US Sales and Usage Tax Consulting


Outline of US sales tax / usage tax consulting

Tangible goods and intangible goods are increasingly being sold across the border as the economic cross-bordering progresses.

In the United States, taxes such as sales tax and usage tax will occur when physical presence is recognised. In addition to tax analysis of these indirect taxes, we support actual registration and declaration.



There is a concept of Nexus (Nexus) to decide whether there is an obligation to collect, but if there are facts such as the following outside the state, it is assumed that there is Nexus in the state and the obligation to collect sales tax is Occur.

  • The presence of an agent in the state
  • Advertisement in the state
  • There is a transport vehicle in the state
  • Transfer of ownership within the state
  • Invitation in the state
  • Sales promotion activities within the state
  • You own assets within the state
  • Providing services within the state

In summary, there are (1) an office in the province, (2) possessing assets in the state, (3) periodically, for example, there is a salesperson or agent who visits the state three or four times a year, , The corporation is deemed to be physically present in the state and obligated to collect sales tax and use tax.

In order for a state in the United States to require registration under sales tax or usage tax, the minimum involvement in that state is required. I explained about the case where Nexus has been approved earlier, but these relationships or certification of "nexus" differs from state to state. In addition, sales tax / usage tax for each state Nexus standard differs from other taxes (eg corporate income tax, employment tax etc.) certification range.



Nexus problem by digitalisation

In general, the physical existence is required in the state concerning Nexus. However, the number of states subject to taxable economic contacts called economic nexus has increased recently. Digital services by Japanese companies are steadily expanding, and even in the manufacturing industry, there are examples of developing services that are accompanied by various services.

For this reason, Nexus for digital services is a very important issue not only for so-called technology companies but also for other companies.


Optional disclosure(Voluntary Disclosure Agreement)

In the case where a company has a tax obligation on sales tax in a state in the past and these tax obligations occurred before the past 60 days and the company does business without registering the sales tax In unpaid states, you can comply with compliance without being subject to penalties by doing Voluntary Disclosure Agreement.

  • Disclose past actions in your state state.
  • We will assess past tax liabilities and negotiate a limited tax obligation with the state.
  • We will negotiate penalty mitigation for declaration misses and under declarations.
  • We will negotiate payment on unpaid taxes.
  • Corresponds to registration of sales tax and usage tax.

Under the above circumstances, if you aim for registration of sales tax or usage tax, you can reduce the amount of tax payment when dealing with such voluntary disclosure. On the other hand, if you aim to register these in the absence of voluntary disclosure, you are subject to more compulsory audits and long-term tax response to past economic activities.

For details, please contact below.

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