TITLE: US Tax and Nexus Changes in August 2026: What International Sellers Need to Know
If you sell from the UK, Canada, Australia or the EU into the USA, three August 2026 developments deserve attention:
- IRS interest rates remain unchanged for the fourth quarter of 2026.
- Kentucky has removed its 200-transaction economic nexus test.
- The 2026 Form 720 includes new compliance requirements for certain excise-tax and remittance-transfer activities.
These changes will not affect every ecommerce or digital business in the same way. The key is to separate ordinary sales tax compliance from federal information returns, excise taxes and withholding obligations.
Review the IRS rates before a balance becomes expensive
The IRS has confirmed that the fourth-quarter 2026 interest rates will hold at the third-quarter levels.
For 1 October to 31 December 2026, the published rates are:
- 7% for standard corporate and non-corporate underpayments.
- 7% for non-corporate overpayments.
- 6% for corporate overpayments.
- 4.5% for the portion of a corporate overpayment exceeding $10,000.
- 9% for large corporate underpayments.
- 4% for IRC section 6603 deposits.
The IRS compounds these rates daily. This means a late balance can grow steadily even when the original error appears small.
For example, if an international seller has a $10,000 federal underpayment outstanding, the annual rate is 7% before daily compounding and any applicable penalties. A delayed reconciliation can therefore create a larger payment obligation than expected.
The rates apply to qualifying federal tax liabilities, including liabilities connected with Form 720. They do not create a separate interest-rate regime for overseas businesses.
Read the IRS quarterly interest rates and Revenue Ruling 2026-15 when reviewing a balance or payment plan.
Recheck Kentucky nexus after the August rule change
Kentucky changed its remote-seller and marketplace-provider rules from 1 August 2026.
House Bill 757 removed the economic nexus test based on 200 or more sales transactions. The $100,000 gross-receipts threshold remains the key economic nexus measure for remote retailers and marketplace providers under the updated rules.
This matters because transaction volume alone will no longer trigger Kentucky registration under the repealed test. However, a seller can still have an obligation if its Kentucky gross receipts reach the applicable threshold or if it has another form of nexus, such as inventory or other physical business activity.
Practical example for an international Amazon seller
Imagine a UK Limited Company selling through Amazon FBA:
- Kentucky sales are $120,000 during the current calendar year.
- The business has 140 Kentucky orders.
- Amazon collects tax on marketplace transactions where required.
The business is below the former 200-transaction test but above the $100,000 sales threshold. It should therefore reassess its Kentucky registration, filing and recordkeeping position.
Marketplace collection does not automatically remove every seller obligation. You should reconcile:
- Marketplace-facilitated sales.
- Direct Shopify or WooCommerce sales.
- Returns and refunds.
- Kentucky destination receipts.
- Tax collected by the platform.
- Any inventory stored or moved within the state.
The Kentucky Department of Revenue’s 2026 SSUTA recertification confirms the removal of the 200-transaction registration standard and the related August changes.
Check whether Form 720 applies to your business
Form 720 is the Quarterly Federal Excise Tax Return. It is not a routine form for every international ecommerce seller.
You generally need to consider Form 720 if your business is liable for, or responsible for collecting, one of the federal excise taxes listed in Parts I or II of the form.
The current Form 720, revised June 2026, includes several important updates.
New 1% remittance-transfer excise tax
The 2026 instructions explain that the One Big Beautiful Bill Act created section 4475. This imposes a 1% excise tax on certain remittance transfers occurring after 2025.
This is mainly relevant to businesses operating as remittance-transfer providers or handling qualifying money-transfer transactions. It is not a new tax on every payment made by a UK, Canadian, Australian or EU seller to a US supplier.
If the rule applies to your business, you may need to:
- Identify qualifying transfers.
- Calculate and collect the tax where required.
- Track transactions and supporting records.
- Make required electronic deposits.
- Report the liability on Form 720.
The IRS instructions also mention limited penalty relief for certain remittance-transfer tax deposits for the first three quarters of 2026. Review the latest IRS guidance before relying on relief.
Updated excise-tax amounts
The 2026 Form 720 instructions also include inflation-adjusted amounts for specific excise taxes, including:
- $0.65 per qualifying arrow shaft.
- $5.30 for each domestic segment of taxable air transportation.
- $23.40 per person for the use of international air travel facilities on flights beginning or ending in the USA.
These changes are sector-specific. They will generally matter more to manufacturers, importers, airlines, transport businesses and specialist operators than to ordinary Amazon or Shopify sellers.
Form 720 deadlines and deposits
Form 720 is filed quarterly:
- January–March: 30 April.
- April–June: 31 July.
- July–September: 31 October.
- October–December: 31 January.
Weekend and legal-holiday rules can affect the practical filing date.
Where required, excise-tax deposits are generally made electronically and may be due semi-monthly. The Form 720 return then reports and reconciles the liability. Keep the following records for at least four years, as required by the instructions:
- Taxable transactions.
- Calculation schedules.
- Deposits and payment confirmations.
- Claims and credits.
- Supporting invoices and import documentation.
Do not assume that a low quarterly liability removes every filing requirement. Check the current Form 720 instructions for the relevant tax type, deposit method and exception.
Protect your business from Form 5472 penalties
Form 5472 is separate from Form 720. It applies to a reporting corporation, including:
- A 25% foreign-owned US corporation.
- A foreign corporation engaged in a US trade or business.
- A foreign-owned US disregarded entity in relevant circumstances.
The form reports certain transactions with foreign or domestic related parties. Common examples can include owner funding, distributions, loans, service payments, rent and other reportable transactions.
