Navigating U.S. Tariffs and State Sales Tax: Strategic Guidance for Global and Domestic Companies

• Global companies in the US face challenges with federal import tariffs and state sales tax systems.
• Tariffs and state sales taxes impact pricing, invoicing, and compliance.
• Importers may list tariff surcharges separately on invoices to recover costs.
• There is uncertainty if these surcharges are subject to US sales tax.
• States like California, Illinois, New Jersey, South Carolina, Wisconsin, and Washington have issued guidance.
• Tariffs are federal taxes on imported goods, paid by importers.
• States cannot impose their own import or export duties without Congressional approval.
• The inclusion of tariffs in the sales tax base depends on who is the importer.
• If the seller is the importer, tariffs are included in the taxable sales price.
• If the purchaser is the importer, tariffs are excluded from the sales tax base.
• California: Sales tax on tariffs depends on who is the importer of record.
• Illinois: Tariffs are part of gross receipts and not deductible from sales tax.

Source: bdo.global

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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