# Tax for Single Member LLC non-resident alien owner



## anatta (Feb 20, 2020)

I owned an LLC registered in Wyoming, USA on 2019, it's a single member disregarded entity, I got EIN. I am non-resident, non-US citizen, does not pass US substantial presence test. I operate it 100% outside of USA.
My business is an online ecommerce store that sell products worldwide include USA, all products are shipped from warehouse in China. 
I don't have office, dependent or employee in USA. I register LLC so that I can get EIN to register in stripe.com payment processor.

There are so many conflicting answer even among CPA. Some say I don't need to pay tax to USA because I don't have physical presence, some say I do because physical presence is not an prerequisite.

Section 861(a)(6) ? Here I quote "Gains, profits, and income derived from the purchase of inventory property (within the meaning of section 865(i)(1)) without the United States (other than within a possession of the United States) and its sale or exchange within the United States."

It says WITHIN United States, NOT TO United States. So what I understand is that for that WITHIN to be true, the product has to be in United States warehouse for that within to be true, isn't it ? But because the product is located in warehouse in China, so it does not constitute as selling within United States ? But SOLD TO United States ? As the selling activity and shipping does not occur FULLY WITHIN United States, but from overseas to United States.

Any thoughts ? I am so confused by conflicting information

But I am aware that I need to file 5472 and 1120 forms.

This question has been marked as SPAM in 2 other tax forums, I have no idea what's wrong, if you going to mark this as SPAM also please let me know why first ?


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## Moulard (Feb 3, 2017)

My understanding and reading of that section . 

The money you make from goods your purchase outside the US and sell inside the US are treated as US sourced income.

Income is generally taxed at its source. So unless there is a tax treaty clause that re-sources this income the US would consider it taxable income.

Note paragraph (b) basically states that you can deduct the costs of good sold etc, so only the net amount that is considered income.

Its also worth noting that some tax treaties may change this treatment. Worth reading the US-Indonesia tax treaty.

The complicating fact is that you may not be considered to have a permanent establishment in the US and that may impact things like the taxation of business profits etc.

But business taxation is not an area I have any meaningful expertise... so happy to defer to others who may know better.


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