The information on this page was current at the time it was published. Regulations, trends, statistics, and other information are constantly changing. While we strive to update our Knowledge Base, we strongly suggest you use these pages as a general guide and be sure to verify any regulations, statistics, guidelines, or other information that are important to your efforts.

Taxation Triggers In The US

Foreign companies doing business in the United States are often surprised by what activities have both federal and state-level tax implications. Both the US federal government and each state government have expansive taxing powers. Because income tax is far too complicated and company specific, this tax information will only pertain to the other indirect taxes you might be responsible for when doing business in the US. Furthermore, it is important that you know that tax law in the United States is continually changing, often yearly.

Because the tax system in the United States is one of the most complex systems in the world, and includes vastly different federal, state, and local laws, you should speak with a tax attorney and/or accountant to learn about and understand your tax obligations in all state in which you do business.

Sales Tax

The most apparent way you could incur tax obligations is through sales tax. Sales tax obligations are relatively straightforward when you have a physical presence in a particular state, however, they are more complicated when you have an online business. Your sales tax obligations vary greatly among states, so you should know and understand your obligations in each state in which you do business, even if you don’t have a physical presence in that state. To learn more about your sales tax obligations, review the sales tax section of the Knowledge Base.

Other Indirect Tax Obligations

Besides income and sales taxes, you may be responsible for other indirect taxes, including, but not limited to, franchise taxes, real estate transfer taxes, telecommunications taxes, commercial rent taxes, and hotel occupancy taxes.

If you are a US exporter, you may be able to reduce your tax liability through the use of the Interest-Charge Domestic International Sales Corporation (IC-DISC) export tax incentive. To qualify for the IC-DISC benefit:

1. Export property must be manufactured in the U.S.

2. Export property must be sold for direct use outside the U.S.

3. Less than 50 percent of the export property’s sales price is attributable to imported materials.

For more information, speak with your international tax and accounting firm or find one on the Globig Marketplace.

IRS: Tax Information For Businesses

IRS: Small Businesses & Self-Employed Tax Center

IRS: Tax Information For International Businesses

IRS: Tax Information For Corporations

IRS: Tax Information For Partnerships

IRS: International Taxpayers

IRS: Video Portal