Inventory in CastleGate: State Nexus and U.S. Income Tax Risk for Foreign Wayfair Suppliers
When a Chinese factory places goods in Wayfair's CastleGate warehouses, it has physical presence in each inventory state, which can bring sales tax registration and franchise tax, and states generally ignore the U.S.-China treaty. Federal tax turns on ECI: produced inventory is generally sourced where it's made, but a U.S. office, staff or agents can change that.
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