Not VAT, and far messier
Sales & Use Tax in the United States
The United States has no VAT. It has sales tax in thousands of separate state and local jurisdictions.
GCC business setup specialists
Selling remotely can create an obligation
Since the economic nexus rules took hold, a business with no physical presence in a state can still be required to register and collect there once its sales into that state cross a threshold. Thresholds, taxable categories and filing frequencies differ by state, and local jurisdictions layer their own rates on top. For an online seller, the obligation can appear in a dozen states without anyone visiting one.
- Nexus tested state by state against actual sales data
- Marketplace facilitator rules applied so you do not over-register
- Registrations and filings handled where they are genuinely required
20+
Mainland, free zone and offshore jurisdictions we file in — so the recommendation is based on your activity, not on which authority we happen to be registered with.
7,000+
Companies successfully established.
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How it differs from VAT
The US indirect tax model
Nothing here works like VAT.
| Feature | Position |
|---|---|
| National tax | None. There is no federal sales tax or VAT. |
| Who levies it | States, counties, cities and special districts. |
| Input recovery | No credit mechanism as in VAT. |
| Physical presence | Creates nexus. |
| Economic nexus | Sales thresholds create nexus without presence. |
| Marketplaces | Often collect on your behalf. |
Nexus thresholds, taxable categories, rates and marketplace facilitator rules differ by state and change frequently. Yours are assessed against current rules and your actual sales data.
How it works
Getting sales tax right
Measure first, register second.
01
Measure nexus
Your actual sales by state tested against each state’s thresholds, together with any physical presence or inventory.
02
Register where required
Registrations completed only where an obligation genuinely exists, taking marketplace collection into account.
03
Collect and file
Rates applied correctly at the local level, exemption certificates collected and returns filed on each state’s cycle.
- Sales by state for the last twelve months
- Transaction counts by state
- What you sell, in detail
- Whether your products are taxable in each state
- Whether you sell through marketplaces
- Which marketplaces, and their collection status
- Where inventory is stored
- Whether you use third-party fulfilment
- Whether you have employees or contractors in any state
- Whether you attend trade shows in other states
- Existing registrations held
- Any notices received from state authorities
Scope
What is included, and what is not
Stated plainly, so nothing is added once the engagement starts.
Included in the service fee
- Nexus assessment by state
- Taxability review for your products
- Marketplace collection position assessed
- Registrations where genuinely required
- Rate and local jurisdiction set up
- Exemption certificate guidance
- Return preparation and filing
- Correspondence with state authorities
Not included, quoted separately
- Sales tax itself, paid at cost
- Penalties for periods before engagement
- Voluntary disclosure agreements, quoted separately
- Sales tax software licences
- US tax advice
- Audit defence beyond routine correspondence
- Customs duties
- Income tax filings
Verify independently
Relevant US authorities
We file directly with these bodies on your behalf.
Secretary of State of the state of formationInternal Revenue ServiceState departments of revenueCounty and city licensing officesRegistered agent in each stateState professional licensing boards
Questions
US sales tax — FAQs
Is sales tax the same as VAT?
No. There is no input credit mechanism, it is levied by states and localities rather than nationally, and the rules differ in every state.
Can I owe sales tax in a state I have never visited?
Yes. Economic nexus means crossing a sales or transaction threshold in a state can create an obligation without any physical presence.
Do marketplaces handle it for me?
For sales through them, often yes under marketplace facilitator rules. Your own direct sales are a separate matter, and over-registering because you ignored this is a common and costly error.
How many registrations might I need?
It depends entirely on your sales distribution. We measure before registering, because unnecessary registrations create permanent filing obligations.
What if I should have registered earlier?
Voluntary disclosure programmes exist in many states and can limit look-back and penalties. We flag it rather than registering and inviting a back assessment.
Go deeper
More United States services
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