Main Tax Types to Know for US Company Registration, Smoother Entrepreneurial Journey

What Tax Types Should You Know for Registering a Company in the U.S.? Make Your Entrepreneurial Journey Smoother

In recent years, with the acceleration of globalization and the flourishing development of cross-border trade, an increasing number of Chinese entrepreneurs have chosen to set up companies in the United States. Whether it is to expand international markets, attract overseas investment, or take advantage of the mature business environment and technological resources in the U.S., America has become a dream destination for many entrepreneurs. However, tax issues are often a major challenge for new startups on this land full of opportunities. So, what are the main types of taxes that Chinese enterprises planning to register a company in the U.S. should understand? This article will analyze the U.S. tax system in detail based on recent reports, helping you start your entrepreneurial journey more smoothly.

Federal Income Tax

First and foremost, we must mention the federal income tax, which is one of the main sources of revenue in the U.S. Similar to China's individual income tax, the U.S. corporate income tax also adopts a progressive tax rate system, but its scope of application differs. According to the latest data, the standard federal corporate income tax rate for 2025 is 21%, applicable to all eligible C-type corporations C-Corporations. There are also special regulations for S-type corporations S-Corporations and sole proprietorships. For example, S-type corporations usually only need to pay personal income tax at the shareholder level, without the need to double pay corporate income tax.

It is worth noting that earlier this year, the U.S. Congress passed an important tax reform bill aimed at providing more tax breaks for small and medium-sized enterprises. This bill allows eligible small businesses to enjoy additional deductions, thereby reducing the overall tax burden. If you plan to establish a small company in the U.S., be sure to keep abreast of the latest policy developments to maximize the use of these preferential policies.

State Income Tax

In addition to federal-level taxation, each state has the authority to formulate its own income tax regulations. Currently, 41 states in the U.S. impose state-level corporate income tax, with rates ranging from as low as 3% to nearly 12%. For instance, California is known for its relatively high tax rate, while Nevada does not levy corporate income tax at all. When choosing a location, business owners must comprehensively consider factors such as geographical position, market potential, and tax costs.

Recently, media reports have indicated that due to the slow economic recovery after the pandemic, multiple states are actively adjusting their tax policies to attract more foreign-invested enterprises. For example, Texas recently announced a series of incentive measures, including exemptions on income tax for newly established companies in certain industries for the first two years. This undoubtedly provides significant appeal for companies considering settling in the state.

Sales Tax

Another key tax type that cannot be overlooked is the sales tax. In the U.S., whether to levy and how to levy sales tax is determined by each state. Currently, approximately 45 states implement some form of sales tax, with specific rates varying by region. For example, New York City’s combined sales tax rate is as high as 8.875%, while in places like Oregon, there is no sales tax.

For businesses engaged in retail or service industries, accurately calculating and reporting sales tax is particularly important. Especially when your business involves inter-state transactions, it is necessary to comply with complex compliance requirements. Therefore, it is recommended that companies consult professional accounting teams in advance to ensure all operations comply with local laws and regulations.

Property Tax

Finally, we cannot ignore the important component of property tax. Property tax is levied on land, buildings, and other immovable properties. In the U.S., property tax is managed at the local level, with specific amounts depending on asset value and assessment standards of the region.

In recent years, with the continuous rise in the real estate market, the property tax burden in some popular cities such as San Francisco and Seattle has gradually increased. Professional advice reminds businesses to carefully assess the related tax impacts before purchasing or leasing office space to avoid unnecessary financial losses.

Conclusion

In summary, the U.S. tax system is complex and diverse, covering multiple aspects such as federal income tax, state income tax, sales tax, and property tax. As a business about to step onto this land, only by fully understanding and reasonably planning these tax types can you truly achieve efficient operation and growth. It is hoped that the information provided in this article can help you better address future tax challenges, making your entrepreneurial journey smoother and obstacle-free!