Comment by wtcactus
7 days ago
I have a doubt for some years about the US, but never really got good info on it (maybe because it’s a silly doubt).
So, when I sell something to the USA (on eBay) for instance. It doesn’t pay VAT automatically. Do Americans pay VAT when it’s delivered?
But, when an American buys something locally, they do pay VAT, correctly?
We used to not pay anything for stuff, for instance I bought items that were dropped shipped from China under a certain value but that has ended. https://www.wsj.com/livecoverage/trump-tariffs-trade-war-sto... Sales taxes are on a state by state basis and online companies are required to collect it from the buyer and forward/report it to the state. Local purchases all have sales tax paid to state governments, some to city in urban areas. Some food items are exempt. A state can choose to not have a sales tax but most do IIRC. There is no federal sales tax. Until these tariffs which are essentially taxes.
The US doesn't have an equivalent to VAT. Sales taxes at are at the level of states and cities. VAT would be in effect a federal sales tax, which the US doesn't have.
Since different states had widely varying sales taxes (ranging from 0% to 8%), for people living close to state lines, it sometimes makes sense to buy items just across the line to avoid sales tax. Although some business/individuals would get in trouble for deliberately evading sales taxes, as you are technically supposed to report on taxes.
This created a problem with online retailers, who were essentially avoiding sales taxes. Legislation in the mid 2010s changed that, the law is somewhat complicated but generally the sales tax is collected where the business "resides", which could be multiple jurisdictions. If there is any "office" in a state, all purchases originating from within that state have to pay that states sales taxes.