Sales Tax in the USA

As the USA is a federal country, taxes are levied both at federal level and by each individual state. The US tax system works quite differently from the British one, so to meet your obligations under US law you need to understand its key features – in particular, how taxes are collected and paid. If you run a business or work in the USA, you should know which taxes apply to you, when they fall due and when you can claim a refund. With our own branch in the USA and extensive experience of the US tax system, we can offer tax advice backed by in-depth expertise and professional qualifications.

The VAT system familiar from the UK does not exist in the USA. Its counterpart there is sales tax, which is charged whenever goods or services are sold; where the consumer pays the tax directly, it is known as use tax. Sales tax applies only to sales within a state’s borders and is not charged on sales to customers in other states. The amount due depends on the customer’s location – their home address or business seat – rather than on where the company is headquartered. A few states, including Delaware, levy no sales tax at all, and some hold tax holidays: short periods during which selected goods can be bought tax-free. Each state sets its own rules on which goods and services are taxable and at what rate, as well as its own exemptions for otherwise taxable items.

Taxation in the USA is considerably more complex, and the average taxpayer may find it difficult to understand and to keep up with everything current law requires. Our team of experts is ready to support you and take care of every task involved, so that all your tax obligations are met correctly and on time.

Prices and Fees

Sales tax registration generally costs $175 per state, plus the state’s own registration fees. Registering with a state may involve more than one step – for instance, registering with both the Secretary of State’s office and the department that administers sales tax, and appointing a registered agent if the company has no physical address in that state. Once registered, the company must prepare and file monthly returns.

Once the sales tax registration has been submitted, the state will ask you to nominate the person responsible for remitting sales tax. That person must provide a US Social Security Number (SSN) or a US Individual Taxpayer Identification Number (ITIN).

Sales Tax in New York

• – registration costs $175 plus a $225 state fee, making $400 in total.
• – filing sales tax returns costs from $50 per month per state

Sales Tax Rates

Sales tax – the US counterpart of VAT or a turnover tax – varies from state to state. Rates are generally between 5% and 10%, although a handful of states charge none at all. What matters is where the customer lives or is based, not where the company is registered. So if your customer is in Florida, you must collect Florida sales tax from them, even if your company was formed in Delaware and runs its offices from California.