Sales tax in the United States is a tax levied by the state and local governments of the United States on goods and services based on a certain percentage of their sales price. It is a tax paid by consumers when consumption occurs in the United States. Merchants are responsible for helping the local government collect on their behalf, and then pay the local government once every quarter (once a year when the turnover is small).

Whether it is a Chinese company or an American company, it must first register with the state government to obtain an EIN tax number. EIN is very important and is used when reporting Federal Income Tax (Federal Income Tax), State Income Tax (State Business Tax), Payroll tax (salary tax) and applying for Seller Permit (sales license) and other related taxes.

U.S. companies with tax IDs can set up to automatically collect sales tax from consumers in Amazon’s backend. Amazon said Tax Collection is a new service that will automatically calculate, collect and deduct sales tax for third-party merchants who sell to customers in certain states.

If you let Amazon pay the tax, Amazon will charge 2.9% of the tax as a handling fee, because paying the sales tax is the responsibility of the seller, not Amazon.

Many sellers think that Amazon has already withheld and paid the sales tax, so they don’t need to worry about it. In fact, when the seller’s sales reach a certain limit, they must declare their own sales tax, and in certain cases, they also need to declare income tax. .

Under U.S. tax law, sellers need to apply for a sales tax license and file a sales tax return in the state where the sales tax linkage occurred. At present, 46 states in the United States have set up sales tax, and sales tax has become the main source of fiscal revenue for the state government, accounting for more than 40% of the state government's tax revenue. It should be noted that the proportion of sales tax collected in each state varies. the difference.

Below are the states in the US that do not have a sales tax and related other policies.

1. Delaware

Delaware also does not charge any state sales tax to its residents or visitors. Additionally, no jurisdiction in Delaware implements any sales tax measures. However, Delaware imposes a certain Gross Sellers Tax on the gross sales of goods and services sold by businesses.

While Delaware has no sales tax, low property taxes, and is known as a corporate tax haven, the state offsets this by charging a modest personal income tax.

The state of Alaska

Alaska is one of the most tax-friendly states in the U.S. The state has no sales tax and no state personal income tax. Alaska charges a little higher than the average rate of 1.18% in property taxes, but the state has multiple ways to apply for property tax exemptions.

Throughout Alaska, many counties within the state, known as "Boroughs", do collect sales tax. For example, Juneau Borough has a 5% sales tax on eligible purchases and collected more than $47 million in sales tax in 2020.

3. Montana

This is a sparsely populated state and Montana has no state sales tax. But municipalities belonging to tourist destinations (like Big Sky) have the right to levy local sales tax.

Montana has higher property taxes, with income taxes approaching the average rate for all 50 states.

4. New Hampshire

New Hampshire has also opted not to collect sales tax, but the state has one of the highest property tax rates in the nation.

The state's personal income tax is also very limited, as the tax only applies to interest (such as from high-yield savings accounts) and dividend income (such as dividends from stock purchases).