Consumption taxes

Nature of the tax

Sales Tax is levied by individual States at various rates. For more specific information at local level, consult the  United States Taxation Site and the FTA website.

Tax rate

Varies by State and city (around 5% and 6%).

Reduced tax rate

Varies by State and city. Click here for more information.

Other consumption taxes

Other consumption taxes are levied at the local level. Click here for more information about other consumption taxes by states.

Corporate taxes

Tax rate

Tax rate for foreign companies

Corporate income is taxed at the federal, state and sometimes at the municipal levels. Income is taxed during the year that it is earned and again when it is distributed to the shareholders.

The income of a Corporation is taxed twice, once at the level of the corporation as a separate entity, and a second time at the shareholder level when profits are distributed by means of dividends.

Capital gains taxation

Capital gains are combined with ordinary income, and taxed at the same rates as corporate income.

Main allowable deductions and tax credit

- An exemption amount for the taxpayer, the spouse, each child, and any other qualified dependents, and certain disabilities,
- Mortgage interest paid on one's primary residence or other residence,
- Equity loan or Line of Credit interest,
- Charitable contributions to eligible entities,
- Business deductions, such as mileage, related to an individual's expenses regarding their employment,
- Business startup and operation, and farming expenses (including travel, meals), not to exceed business income,
- Union and professional dues,
- Medical expenses above a certain percentage of the individual's Adjusted Gross Income (AGI),
- The cost of tax advice, software, and books,
- Moving expenses, in some cases,
- Job search expenses as one searches for work in the same industry,
- Educational expense (but only if it does not prepare one for a new career).

Other corporate taxes

In addition to Federal taxes, States and municipal taxes vary from one state or community to another.

Individual taxes

Tax rate

Allowable deductions and tax credit

Depend on the State of residence.

Special expatriate tax regime

An expatriate's US source income may be exempt from US tax. For further information consult the website USA International Offshore.

Double taxation treaties

Countries with whom a double taxation treaty have been signed

As of May 2010, 60 countries have signed a double taxation treaty with the USA

Withholding taxes

Dividends: 30%, Interest: 30%, Royalties: 30%

Bilateral agreement

Sources of fiscal information

Tax Authorities

IRS

Other domestic resources

White House.gov (pages on taxes)