Tax Burdens May Exist Tax Burdens May Exist
MARK L. BARIE: PAYING TAXES SOUTH OF THE BORDER
Q : Our company has begun to sell its products in the US. Should we be con-cerned about paying taxes?
A: There are two types of (US) taxes you should be concerned about: income taxes, which are paid by a company to State and Federal offi-cials,
and secondly, sales taxes, which are collected by companies, and re-mitted
to the state( s).
Corporate income taxes are gen-erally
not payable if your company has no "presence" in the US (i. e.:
employees at a physical location). In recent years, however, a number of
states have become considerably more aggressive when deciding whether or
not a foreign company has a "pres-
ence" in their state, sufficient to jus-tify corporate income taxes.
Because each state's laws are somewhat different, you would be
well advised to consult a CPA (char-tered professional accountant) who in
fairly quick fashion can advise you as to your obligations (no tax liability,
information returns only, or taxes are
With respect to the collection and remittance of sales taxes, it is gener-ally
true that if you are selling a prod-uct to the end user and the product is
NOT used in manufacturing then sales taxes must be collected and
remitted to the relevant state( s).
Again, a determination should
be made as to your company's "pres-
ence" in the particular state, as this will impact upon your obligations
with respect to sales taxes.
In no event, should a company
with sales in the US or even a mini-mal presence (a sales representative
who make calls in the US) ignore the possibility that a (US) tax burden
may exist. Seek professional assist-ance and verify what, if any, tax bur-den
you may have.
Mark L. Barie is founder and presi-dent
of Crossborder Development
Corporation, a consulting firm to
foreign companies who want to do
business in the U. S. Mr. Barie can
be reached at email@example.com