US Sales & Use tax
Selling in the US presents a unique challenge due to its intricate system of state and local sales tax rates, each governed by distinct regulations. This complexity can make accurately determining the applicable tax rate a daunting task.
Αdding to this complexity is the concept of “nexus,” which serves as the legal basis for tax collection within a state. Nexus criteria, such as inventory storage or sales thresholds, vary from state to state.
Our team of experts can help you determine sales tax nexus, register in the appropriate states, automate sales tax filings and ensure ongoing support for your business.
The Complexity of US Sales Tax
Unlike a VAT system which typically has a uniform rate, US sales tax varies by state and even by locality. This patchwork of regulations can be overwhelming, leading to miscalculations and missed filing deadlines.
There are over 10,000 different jurisdictions in the US where businesses may be required to collect and remit sales tax. On top of this, each of these jurisdictions can have its own sales tax rate, taxability rules, filing frequency, and filing deadlines.
The rise of e-commerce in recent years has added another layer of complexity, as international businesses may be required to collect sales tax in states where they have no physical presence, depending on various factors such as economic nexus laws.
Our team of experts is equipped to guide you through that maze of sales tax jurisdictions and ensure sales tax compliance is done accurately and on time.
Penalties and Audits
Operating without proper registration or incorrectly handling sales tax exposes you to hefty fines and potential audits. These can be time-consuming, expensive, and disrupt your business operations.
Penalties for non-compliance vary depending on the jurisdiction and the severity of the violation.
At the same time, audits can extend over weeks or even months, entailing significant legal fees and potential back taxes, adding financial strain.
Often businesses must allocate additional time and resources to accommodate the audit, incurring extra costs and diverting attention from core operations.
Our team of experts is here to fortify your compliance strategy and make sure that your business is free from penalties and audits.
Establishing Sales Tax Nexus
Creating a “sales tax nexus” in the US triggers registration requirements. Activities like storing inventory in a US warehouse, having salespeople travel through the country, or even participating in online marketplaces can surprisingly establish nexus.
These activities create a connection or presence (“nexus”) in a particular state, prompting the need for tax compliance in that jurisdiction.
Furthermore, the surge in e-commerce activity within the US has prompted states to reassess their nexus criteria. As a result, businesses need to stay vigilant and regularly monitor developments in nexus rules and regulations to ensure ongoing compliance with sales tax requirements.
Our sales tax experts stay current with the latest updates in nexus standards, ensuring ongoing compliance for your international business operations in the US.
Our Services
Sales tax advisory and nexus determination: We guide you through US sales tax regulations and identify if your activities create a filing obligation.
State-by-state sales tax registration: Our experts ensure you’re registered in the appropriate states to avoid penalties.
Sales tax calculation, return filing and remittance: We automate calculations, prepare accurate filings, and remit taxes on your behalf, saving you time and resources.
Ongoing support: Receive continuous assistance to fortify your compliance strategy and navigate potential audits with ease.
Benefits of our service
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| Avoid penalties and fines | Ensure accurate tax compliance | Save time and resources |
| Our expertise safeguards you from hefty non-compliance costs associated with US sales tax. | Our services guarantee peace of mind with proper determination, meticulous calculations and on-time filings. | We handle the complexities, freeing you to focus on core business activities and growth strategies. |
Questions on your sales tax compliance?
| STATE | EFFECTIVE DATE | ANNUAL ECONOMIC THRESHOLD | ANNUAL TRANSACTION THRESHOLD |
| Alabama | 01 October 2018 | $ 250,000 | N/A |
| Alaska | 01 January 2020 | $ 100,000 | 200 |
| Arizona | 30 September 2019 | $ 100,000 | N/A |
| Arkansas | 01 July 2019 | $ 100,000 | 200 |
| California | 01 April 2019 | $ 500,000 | N/A |
| Colorado | 01 June 2019 | $ 100,000 | N/A |
| Connecticut | 01 December 2018 | $ 100,000 | 200 |
| Florida | 01 July 2021 | $ 100,000 | N/A |
| Georgia | 01 January 2019 | $ 100,000 | 200 |
| Hawaii | 01 July 2018 | $ 100,000 | 200 |
| Idaho | 01 June 2019 | $ 100,000 | N/A |
| Illinois | 01 October 2018 | $ 100,000 | 200 |
| Indiana | 01 October 2018 | $ 100,000 | 200 |
| Iowa | 01 January 2019 | $ 100,000 | N/A |
| Kansas | 01 October 2018 | $ 100,000 | N/A |
| Kentucky | 01 July 2018 | $ 100,000 | 200 |
| Louisiana | 01 January 2019 | $ 100,000 | 200 |
| Maine | 01 July 2018 | $ 100,000 | N/A |
| Maryland | 01 October 2018 | $ 100,000 | 200 |
| Massachusetts | 01 October 2017 | $ 100,000 | N/A |
| Michigan | 01 October 2018 | $ 100,000 | 200 |
| Minnesota | 01 October 2018 | $ 100,000 | 200 |
| Mississippi | 01 September 2018 | $ 250,000 | N/A |
| Missouri | 01 January 2023 | $ 100,000 | N/A |
| Montana | – | – | – |
| Nebraska | 01 January 2019 | $ 100,000 | 200 |
| Nevada | 01 October 2018 | $ 100,000 | 200 |
| New Hampshire | – | – | – |
| New Jersey | 01 November 2018 | $ 100,000 | 200 |
| New Mexico | 01 July 2019 | $ 100,000 | N/A |
| New York | 21 June 2018 | $ 500,000 | 100 |
| North Carolina | 01 November 2018 | $ 100,000 | 200 |
| North Dakota | 01 January 2019 | $ 100,000 | N/A |
| Ohio | 01 August 2019 | $ 100,000 | 200 |
| Oklahoma | 01 July 2018 | $ 100,000 | N/A |
| Oregon | – | – | – |
| Pennsylvania | 01 July 2018 | $ 100,000 | N/A |
| Rhode Island | 07 July 2019 | $ 100,000 | 200 |
| South Carolina | 01 November 2018 | $ 100,000 | N/A |
| South Dakota | 21 June 2017 | $ 100,000 | N/A |
| Tennessee | 01 October 2019 | $ 100,000 | N/A |
| Texas | 01 October 2019 | $ 500,000 | N/A |
| Utah | 01 January 2019 | $ 100,000 | 200 |
| Vermont | 01 July 2018 | $ 100,000 | 200 |
| Virginia | 01 July 2019 | $ 100,000 | 200 |
| Washington | 01 October 2018 | $ 100,000 | N/A |
| Washington DC | 01 January 2019 | $ 100,000 | 200 |
| West Virginia | 01 January 2019 | $ 100,000 | 200 |
| Wisconsin | 01 October 2018 | $ 100,000 | N/A |
| Wyoming | 01 February 2019 | $ 100,000 | 100 |
* Last updated – July 2023 (Source credit: taxconnex)
The above information is only indicative. This table is updated regularly but please contact GVC in order to ensure that it is correct at the date you are using it.