Sales and Payroll Tax Registration in the USA for Non-Citizens
We know that sales increases atleast ten times when you list your products on marketplaces like Amazon, eBay, Walmart, etc. But along with that, increases the sales tax and its complications due to the obligation to pay taxes in more jurisdictions due to cross-state selling. The biggest problem is that some states even want you to have an Individual Transaction Identification Number (ITIN) before applying for a sales tax permit.
Coming to Payroll tax registration, most of the states have two payroll taxes: Withholding and Unemployment Tax. Owners/Managers have to sign-up for the appropriate accounts to hire, for processing payroll and to file returns. Further, payroll taxes are levied on both: federal and state level, thus, registration is required on both the fronts. Here as well, each state has different legal provisions governing employment taxes.
Things to Consider
As we mentioned at the very outset, every state has its own taxation norms thus they ask for different kinds of information. For instance, in Connecticut, they ask you to furnish general info around business identification, major business activities, organisation type, etc while in Indiana they ask stuff like estimated monthly taxable sales, is your business is seasonal or regular; will you sell food and beverages, will that beverage be alcoholic, etc.
One needs to be very mindful while filling information for a sales tax permit because it will have far-reaching consequences on the profitability and growth prospects of the business. For instance, in Indiana, if you leave the estimated taxable sales column empty in the application, you will be taxed monthly. This small mistake might decrease the liquidity in the business and increase procedural cost restricting business expansion prospects, not to mention the constant tax hassle tolling on billable timing.
For payroll taxes, registration with the state’s department of insurance and work force or employee agency is required. Both the taxes are applicable on employees’ paycheck, thus this registration is crucial to ensure correct deduction from each pay cycle and for smooth hiring formalities, respectively.
Ascertain the nexus of your business with states in which you operate. Then, you require a business checking account in the USA for which you need EIN. After that, you also need to have an ITIN before applying for a sales tax permit.
For payroll tax registration, again, EIN is required. North American Industry Classification System (NAICS) Code has to be obtained, which categorizes businesses as per their industry and other particulars.
Time Taken to Obtain Sales Tax Permit
Again, it varies from state to state, in some states like Maine, it takes 2 to 3 days while in some states like Kansas it takes 3 to 4 weeks for your sales tax permit to arrive while in some states like Alaska you get it immediately.
Due to the home-based, temporary and virtual nature of employees, Payroll registrations can be done in a short duration in many states.
We have 8+ years of experience in securing sales tax permits and managing all the taxation requirements for our beloved Indian entrepreneurs in the US. Our clientele includes top-notch organisations like Paperboat Apps, VSV Wins Group, Numiv Research, etc and we have been entrusted with taxation work of thousands of High Net Worth Individuals across the globe. many more.
Our professionals not only provide tailor-made solutions for your business but also equip you with comprehensive and cohesive knowledge to plan and optimise your other business operations and resources accordingly. We offer an amazing value-for-money proposition to our clients on the retainership agreement availing them an umbrella solution to all their business requirements. For further queries, you can reach out to us on the mentioned contact details.
We get your sales and payroll tax registrations done, along with providing a range of other services to take full accountability as the virtual CFO to your business.
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