E-Commerce & Retail

Dow & Sohn CPAs provides U.S. tax, accounting, and advisory services to Korean e-commerce and retail companies entering and expanding in the U.S. We support businesses selling through Amazon, TikTok Shop, Shopify-powered direct-to-consumer (DTC) stores, and other online and retail channels. From sales tax and multi-state nexus to inventory accounting, financial reporting, and cross-border transactions between Korean headquarters and U.S. operations, we help manage the tax and accounting requirements of U.S. sales and operations.

Industry Overview: Navigating U.S. E-Commerce & Retail

Selling products in the U.S. involves more than federal income tax. Businesses must also consider state tax and accounting matters, including sales tax obligations, state income tax nexus, inventory and revenue recognition, marketplace transactions, and intercompany transactions with overseas headquarters.

Dow & Sohn CPAs helps Korean companies understand and effectively manage these tax, accounting, and compliance requirements as they establish and grow their U.S. operations.

Our Services

U.S. Tax & Compliance

We support U.S. subsidiaries and businesses with federal and state income tax filings, ongoing tax compliance, and tax planning.

Sales Tax & Nexus

We analyze state sales tax nexus for e-commerce and retail operations and support registration, sales tax filing requirements, and multi-state compliance.

Accounting & Financial Reporting

We assist U.S. operations with accounting oversight, financial statements, management reporting, and U.S. GAAP financial reporting.

Inventory & Cost Accounting

We support product-based businesses with inventory accounting, cost of goods sold (COGS), landed costs including import and transportation costs, and related financial reporting.

Cross-Border & Transfer Pricing

We assist with product transactions, management fees, service fees, and other intercompany transactions, transfer pricing, and cross-border tax matters between Korean headquarters and U.S. entities.

Frequently Asked Questions

Q1. Does an e-commerce business need to collect sales tax in every U.S. state?

Not necessarily. Obligations generally depend on nexus with each state. Nexus may arise from physical presence or from exceeding a state’s economic nexus sales thresholds. Businesses using Amazon, TikTok Shop, Shopify, or other channels should evaluate their combined sales and business activities by state.

Q2. Who is responsible for sales tax on Amazon and TikTok Shop sales?

In many states, marketplace facilitator laws require qualifying platforms such as Amazon and TikTok Shop to collect and remit sales tax on marketplace transactions. Sellers may nevertheless retain separate registration or filing obligations based on inventory locations, direct sales, and other business activities.

Q3. Is sales tax different when selling through a Shopify store?

It can be. Unlike marketplace transactions where a facilitator may collect and remit sales tax, businesses selling through their own Shopify-powered DTC stores may be responsible for determining their sales tax nexus and collecting and remitting applicable taxes.

Q4. What if a business sells through Amazon, TikTok Shop, and Shopify at the same time?

Review total U.S. sales and activities on a combined state-by-state basis rather than considering each platform separately. Marketplace sales, DTC sales, inventory locations, fulfillment arrangements, and other business activities can affect sales tax and state income tax nexus differently.

Q5. Can a Korean company sell to U.S. customers through Amazon, TikTok Shop, or Shopify without a U.S. subsidiary?

Yes, depending on the business model. Direct sales from Korea through these or other channels may still create U.S. federal and state tax, sales tax nexus, and other compliance requirements. Evaluate direct sales by the Korean parent against a U.S. subsidiary before expanding U.S. sales.

Q6. What tax issues should a Korean e-commerce company consider when entering the U.S.?

Key considerations include U.S. entity structure, federal and state income taxes, sales tax nexus, inventory locations, marketplace sales through Amazon and TikTok Shop, Shopify-powered DTC sales, intercompany transactions, transfer pricing, and financial reporting.

Q7. How are transactions between a Korean parent and its U.S. subsidiary handled?

Transactions between related Korean and U.S. companies should generally follow the arm’s-length principle. Product purchases, management fees, royalties, service fees, and other intercompany transactions may require appropriate transfer pricing policies and documentation.

Q8. Can Dow & Sohn CPAs support businesses selling through Amazon, TikTok Shop, and Shopify?

Yes. We support Korean e-commerce and retail companies selling through Amazon, TikTok Shop, Shopify-powered DTC stores, and other U.S. channels. Services include U.S. tax and accounting, sales tax and nexus, inventory accounting, financial reporting, transfer pricing, and Korea–U.S. cross-border advisory.