UNX News Magazine
  • Home
  • Business
  • Education
  • Finance
  • Health
  • Home
  • Real Estate
  • Shopping
  • Sports
  • Tech
  • More
    • Auto
    • Law
    • Travel
No Result
View All Result
  • Home
  • Business
  • Education
  • Finance
  • Health
  • Home
  • Real Estate
  • Shopping
  • Sports
  • Tech
  • More
    • Auto
    • Law
    • Travel
UNX News Magazine
No Result
View All Result

How does sales tax work in the U.S.?

Hailey Cady by Hailey Cady
6 months ago
in Finance
0
How does sales tax work in the U.S.?
0
SHARES
22
VIEWS
Share on FacebookShare on Twitter

In pretty much every country across the globe, you will find some sort of taxes on things like products and services. A lot of countries opt for VAT – value added tax, which is collected by all sellers in each stage of the supply chain – every person pays VAT. In the U.S., however, things are done differently – sales tax is used instead.

SALES TAX CALCULATOR

What exactly is sales tax?

Sales tax is a type of consumption tax similar to VAT, that’s imposed by the government on the sales of goods and services. There is a conventional sales tax which is levied at the point of sale, collected by the retailer and passed on to the government. Sometimes businesses also have to pay sales taxes if they have a nexus in a given jurisdiction, depending on the laws there.

Sales tax basics

Retail sales taxes are generally charged only to the end user of a service or product. 

Businesses can be taxed if they aren’t careful about the way they handle taxes – especially when it’s a good: the majority of goods go through lots of manufacturing stages before they get to the end product, often by many different entities. If this applies to your business, you’ll need to get a lot of documentation to provide who ultimately is responsible for the sales tax in the end. 

For instance, imagine a potato farmer. This potato farmer would sell to a chip-making company. To avoid paying sales tax on their purchase, the chip-making company needs to obtain a resale certificate, to confirm it is not the end user of the product. The chip-maker could then sell to a supermarket that needs to charge the sales tax to customers, in addition to the price of the chips.

Sales taxes are closely related to use taxes that apply to residents who’ve purchased items from outside their jurisdiction. These taxes are generally set at the same rate as sales taxes but can be more difficult to enforce, and so generally tend to be in practice only for large purchases of goods or a service.

What is a nexus for a business?

A nexus is defined as a physical presence of something. The exact definition of a ‘presence’ isn’t just limited to an actual building, though. It can also mean a business just having an employee or an affiliate in the state. In some states it now also includes having online presence, as ecommerce is starting to become a big thing now. For instance, in New York ‘Amazon laws’ have been passed which require internet retailers like Amazon.com Inc. to pay sales tax, despite not actually being physically in the state.

Registering for sales tax

When you register for sales taxes, you need to firstly get a Seller’s Permit, and find ways to save money on taxes too by getting documents like a Resale Certificate.

Getting a seller’s permit

Any business that sells a good or a service needs a seller’s permit. These permits are given by states. If you can’t find it, it may also be labelled as a ‘Sales Tax Permit’ or ‘Sales Tax Certificate of Authority’. Even if you don’t need to pay taxes you’re still required to get one, so that the state knows where exactly sales tax revenue is coming from.

To register, go to the Department of Revenue for your state, fill in the details and you’re all good to go. In most states this service is fortunately free.

Getting a resale certificate

Going back to what we said before, a resale certificate/permit is great for when purchasing goods with the intention of reselling them. They are simple to get and stop you from having a good get taxed multiple times before reaching the end consumer. The certificate can also be found on your state’s Department of Revenue homepage, and also tends to be free.

To help calculate your sales tax, TRUiC has a useful tool – a sales tax calculator. Visit their site for more.

Previous Post

Quality Sports Games Produced By EA Sports

Next Post

8 Incredible Tips for Using Law of Attraction

Related Posts

Gain Exposure to Gold Using These Methods

Gain Exposure to Gold Using These Methods

January 11, 2021
5 Key Advantages of B2B Payment Processing

5 Key Advantages of B2B Payment Processing

January 5, 2021
Types of Portfolios that You Should Try

Types of Portfolios that You Should Try

January 4, 2021
How Stock Market Career Works

How Stock Market Career Works

December 31, 2020
Things to Consider While Investing in ULIPs

Things to Consider While Investing in ULIPs

December 23, 2020

How to consider Poor Credit Financing

January 18, 2021
Next Post
8 Incredible Tips for Using Law of Attraction

8 Incredible Tips for Using Law of Attraction

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Top Stories

Why Do Dentists Need a Well-Rounded Digital Presence?

Why Do Dentists Need a Well-Rounded Digital Presence?

January 20, 2021
A/B Testing: A Beginners Guide

A/B Testing: A Beginners Guide

January 14, 2021
Gain Exposure to Gold Using These Methods

Gain Exposure to Gold Using These Methods

January 11, 2021
Health

Why Do Dentists Need a Well-Rounded Digital Presence?

The COVID-19 crisis has brought with it quite a few sweeping changes in just about every aspect of everyday life. ...

January 20, 2021
Tech

A/B Testing: A Beginners Guide

Remember high school lab experiments? Where experiments would likely comprise of a 'control' and a 'test' group. The test group ...

January 14, 2021
Finance

Gain Exposure to Gold Using These Methods

Gold has remained valuable today with many investors seeking gold exposure, as the precious metal serves as a store of ...

January 11, 2021
Business

Applying For Singapore PR With Understanding

Have you lately chose to start applying for Singapore PR? Do you want to know the tips and tricks on ...

January 8, 2021
Business

Woodworkers’ Favorite Types of Wood

If you’re a passionate woodworker or just beginning woodworking, you might be wondering which woods are the best and most ...

January 6, 2021

Recent Posts

  • Why Do Dentists Need a Well-Rounded Digital Presence? January 20, 2021
  • A/B Testing: A Beginners Guide January 14, 2021
  • Gain Exposure to Gold Using These Methods January 11, 2021
  • Applying For Singapore PR With Understanding January 8, 2021
  • Woodworkers’ Favorite Types of Wood January 6, 2021

Archives

  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • May 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019

© 2020 UNX News Magazine - All Rights Reserved.

  • Get support

No Result
View All Result
  • Get support
  • Home Layout 1

© 2020 UNX News Magazine - All Rights Reserved.