Must-Read Guide for Registering a US Company Tax Payment Essentials for Newcomers

Essential Guide to U.S. Company Registration Understanding the Taxes You Must Pay

As globalization accelerates, an increasing number of Chinese businesses and entrepreneurs are setting their sights on overseas markets. The United States, as one of the world's largest economies, has become a top choice for companies looking to expand internationally. In recent years, many small business owners, cross-border e-commerce sellers, and even tech startup teams have begun registering companies in the U.S., aiming to streamline international trade, secure funding, or build brand recognition.

However, registering a company in the U.S. is more than just completing paperwork-it’s the tax obligations that truly shape long-term operations. For newcomers entering the U.S. market, understanding the local tax system is essential to ensure legal compliance and avoid costly mistakes.

1. Overview of the U.S. Corporate Tax System

The U.S. tax system is complex, operating at three levels federal, state, and local. Businesses must meet various tax obligations depending on where they operate. At the corporate level, the main types of taxes include

1. Federal Income Tax

2. State Income Tax

3. Sales Tax

4. Employment Taxes

5. Other applicable taxes

2. Federal Income Tax A Fundamental Obligation

Regardless of the state in which a company is registered, any business generating income within the U.S. must file a Federal Income Tax return with the Internal Revenue Service IRS. The way a business pays taxes depends on its legal structure

C-Corporation Treated as a separate legal entity, it pays corporate income tax independently.

S-Corporation A pass-through entity; profits flow directly to shareholders, who report them on personal tax returns.

Limited Liability Company LLC By default, taxed like a sole proprietorship or partnership, but may elect to be treated as an S-Corp or C-Corp.

Partnership Not taxed directly; each partner reports their share of income.

For example, the current flat corporate tax rate for C-Corporations is 21%, a significant reduction introduced by the 2018 Tax Cuts and Jobs Act. This lower rate has attracted many foreign investors to establish entities in the U.S.

3. State Income Tax Varies by Location

In addition to federal taxes, most states impose their own corporate income taxes. Rates vary widely

California Up to 8.84%

New York Ranges from 6.5% to 9%

Texas No corporate income tax, but imposes a Franchise Tax minimum tax

Florida Flat rate of 5.5%, with certain exemptions

When choosing a location to register your company, consider not only the business environment and market potential but also the overall tax burden. Many foreign companies prefer Delaware due to its well-developed corporate law and pro-business climate-even though annual fees and taxes still apply.

4. Sales Tax Crucial for Retail Operations

If your business engages in retail-especially through platforms like Amazon-you must account for Sales Tax. While consumers bear the cost, businesses are responsible for collecting and remitting it to the state.

Historically, online marketplaces handled sales tax collection, but after the 2018 Wayfair Supreme Court ruling, remote sellers-including those based outside the U.S.-must collect sales tax if they meet certain thresholds e.g., $100,000 in annual sales or 200 transactions in a state.

This means even offshore companies selling to U.S. customers may need to register and pay sales tax if they meet these criteria.

5. Employment Taxes Costs of Hiring Staff

If you plan to hire employees or open an office in the U.S., employment-related taxes will apply

Federal Insurance Contributions Act FICA Covers Social Security and Medicare. Employers and employees each pay half of the total 15.3%.

Federal Unemployment Tax FUTA

State Unemployment Tax SUTA

Employers must also issue W-2 forms to employees and report payroll information to the IRS regularly. These tasks may seem burdensome, but they are crucial for maintaining compliance.

6. Other Common Taxes and Key Considerations

Property Tax Applies to businesses owning real estate, such as offices or warehouses.

Customs Duty Required when importing goods into the U.S.

Use Tax Imposed on purchases used within a state that were not taxed at the point of sale.

In recent years, the U.S. has tightened enforcement of tax rules for foreign businesses, especially in e-commerce and digital services. In early 2025, several Chinesecross-border e-commercecompanies faced investigations for failing to report sales tax, with some receiving hefty fines. This underscores the importance of strict tax compliance.

7. How to Manage U.S. Tax Challenges Effectively

1. Hire a Professional Accountant or Tax Advisor Especially during the early stages, experts can help develop sound tax strategies.

2. Use Automated Accounting Software Tools like QuickBooks or Avalara simplify sales tax calculation and reporting.

3. Review Financial Statements and Tax Records Regularly Ensure all tax obligations are met on time.

4. Stay Updated on Policy Changes U.S. tax laws-particularly at the state level-are subject to frequent updates. Adapting quickly is key.

Conclusion

Registering a company in the U.S. opens doors to global opportunities-but also comes with complex tax requirements. By fully understanding and proactively planning for these obligations, businesses can operate legally and grow sustainably. For entrepreneurs eyeing the U.S. market, preparing for the tax landscape ahead is the first step toward success.