States Sales Taxes
Have you noticed that when you buy something for $1.00 in one state, it might cost a few cents more when you buy it in another? Even among towns in the same state, the prices may still vary. This is because each state imposes its own sales tax rate, and most states allow local governments within them to add additional sales taxes if they choose.
Only five states do not impose a sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. Out of the states that do, Colorado’s rate is lowest at 2.9%. However, with local taxes added on to this, some areas in Colorado can have a tax rate ranging up to 11.2%. This is quite a variance even within the state! Many states cap their local sales tax rates at a much lower rate only allowing a 1-2% additional tax rate.
Selling a business will subject you to state sales taxes. Depending on which state you collect the proceeds in, you may be subject to fewer taxes. When selling a business for hundreds of thousands or even millions of dollars, a 1-2% tax rate difference can really add up! It is important to consider your future plans as you make a large change by selling your business. Will you stay in the same state, or are you looking to retire to your dream home? Considering the best tax rates by state can be a big money saver when it comes time to sell your business. The professionals at The Center for Financial, Legal, and Tax Planning, Inc. are more than knowledgeable with regard to state sales taxes. Please contact us at (618) 997-3436 for more information.