compliance requires robust processes and often automation to manage multiple states efficiently. Planning for multi-state compliance from the start helps avoid penalties, audits, and disruptions as your U.S. business grows.

How Commenda Helps Danish Businesses Stay Compliant

Managing U.S. sales tax while running your Danish business can be complex, but Commenda’s automated platform simplifies the process for international companies. Here’s why Danish businesses choose Commenda:

• Automated nexus tracking: Monitors sales across all states and alerts you when economic nexus thresholds are approached.
• Simplified registration: Guides your business through state registrations, handling foreign entity requirements.
• Accurate tax calculation: Integrates with e-commerce or accounting platforms to calculate correct rates automatically.
• Automated filing and remittance: Prepares and submits returns per state schedules, removing the need to manage multiple portals.
• Exemption certificate management: Collects and stores certificates securely for audit protection.
• Audit support: Assists with documentation and state inquiries if audited.
• SaaS and digital product compliance: Handles evolving rules for software and digital services.
• International support: Manages multi-currency and cross-border banking needs.
• Real-time reporting: Dashboards show liability, filing status, and compliance at a glance.
• Expert guidance: Provides tailored advice for Danish businesses navigating U.S. sales tax.

Commenda combines automation, accuracy, and expert support to make U.S. tax compliance simple for Danish businesses. From registration to real-time reporting, every detail is managed with precision. With Commenda, expanding into the U.S. becomes organized, compliant, and stress-free.

Conclusion

Entering the U.S. market presents huge growth potential for Danish businesses, but navigating sales tax compliance can seem daunting compared to Denmark’s VAT system. The key is to stay proactive, understand nexus thresholds, register promptly, use automation for rate calculations and filings, and keep accurate records. With the right systems in place, U.S. compliance becomes manageable and far less disruptive.

By treating sales tax compliance as part of your core operations, you reduce risks, avoid penalties, and free up resources to focus on growth. Whether you run SaaS, e-commerce, or B2B sales, expert guidance ensures you meet obligations while scaling confidently. Book a free demo with Commenda today to see how we simplify U.S. sales tax compliance for Danish businesses.

FAQs: U.S. Sales Tax for Danish Businesses

1. Do Danish sellers need to collect U.S. sales tax on digital products?

Yes, in many states. Around 25–30 states tax digital goods like e-books, SaaS, and streaming, but rules differ widely.

2. How is the U.S. sales tax different from Denmark’s VAT system?

Denmark has a flat 25% VAT with input credits and centralized filing. The U.S. has state-by-state sales tax, no input credits, and varying rates, rules, and filing schedules.

3. What triggers economic nexus for Danish businesses in the U.S.?

Exceeding state thresholds, commonly $100,000 in sales, though some states use $500,000 or transaction counts. Thresholds and periods vary by state.

4. How can a Danish-based e-commerce business register for U.S. sales tax?

Obtain a U.S. EIN, then register with each state where you have nexus. Most states require online applications; compliance providers can simplify the process.

5. Are there any U.S. states where Danish sellers don’t have to collect sales tax?

Yes. Alaska, Delaware, Montana, New Hampshire, and Oregon have no statewide tax. No collection is needed in states where you don’t meet nexus thresholds.

6. What tools help Danish SaaS companies stay compliant with U.S. sales tax?

Platforms like Commenda automate rate calculations, nexus tracking, and filings, and integrate with billing systems like Stripe or Chargebee.

7. How often do Danish businesses need to file U.S. sales tax returns?

It depends on the state and sales volume, monthly, quarterly, or annually. Each state assigns its own filing frequency and deadlines.

8. What are the penalties for not complying with U.S. sales tax laws as a Danish-based seller?

Penalties include late fees, interest, retroactive assessments, and, in severe cases, personal liability or criminal charges. Non-compliance also risks audits and reputational damage.