Fiscal Framework

In the United States must pay taxes – and on that basis, they are called Taxpayers – individuals or companies that are national or resident in the United States for all their worldwide income, and foreign individuals and corporations, not residents of the United States, for income obtained from the development of business activities in the United States.

Every taxpayer must obtain a Tax Identification Number (TIN) from the United States Federal Tax Administration. This number will allow them to fulfil their tax obligations throughout the United States, regardless of the state in which they reside or where they do business. The application form and the TIN name differ depending on the taxpayer’s status: whether they are an individual or legal entity, a national or foreign national, and, where applicable, whether they are a resident of the United States.

The Social Security Administration (SSA) of the Federal Government of the United States is authorized to issue the NIF to American individuals, permanent residents and residents or people with a work permit approved by the USCIS, and which is called the Social Security Number (SSN).

The IRS is authorized to issue a NIF to foreign individuals, non-residents or people without a work permit approved by the USCIS, but who obtain income in the United States derived from investment operations and on whose basis they must be fiscally identified and taxed under the so-called Individual Tax Identification Number (ITIN).

The IRS also has the authority to issue a NIF to companies incorporated in any State of the Union , abroad and registered or not in any State, and which is called Employer Identification Number (ITIN). Identification Number (EIN), with which they must complete their tax obligations related to business or investment operations in the United States.

Corporate tax (Legal Entities Income Tax)

In the United States, corporations incorporated and registered in any state of the United States must pay tax on their worldwide income, and foreign corporations, whether registered in any state or not, must pay tax on income earned from conducting business activities in the United States.

The Tax is applied to the Taxable Base (Taxable Income) or Net Profit resulting from deducting from Gross Income the deductions permitted by law, such as business expenses, interest on loans, some taxes and certain losses. Capital Expenditures are deductible through Depreciation and Amortization.

On the taxes that companies pay in foreign countries for the profits obtained in those countries where they carry out business activities, they obtain Tax Credit (Tax Credit) in the United States if there is a DTA between the United States and those countries regarding Corporate Tax.

The states of the Union also apply corporate taxes, although these taxes are deductible from the Federal Corporate Tax.

The states of Nevada, South Dakota, Washington and Wyoming do not impose a state corporate tax.

Personal Income Tax (Individual Income Tax)

In the United States, individuals who are U.S. citizens or residents are taxed on all their worldwide income, and foreign individuals, whether they are U.S. residents, are taxed on income earned from conducting business activities in the United States.

Individuals can obtain tax credits in the United States for taxes paid in foreign countries on profits earned in those countries as a result of conducting business activities if there is a direct income tax transaction between the United States and those countries.

The states of the Union also impose personal income taxes, although, as with state corporate taxes, these taxes are deductible from federal income tax.

The states of Alaska, Florida, Nevada, New Hampshire, Rhode Island, Washington and Wyoming do not impose a State Personal Income Tax.

Payroll Tax, Unemployment Tax, Social Security Tax, and Medicare Tax

• Payroll taxes are actually withholdings levied on wages by companies and paid to federal, state, and local governments in states where personal income tax is applicable. The amounts paid can be recorded as a tax credit by employees on their personal income tax.
  Various factors are involved in calculating the withholding, but since withholding is a prepayment of personal income tax, the maximum tax rates are guaranteed at the federal level, and withholdings made at the state or local level are deductible from the federal income tax.
• Employers must contribute to their employees’ unemployment insurance at the federal and state levels. The percentage varies by jurisdiction, industry, and employee experience.
  
  The Federal Unemployment Tax Act exempts certain wages from paying these taxes, such as:
  • Wages for services rendered outside the United States; payments to the estate of a deceased employee in any year following the year of the employee’s death.
  • Wages paid by a parent to a child under twenty-one years of age, or those paid by a child to a parent, or those paid by one spouse to another.
  • Salaries paid by foreign governments or international organizations; salaries paid by the federal, state, or local government of the United States.
  • Salaries paid by hospitals to their inmates.
  • Wages paid to newspaper delivery drivers under eighteen years of age.
  • Wages paid by a school to a student at that school; wages paid by an organized camp to a student.
  • Salaries paid by non-profit organizations.

Social Security and federal health insurance contributions have traditionally been paid by both employers and employees in equal shares.

Estate Tax and Gift Tax

Inheritance and Gift Taxes are collected by the Federal Government and most State Governments.

The Inheritance Tax is levied on the Relict Asset of an Inheritance that is transmitted mortis causa , by testamentary means or without a will, by a Deceased Person to his or her Beneficiaries.

States with some form of inheritance tax include Connecticut, Hawaii, Indiana, Iowa, Kansas, Kentucky, Maryland, Nebraska, New Jersey, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Vermont, Washington, and Wisconsin.

