International Planning

Entry Strategy for the US Tax System

entry strategy for the US tax system

If you are considering expansion to the United States, there are innumerable factors you will be considering, including the US tax system.

There are many parts of the US tax system, and many tax traps for the unaware new business to fall into. The fact that there are 50 states, each with their own tax jurisdictions and structures, and a myriad of city and county tax regimes as well simply multiply the problems.

Any inbound company needs to first ascertain where they want to do business, and where they can do business. These decisions should be made based on the economics. Once you know where, it becomes easier to understand the tax implications of where you will establish your domicile. And you can’t stop there, as you will need to remember that it is not just income taxes.

There are payroll taxes, sales taxes, per capita taxes, business licenses, property taxes, and, if you’re lucky enough to deal in “stuff” rather than knowledge, you have the thrill of managing customs duties and clearances.

One of the strengths of the US economy is the absolute ease of moving across state lines while doing business. And on the flip side, that is another of the tax traps, because certain activities can expose your income to taxes in multiple states, while others may not.

Suffice it to say that forewarned is forearmed, and any non-US company contemplating entry into the US market needs to find the right help to do its homework on the US tax system. Work with a company who is experienced at navigating the US tax system and the many other factors you will need for a successful US strategy.


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