In the first issue of the Cross-Border Magazine, Avalara’s taxexperts Richard Asquith (VP of Global Tax) and Paul Guyer (Sales Director EMEA) shed some light on how to tackle the sales-tax conundrum in the United States. Here, we have compiled a top 10 of need-to-know facts about sales tax in the US:
1) There are 12,000 taxing jurisdictions throughout the US, each empowered to alter rates and rules with little oversight, the complexity for companies trading in the US becomes mind-boggling. This leads to up to 100,000+ rules and boundary changes annually.
2) Forty-five states and the District of Columbia impose a sales tax on retail sales and some services. The five states that do not have a state-wide general sales tax are Alaska, Delaware, Montana, New Hampshire and Oregon, although Alaska and Montana do allow localities to charge local sales taxes.
3) Sales tax is not the same as VAT: VAT is applied every time value is added at each stage during the supply chain, whereas sales tax is collected only at the time of the final sale.
4) In Pennsylvania, state and US flags are not subject to tax, but if either is sold with “accessories” (i.e. a pole), the entire purchase becomes taxable.
5) In New York, shower caps are taxable, swimming caps are not
If you need more expert knowledge and hands-on advice, please download Avalara’s Whitepaper!