How many states have sales tax

how many states have sales tax

The federal government of the U.S. collects tax on your income. Additionally, most states and some local government have their own income taxes.

Sales Tax

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In many states, whenever you buy most items, you will be charged a sales tax. Sales tax percentages vary among different states and a few states have no sales tax. States with no state income tax have much higher sales tax.

Merchants are responsible for collecting sales tax and depositing it with the state authority. Not all products in all states are subject to sales tax. In some states, there is no sales tax on food and clothing. Restaurant food may be taxed though. If you pay in cash to a street merchant, you may not be charged sales tax.

The U.S. has no concept of VAT (Value Added Tax).

Property Tax

If you live in an apartment, you don't have to worry about property or real estate tax. The states with no state income tax have very high property tax rates. Tax rates may vary based on city, town, or county. You will be charged

property taxes based on the assessed value of your property. The value will be assessed by the tax authority itself and may not be the same as the market value of the property and may be lower or higher based on the real estate market.

Property taxes essentially help pay for public schools, community colleges, and other local government matters.

If you are wealthy and expect to leave behind over $2 million in assets for a single person (over $4 million in assets for married couples), you need to consult an attorney for estate planning and to have your will drafted appropriately. Actual amounts that are not subject to estate taxes change over time. Of course, no one plans to die, but if you die unexpectedly, you want your property taken care of and would probably prefer that your county clerk didn't handle it.

An attorney will help you find ways to minimize estate taxes. Life insurance is a common means to help you avoid or minimize estate taxes. You need money to pay estate taxes only when you die. Life insurance pays money only when you die. Therefore, that combination works out well for most people.

Source: www.immihelp.com

Category: Taxes

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