If you want to operate a good and money-making business, you need to prepare for that. This includes getting vital documents to create the business, finding a proper location for the office (if you need one), creating a good and content-full website, marketing it and so forth. But what is even more important, you need to understand how the taxation system works to operate your business with a flying start!
To start a business and operate it with success, you will surely encounter different types of taxes, and will obviously have to pay for them! These taxes include corporate, individual income, sales, property, unemployment taxes and so forth. However, today we will talk about sales tax and how it affects the taxation system of U.S. states.
Since sales tax is as complicated as quantum physics, we will mainly focus on this type of tax. If you don’t know what sales tax really is, we will probably start from the basics.
What is Sales Tax?
Sales tax is a consumption tax that is usually charged based on purchases of products and services. In other words, you shouldn’t be surprised when you purchase a product for $100 and somehow pay for it $93: this is sales tax, what can we say?
Which Products Are Taxed?
How do we say it? Well, almost every tangible product is taxable! In this eCommerce reality, the majority of products that you can see, touch and smell are taxed. Sales taxes are especially important to those who want to operate an eCommerce business and who source or create products that they are willing to sell online.
10 States Where Sales Tax Is as High as One World Trade Center
Let’s start from California. This state has the highest sales tax rate at 7.25 percent, which is why people who operate a business in this very state suffer quite a lot! But wait, no pain no gain, right? California’s sales tax rate includes the base rate of 6% and the mandatory local rate of 1.25%. The amount that is paid for sales tax goes straight to city and county tax officials.
You will always find Indiana coming after California when it comes to sales tax rate! This state imposes sales tax at a rate of 7.00%, however, there’s something that is different here compared to California. And no, we’re not talking about the difference between the rates! This state imposes a single tax rate, which is why you won’t find extensive maintenance here!
This state comes after Indiana, which is however not quite fair! Why? You’ll get it soon! First of all, it is important to say that this state imposes sales tax rate at 7.00%, but this is not that easy! In this very state, everything depends on the local municipalities! In some cases, if they decide to, the total tax rate will be as high as 8.00%! What can we say, the Magnolia state is full of surprises!
Well, it’s not even surprising that sales tax rate is so high here! If you want to live near the ocean, in a place with access to Atlantic, you will have to pay a fortune! It’s like living in a luxurious villa, drinking champagne for breakfast and enjoying your life all at the same time…more expensive though!
Here. At Rhode Island, the sales tax rate is 7%. It has a single, statewide sales tax, which is quite good if you actually forget about the other issues! This means that if you buy a computer at $200, you will pay $186 more!
Ironically, this state is also called the Volunteer State! While working without being paid, people here are even paying taxes! This state is imposing sales tax rates at 7%, and this is not even the worst part! What’s more, in some cases you will have to pay more! Why? Because the total sales tax rate can be as high as 10% depending on the local jurisdictions! Yeah, if paying taxes was voluntary, no one would pay, isn’t it strange?
The Toothpick state unfortunately won’t help you get rid of sales tax! Here, in Arkansas, you will encounter sales tax at a rate of 6.5%. However, localities are always adding percent, it’s not a secret! Sometimes, localities add up to 5.125% as a result of which you will have to pay sales tax at 9.51%!
If you decide to open up your business in Kansas, you will have to face high sales tax rates! More specifically, the sales tax rate here is 6.5%, which can grow up to 8.69%! Same issue, localities won’t let you breathe neither in Arkansas nor in Kansas!
Did you know that the North American prairie belongs to one of the most endangered ecosystems on our planet? Well, the Prairie state definitely needs money to preserve it! In other words, the sales tax rate here is 6.25%, which is capable of growing up to 8.82%! Saving our planet requires money, accept it!
If you decide to open up a business here, in Oklahoma, you will have to pay sales tax at a relatively lower rate! Here, the rate is 4.5%, which can however change based on the decisions of localities. The average combined rate here is 8.95%.
New York, New York… this state also has relatively low sales tax rate, which can again grow if localities decide to add some percentage! In the city of dreams and opportunities, you will pay sales tax at a rate of 4%, together with those 4.875% that can be added by localities.
There are no perfect states here, in the United States, especially if you want to open up a business. However, there are some techniques that can always help you to make your business as perfect as it is possible, and one of them is called tax exemption. If you want to get exempt from paying taxes, just contact us and we will do that for you! Besides, we take care of processes like Amazon tax exemption, Walmart sales tax exemption and other tax-related issues. You just have to contact us!