What is the US Sales Tax or Value Added Tax? 

First of all, it is important to know that there is no common sales tax or value added tax (VAT for entrepreneurs) in the USA but that each of the individual 50 states sets its own tax rates. This means that examining is confusing and complicated at first. In addition, there is the local VAT which most cities and municipalities charge in addition. In some cases the tax rates also change depending on the season or the needs of some municipalities and cities. 

In 1937 the independent American research institute Tax Foundation was founded in the USA which lists the average tax rates of the individual states on its homepage. (https://taxfoundation.org) Here, consumers including European travelers can get an overview of the general tax burden on goods and services in the US. To calculate the figures, the Tax Foundation added the state-wide VAT rates and the average rates of the additionally calculated local tax rates. Thus the states of the United States with the highest combined tax burden of state and local sales tax rates are:

Tennessee with 9.45%
Arkansas with 9.26%
Alabama with 8.91%
Louisiana with 8.91%
Washington with 8.89% 

Some places have what is known as a minimum purchase price for which a VAT refund can be requested or certain types of purchase that cannot be made tax-free. A VAT refund of up to 10% of total expenses can be reimbursed for eligible purchases. Sales tax and VAT refund policies vary by country and region. Interested applicants should therefore be advised in advance before they expect a US VAT refund. 

The USA is (still) at the top of all economies in the world and generates around a fifth of the total world income per year with a corresponding Value-Added Tax turnover. This is due on the one hand to the large area of the country with 10 million km² and on the other hand to the little interference of the state in economic activity. 

The USA is also the largest importer of goods in the world, only China exports more goods than American companies. The US sales tax volume is correspondingly high. The United States ships most of its products to Canada, Mexico, China, Japan, the United Kingdom, and Germany. Most goods to the US are shipped from China, Canada, Mexico, Japan and Germany in descending order. 

America is an absolute service country which is particularly evident in the fact that almost 70% of the gross domestic product (GDP) is generated from the service sector. The industrial sector including agriculture accounts for about a fifth of GDP with American farmers accounting for only about 1 %. State-owned companies and authorities generate around 13% of GDP. 

Some deliveries by German companies to a third country, i.e. the recipient based outside the EU such as the USA are exempt from USA VAT if certain requirements are met. The legal basis for the tax exemption can be found in §§ 4 No. 1a and 6 of the German Value Added Tax Act (UStG) as well as in Paragraphs 8 to 17 of the Value Added Tax Implementation Ordinance (UStDV). If the German buyer has dispatched the goods to the USA the arrival of the goods at the destination is sufficient to be exempt from the tax. If, on the other hand, the buyer carries out the shipment the goods must have arrived in the third country and the buyer must be a foreigner in order to meet the requirements. Please note: A delivery to your own subsidiary or to another German company in America does not entitle you to tax exemption. In order for the German tax office to recognize the VAT-free invoice, the German supplier must observe the following points: On the one hand, proof of the arrival of the goods in the USA by means of clear evidence. Furthermore, either the registration in the electronic export procedure ATLAS-Export and the compliance with the steps required there or, in the case of non-electronic registration, the presentation of the white carrier certificate or the commercial consignment note or a bill of lading or a posting slip for the postal service or a duplicate of the posting slip including the dispatch reference number of the order registration (Movement Reference Number MRN). The invoice must contain a reference to the tax exemption and the invoice amount must either be shown in EUR or calculated from USD to EUR. 

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