Tax-Related

All goods imported into the United States are subject to custom entry and import duty. However, if you sell goods in the US, you need to pay state sales tax at the rate applicable to the state where the company is located.

The Federal Income Tax rate can vary depending on the income of corporations. The rate currently is 21%. This rate depends on the net profit and not on the revenue. It's the same rate for products and services.

The State sales tax rate or the VAT (value-added tax) depends on state to state. For instance in New Jersey, it's 6.625% but for New York, it's 8.875%. It completely depends on the state.
Let's say that you are an NJ-based company and earning income from clients from 6 different states. Now, you won't be paying state taxes in all the states but in the home state, which is NJ in this case, where your company is registered. Keep in mind that you will be taxed on the net profit.

21% federal tax rate is only for the IRS (the federal government). Each state will have a different tax rate. The state tax rate can vary from 5% to 9% depending on which state you're working with.

Yes! Sales tax registration is more like getting a unique ID from that state. Let’s say when you register your business in Delaware, you get the federal registration number, the state registration and other documents. But when you are making a sales tax payment in New Jersey, the state doesn’t know who you are, so you need an ID, specifically for New Jersey. It is a one-time process to get the State ID. It is not uncommon for the companies to have sales tax in multiple states but the registration part is very easy.

Not necessarily, but there could be additional taxes in this scenario. For example, if you make $100 in net profit then we'll try to divide how much of this amount was from NJ and how much was NC based. Now, let us say that NJ has no activity except that you have the business registered in NJ and all of $100 was made in NC then you'll pay the taxes in NC and also the minimum tax in NJ i.e. $500.

If you make $50 from NJ and $50 from NC, then you'll pay the computed tax in both states. Now, if the computed tax is less than the minimum tax value (of the State), then also you'll pay the minimum tax value. So there is not necessarily double taxation between the states but some additional taxes depending on how much profit you made from each State.

We have to look at it separately state by state. Some state has a sales tax, VAT tax based on the destination means where the customer is located, and some states have a tax based on the source means from where you’re supplying from. Some states do not charge tax if the shipment is out of state and they expect the source state to be charging and remitting directly.

Depending on what you’re trying to achieve, all companies must have an annual filing which is a sort of license renewal in that state that cost a couple of hundred dollars depending on which state you have and then annual income tax filing with the Federal govt. and the State govt. These are the two basic requirements that are applicable in all states.

Then comes the other compliance like payroll. In this case, if you have employees in your company then there are certain filings on a monthly, quarterly or annual basis related to payroll. If you have VAT, there are certain monthly, quarterly or annual filings.

VAT is calculated at each stage of the sale of goods and is distinct from sales tax in that VAT is collected from both the producer and the consumer, whereas sales tax is paid only by the consumer.

Resellers are exempt from paying sales tax or VAT if they sell the product to the end user or another vendor in the same region. US tax system doesn't have VAT.

For filing a company’s tax returns in the US, it is not necessary you have to follow the calendar year. It means that if you open your company in November 2022 with only 1 month left before the year-end, then it is not necessary to file your business tax returns in March or April 2023.

Business tax filing is in fact done 3.5 months after the end of the 1st year of your company formation. This means that if you open the company on 30th November 2022, then your company’s tax returns will be due on March 15th, 2024. This applies to only a) C-Corp and b) Single member LLC filing as C-Corp or S-Corp.

For a) Single-member LLC (which has to go with personal tax returns) and b) an LLC filing as a partnership, you have to follow the calendar year for their tax returns.

You must inform the CPA about what year-end date you want to choose for your business at the time of company formation.

So, based on your business needs, you are free to select the year-end of your business.

While some states like Florida and Wyoming have no personal income tax, they still have corporate taxes or other forms of taxation. No state offers both no sales tax and no corporate income tax. It’s important to consider the overall tax environment, including federal tax rates (21%) and state-specific tax structures.

Generally, a statutory audit or tax audit is required only for large companies, typically those with substantial loans or exceeding $25 million in annual transactions. Small businesses with lower revenue usually do not require such audits unless specifically requested by stakeholders or lenders.

Yes, payments from a U.S. company to individuals or entities are subject to federal withholding taxes, including Social Security, Medicare, and income taxes. State taxes may also apply, depending on the location. If you have U.S. payroll, withholding taxes must be made at both federal and state levels.

Sales tax is governed at the state level, so rates and rules vary by state. For example, New Jersey imposes a sales tax of 6.625% on merchandise but excludes services. To determine the correct rate, you need to consider the nature of the transaction and the state in which it takes place.