SALES AND USE TAX
SALES AND USE TAX
Trusted Sales Tax Solutions
Sales and use taxes can be a labyrinth of regulations and requirements, varying not only from state to state but often within local jurisdictions. Staying on top of changes to these requirements is essential to avoid penalties, reviewing audits, and minimizing potential disruptions to your business. If you are a larger, multistate company, this is especially important and could require more advanced consulting to maintain compliance. CKH Group’s Solutions are crafted to provide clarity in this complex environment to both small business and large companies, allowing you to focus on what matters most—running your business.
As a leading CPA firm based in Atlanta, we take pride in offering Tax Services designed to:
- Maintain tax compliance
- Reduce risk or costly errors
- Provide timely and efficient results
What Is Sales and Use Tax?
CKH Group provides sales and use tax services as a part of our business tax solutions. However, CKH Group can also meet the needs of larger multi-state companies with more complex sales tax needs. The breadth of our sales and use tax services encompasses a large variety of solutions including compliance, technology, and consulting. This includes outsourcing, exemption certificates, nexus analysis, registration, VDAs, automation, taxability analysis, audit defense, refund analysis and recovery, process improvement, training, and M&A diligence.
What is Sales Tax?
Sales tax is a levy on the sale of goods and services and is typically a percentage of the purchase price added to the final cost. Its rates vary across locations, with each state and locality setting its own. At the state level, multiple tax rates are common. Essential items like groceries may have lower rates or exemptions to ease the tax burden on low-income individuals.
What is Use Tax?
Use tax is a levy imposed on goods and services based on their use, storage, or consumption, especially those acquired without paying sales tax. It is typically enforced by the state or local government where the items are utilized. Its purpose is to ensure that individuals who buy goods or services from out-of-state vendors or online merchants contribute an equivalent tax amount as if the purchase occurred locally.
Sales Tax Vs. Use Tax: What’s the Difference?
Both types of taxes are imposed on the sale of goods and services. The key differentiator is that sales tax is a tax on the sale of tangible personal property, while use tax is a tax on the use of that property within a state.
Generally, sales tax is charged at the time of the sale by the seller, while use tax is self-assessed by the purchaser. It is most often applied to goods that are purchased outside of the purchaser’s state and then brought into the state for use, or goods that are purchased online or through catalogs.
What Is The Average US Sales Tax Rate?
As of 2023 (subject to change in 2024) the average sales tax rate of all US states is 5.53%, with the top 5 highest rates being California (7.25%), Indiana (7.00%), Mississippi (7.00%), Rhode Island (7.00%), and Tennessee (7.00%). The lowest tax rates are Colorado (2.9%) followed by Alabama, Georgia, Hawaii, New York, and Wyoming all at 4%.
What Is The Georgia Sales Tax Rate?
Georgia has a 4.00 percent state sales tax rate, with a max local rate of 5 percent. It has an average combined state and local rate of 7.4 percent. Overall, Georgia’s tax system ranks 32nd according to TaxFoundation.org’s 2024 State Business Tax Climate Index. If you’d like to calculate the cost of goods depending on this rate, you can use this sales tax calculator.
Sales Tax vs. VAT (Value-Added Tax)
The United States is one of the few developed countries that maintains sales tax as opposed to VAT (value added tax). In these VAT systems, a percentage is levied on the value added at each production level of a commodity. This approach targets each company’s gross margins, diverging from taxing the end user directly.
The primary goal of VAT is to eliminate tax cascading, or double taxation, as it moves from the manufacturing stage to consumption. In contrast, the U.S. system utilizing sales tax, entails taxes paid on the value of goods and margin at each production step. This structure results in a higher cumulative tax burden, ultimately reflected in elevated costs for goods and services passed on to the end consumer.
CKH CPAs & Advisors are by far and away the best accountants we’ve used. They are extremely communicative and responsive, capable of helping with a wide array of issues. The peace of mind that comes with knowing your accountants are doing a great job is priceless — highly, highly recommend.
Why Choose CKH Group?
CKH Group’s tax services are designed to unlock your tax potential and secure your financial well-being.
With CKH Group, you’re not just getting a CPA firm; you’re gaining a trusted partner committed to your success. Discover the CKH Group advantage, where excellence, integrity, and expertise come together to create a powerful tax partnership for you. Contact us today to explore how our tax services can add value to your organization.
