Quote:
Originally Posted by PeterMorley
Don't have much to do with the USA but their tax rates seem quite low (but I think vary between States) and I just discovered they can import things up to $800 without costs. But I'm not surprised it is complicated!
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The USA has a lot of tax jurisdictions and any transaction can attract a number of tax raising, reporting and paying opportunities with no consistency expected.
It can be so complex that many companies find it easier to report approximately what they think is likely to accepted and then wait to see if anyone wishes to audit them. In theory a company could be independently audit by all 52 states every year. In practice an Audit company will set up an audit on behalf of one or more States and then offer to also audit for the others if paid a suitable fee.
Businesses will often accept these expenses as a cost of doing business since it usually results in a payment of some kind but that is cheaper than trying to understand and apply the plethora of tax rules that can be different for different types of supply on the same invoice and extend to influences right down to the town in which an invoice was created at one end of the chain and was paid at the other end.
And then there can be Transit taxes in some places, charged on goods passing through.
From memory of times back in the 80s and 90s, investigating what would be required in a computerised system to feed data to a tax calculation application for the whole of the USA, we discovered that someone had estimated that there were about 20 thousand possible combinations that could be applied to an invoice.
Even dealing with the major subcontracted tax calculation management companies we never found anyone in an expert advisory role who understood (or claimed to understand) more than a handful of the rules and combinations. In fact for the sort of businesses to which we were offering software, most did not understand the rather basic questions we were asking.
It was an in interesting and eye opening project at the time.