There’s nothing better than knowing what you should pay for and why. This is especially satisfying when you’re dealing with taxes, know how much you should pay, when you should do that and what’s the reason behind that.
As you may know, you can’t avoid taxes: they are always here, waiting for you to pay! That’s why working with taxes is a complicated and delicate thing to do, especially when you want to operate a business! Believe us, our specialists have seen so many people that encountered problems because of the wrong impression about the taxation system! To resolve this issue, we decided to write not only about the worst states for business taxes, but also about the best ones!
As we said in our previous article, one of the most complicated taxes is sales tax! Why? Because it’s not only full twists and turns, but it also makes the price of a product or service higher! This is why many business owners hate this tax as little kids hate staying quiet!
So, let’s concentrate mainly on sales tax today! However, you should know that there are many other taxes that you should and will know about! These taxes are: corporate, sales, property, individual income, unemployment taxes and so forth…
Sales Tax Who?
You have surely felt that disappointment in a store when you think you’re buying a product for, let’s say, $100, but pay for it higher than you expected. This is the main concept of sales tax! This tax is basically a consumption tax which is charged based on your purchases. It can be either a purchase of a product, or a purchase of a service: doesn’t really matter!
So, if you’re thinking to opening up a business and haven’t chosen a state for that, we will help you!
Let’s start from a state with a sales tax rate of 2.9%. In this state located in the western half of the U.S. you can not only feel yourself almost sales-tax-free, but also happy and active! What’s more, you can be in four states at the same time! In the southwest of Colorado, you can be in Arizona, New Mexico and Utah at the same time, and what’s really interesting, you don’t have to pay much for that! Did you already guess the name of the state? Colorado, that’s right!
The next states that have a relatively low sales tax rate are Alabama, Wyoming, Hawaii and New York. These four states have a sales tax rate of 4%! Here, in these states, you won’t feel the stress that is caused by states imposing 7% sales tax! So, if you want to open up your own business in a state with relatively low sales tax rate, where you can also operate a profitable business, you definitely need to choose from one of these!
Missouri is the next one in our list. Actually, there are many long and short stories and legends behind Missouri’s name, however, we have our own version! This state is also called as the “Show-Me” state, and that makes us wonder, what should it show? Maybe the rational ending would be show me your low sales tax rate? Show me how great it would be to have a business here? Show me what you can give? We’ll never now, but the sales tax rate speaks for itself! Here, the rate is 4.225%.
The sooner state is offering sales tax rate at 4.5%. Even though it may seem a little bit high to operate a business, you have to compare with other available options! Some states’ sales tax rate reaches 7%, and that’s even without additional percentage added by localities!
Here, in North Carolina, you will face sales taxes at a rate of 4.75%! Again, this is not the best option, but it’s still relatively low! In any case, you still have to have a consultation with tax professionals!
Of course, there are many other states that have relatively low sales tax rates. For example, Louisiana with its 4.45%, South Dakota with its 4.50%, and… Are you ready? Oregon, Delaware, Montana and Alaska with their 0.00% of sales tax!
Before going on a break, we would like to tell you one thing. Always contact professionals before starting a business. Even states with 0.00% sales tax rate can somehow make you pay money for sales tax! This is why you need to know how the taxation system works in each state, and only then make your decision!
If you need advice regarding tax exemption, becoming an Amazon tax exempt or Walmart tax exempt seller, opening up a business, and other tax- or business-related questions such as “how DBA in Texas works?” , or “do I need an LLC to sell online?” just contact us!