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According to UHY partner Christopher Byrne, the Internal Revenue Code provides that, in general, income from the sale of personal property is sourced based on the residence of the seller. Therefore a sale of personal property by a US resident is sourced in the United States, while such property sold by a non-resident of the United States is treated, for US tax purposes as sold outside the US. However, in the case of income derived from the sale of inventory property, the general rule does not apply. Income arising from the sale of inventory is sourced without regard to the residence of the seller. The sale of inventory is sourced to its place of sale.

For purposes of the sourcing rules, inventory includes stock in trade of the taxpayer of a kind which would properly be included in inventory of the taxpayer if on hand at the close of the taxable year, or property held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business. 

Income from the sale of inventory property is sourced by its place of sale. The place of sale is the place at which title passes. Generally this would be the place where delivery to the purchaser is made. 

It should be noted that there are other exceptions to the general sourcing rules which apply to sales of depreciable property and certain intangibles. In addition, income from sales through offices or fixed places of business of a US resident in a foreign country, or by a nonresident with an office in the US, is generally sourced to the location of the office, if the sale is attributable to such office.