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 Wyoming marketplace sales tax collections

February 18, 2019

Wyoming is to require marketplaces to collect out-of-state Sellers’ sales tax from 1 July 2019. This is based on the 2019 South Dakota v Wayfair Supreme Court ruling, imposing ‘economic nexus’ sales tax liabilities on sellers not located in a state for the first time.

US New York implements Wayfair Sales Tax rule

January 16, 2019

The New York state tax department published on 15 January 2019 guidance on the immediate requirements for out-of-state sellers to register and charge Sales Tax.

US Texas Sales Tax economic nexus

January 3, 2019

Texas has become the latest US state to implement Sales Tax obligations on out-of-state (non-resident) merchants. This follows the 2018 South Dakota vs Wayfair Supreme Court ruling obliging remote sellers without a presence in a state to charge and remit local Sales Tax.