The United States has signed and ratified an Inheritance and Gift Tax Agreement with Germany, Australia, Austria, Denmark, France, Great Britain, Japan, and Sweden, and an Inheritance Tax Agreement with Canada, Finland, Greece, the Netherlands, Ireland, Italy, Norway, Switzerland, and South Africa.

Customs Duties

Customs taxes or tariffs are the exclusive regulation and enforcement responsibility of the United States Federal Administration.

On the one hand, the United States International Trade Commission (United Estates International Trade Commission USITC) publishes annually a Harmonized Tariff Schedule (HTS) which contains the Customs Tariffs applicable to the importation of any type of merchandise into the United States.

Furthermore, CBP ensures the application and compliance of the legislation and Customs Tariffs published by the USITC.

All merchandise imported into the United States is generally subject to customs duties, unless there is a trade agreement between the United States and the country of origin of the merchandise that exempts it from the application of customs duties for its legal importation into the United States. All merchandise subject to customs duties cannot legally enter the United States until entry has been authorized by CBP and the customs duties have been duly paid.

Payment of Customs Tariffs is the responsibility of the Importer of the merchandise to the United States, who may be either the owner of the merchandise or its buyer, or the customs broker representing them in the import customs process.

All merchandise to be imported into the United States must be accompanied by its Bill of Lading (Bill of Landing), which describes the merchandise and a Commercial Invoice (Commercial Invoice), which reflects its commercial transaction value. The goods must remain in the Customs Zone or Free Trade Zone until the Customs Duties are paid and, therefore, entry into the United States is authorized by CBP, which has the authority to inspect all merchandise that may be imported into the United States.

Violation of customs regulations may result in civil penalties imposed by CBP, such as seizure and subsequent sale of the merchandise, as well as monetary penalties up to twice the value of the merchandise and criminal penalties of up to 20 years’ imprisonment.

Sales Tax and Use Tax

In the United States, there is no federal sales or use tax, and five states—Alaska, Delaware, Montana, New Hampshire, and Oregon—do not impose sales or use taxes.

Sales or Use Tax is administered at the state level, although these taxes are applied by Local Government (Counties or Municipalities).

Unlike the Value Added Tax (VAT), Aded Sales or Use Tax is applicable only once , on retail sales, and generally to the final consumer of the product or service. Sales Tax must be collected by the seller who makes the sale to the final consumer on which the tax is applicable. Use

Tax is applicable to a product or service that has not paid Sales Tax in a given jurisdiction, but is used in that jurisdiction where it would have had to be paid at the time of sale, and must be paid by the taxpayer. Use Tax therefore functions as an equivalent to Sales Tax.

Sales tax is generally applicable to the onerous transfer of tangible property. Transfers of real estate are excluded from this tax, as documentary taxes apply to these transfers in some states. Also, in some states, wholesale sales are exempt from this tax, especially in cases where a product or merchandise is used to manufacture another, or is used as an integral part of a manufacturing process.

Food and medicines are generally also exempt from this tax. The transfer of intangible property is also exempt from this tax, although some states tax certain transfers and licences of intangible property. Regarding services, it should be noted that the provision of these services is taxed differently in different states.

Property Tax

Property taxes in the United States are generally the responsibility of local governments (counties and municipalities) and are the primary source of revenue for these governments.

The real property subject to liens is usually the land, buildings, and permanent improvements made on a property.

The base property value considered in determining the tax is the Market Value (Market Value). In cases where a given property has recently been sold, the actual price paid for that property may be considered its current market value.

Generally, market value is defined as the amount that any buyer unrelated to the seller would be willing to pay for the property in a normal sale. Comparable sales of other properties and other applicable techniques in different jurisdictions and specific cases may complement and define the market value applicable to any property.

To quantify the tax, most jurisdictions use an Assessed Value of the property, which is the result of multiplying the property’s market value by an Assessed Rate. Assessment rates are imposed by the jurisdictions responsible for this matter.

The tax is determined by multiplying the assessed value by a tax rate, which is generally known as the Millage Rate, since it is expressed in thousands. One Mill is equal to one-tenth of a cent. The Millage Rate is typically set by municipal elections.

The assessment process varies from jurisdiction to jurisdiction, but generally, the assessment is carried out by an Official Tax Assessor of the Administration. The assessment is communicated to the property owner, who, after reviewing the assessment, can dispute it and challenge it, even in court. In cases of non-payment, the administration may require additional payment of penalties and interest, and if the owner continues to fail to pay, the property could be seized and foreclosed and sold to settle the tax debt.

Excise Taxes​

Consumption taxes are indirect taxes levied by the Federal Government, State Government, and Local Governments on certain products and services.

The IRS classifies products and services subject to excise taxes into the following groups: fuel, communications, air and maritime transportation, manufactured products, transportation and industrial vehicles, insurance, and other services.

Consumption taxes are, by their very nature, paid by the end consumer and collected by the manufacturer or seller of the product or service in question, who in turn is responsible for paying them to the competent Federal, State, or Local Administration.