US Sales Tax Overview

What is Sales Tax?

Businesses in Europe are used to dealing with taxes in the form of VAT, but US sales tax is a different prospect entirely.
There are over 12,000 taxing jurisdictions throughout the US. Add to this 100,000+ rules, rates and boundary changes annually and it’s easy to see why many companies require outside expertise to manage what initially seems like a straightforward process.

VAT vs Sales Tax

Sales tax is collected only at the time of the final sale, whereas VAT is applied every time value is added at each stage during the supply chain.
Depending on the state in which your customer is based, different items may be taxed at different rates.

If you have ‘nexus’ in an American state, you must collect sales tax on all taxable sales.

What is Nexus?

Nexus is a connection or business presence in a state or jurisdiction.
International businesses selling in the US are not required to collect sales tax in a state unless they have ‘nexus.’ If you do, then you need to collect and remit sales tax according to their regulations.

Visit our whitepaper page to learn more about nexus and how to stay compliant when selling into the US. Learn more >

How we help your business

We offer a full suite of professional services including nexus studies that help to identify your obligations and registration services to ensure compliance when you expand in the US. Our cloud-based Avalara AvaTax™ technology integrates with hundreds of ERP, PoS and eCommerce platforms to bring tax automation into your expanding business, both in terms of calculating accurate taxes as well as returns filing and remittance.

Latest American news

US, Mexico & Canada e-commerce sales tax & duty thresholds

October 12, 2018

As part of the NAFTA renegotiation completed on 1 Oct 2018, the US has secured a rise in the duty-free threshold for e-commerce sales...

US Congress bill to curb out-of-state Sales Tax Jan 2019

September 19, 2018

US legislators in Congress are to consider two bills providing for a consistent imposition of the ‘economic nexus’ Sales Tax test, including a $10million...

US Wayfair e-commerce ruling hits non-US retailers

September 17, 2018

On 21 June 2018, the US Supreme Court introduced a new ‘economic nexus’ test to determine if out-of-state online retailers are responsible for charging...