What are the main types of business taxes in the U.S.?
The main two types of taxes a foreign U.S. business owner should be concerned about are income tax and sales tax. Those are two completely different, unrelated taxes.
Are there any other taxes I should be concerned about?
Some types of products have additional tax (and licensing) requirements, for example liquor and tobacco products, as well as other products. If you are not sure if your product or service has licensing or taxation requirements contact us and we will assist you with the research.
How does U.S. income tax work?
This is a simple question, however it’s U.S. income tax we are talking about. Technically, each taxpayer must pay tax on the income created in the U.S., and in some cases (such as the case of U.S. citizens or permanent residents) on income created abroad. The income tax is paid to the federal government (IRS), and in many cases to the state of residence, and in some cases even to the local jurisdiction (e.g. New York City).
However, we created this article precisely for the reason we cannot just simply answer this otherwise great question - the real answer is “it depends, because it’s complicated”. Keep reading the next pages to see if U.S. income tax applies to you, and how.
OK - now that we know the difference between sales tax and income tax let’s handle the sales tax portion of U.S. taxation, before diving into the depths of income taxation.