United States: Business Environment
The five states with the highest average combined state and local sales tax rates are Louisiana (9.56%), Tennessee (9.55%), Arkansas (9.45%), Washington (9.38%), and Alabama (9.29%). For the full list of applicable rates, click here.
Excise duties are levied at federal and state levels on a wide range of goods and activities, including gasoline and diesel fuel used for transportation, air transportation, wagering, foreign insurance, certain sporting goods, firearms and ammunition, alcohol, tobacco, and selling certain goods at retail (e.g. heavy vehicles, trailers, bodies, and chassis).
Importers, manufacturers, and sellers of ozone-depleting chemicals (ODC), or imported products manufactured using such chemicals, are subject to environmental taxes calculated per weight of the ODC.
Foreign companies are however subject to a branch profits tax at 30% of ECI that is not invested in U.S. trade or business and a 30% withholding tax on non-ECI U.S.-source income (e.g. dividends, interests, rents and royalties). Other arrangements can be made through tax treaties. A 30% branch profits tax also will be imposed on interest payments by the U.S. branch to foreign lenders.
Certain companies are subject to an accumulated earnings tax equal to 20% of "accumulated taxable income" if they are deemed to be accumulating earnings and profits for the purpose of avoiding shareholder personal income tax.
U.S. corporations and foreign corporations meeting specific criteria of receiving significant "passive income" and being "closely held" may be liable for the personal holding company tax, levied at 20% of undistributed personal holding company income, which is imposed in addition to the regular tax.
Importers, manufacturers, and sellers of ozone-depleting chemicals (ODC), or imported products manufactured using such chemicals, are subject to environmental taxes calculated per weight of the ODC.
Individuals, estates, and certain trusts must pay a 3.8% tax on net investment income exceeding a threshold (USD 14,450 for estates and certain trusts in 2024).
In addition to federal taxes, state and municipal taxes vary from one state or community to another, including property taxes on real property, stamp duties, franchise taxes and taxes on the capital of a corporation. For more details, consult the Tax Foundation website.
United States | OECD | Germany | |
Number of Payments of Taxes per Year | 10.6 | 10.1 | 9.0 |
Time Taken For Administrative Formalities (Hours) | 175.0 | 163.6 | 218.0 |
Total Share of Taxes (% of Profit) | 36.6 | 41.6 | 48.8 |
Source: Doing Business, Latest available data.
Different scales depending on the family status (married couples under a joint system, married couples under a separate assets system, single and head of the family), limited to seven rates. | 2024 Federal Income Tax Rates: 10%, 12%, 22%, 24%, 32%, 35% and 37% |
Single payers (USD) | Tax Rate |
0 to 11,600 | 10% |
11,601 to 47,150 | 12% |
47,151 to 100,525 | 22% |
100,526 to 191,950 | 24% |
191,951 to 243,725 | 32% |
243,726 to 609,350 | 35% |
609,351 or more | 37% |
Married Filing Jointly (USD) | Tax Rate |
0 to 23,200 | 10% |
23,201 to 94,300 | 12% |
94,301 to 201,050 | 22% |
201,051 to 383,900 | 24% |
383,901 to 487,450 | 32% |
487,451 to 731,200 | 35% |
731,201 or more | 37% |
Head of Household (USD) | Tax Rate |
0 to 16,550 | 10% |
16,551 to 63,100 | 12% |
63,101 to 100,500 | 22% |
100,501 to 191,950 | 24% |
191,951 to 243,700 | 32% |
243,701 to 609,350 | 35% |
609,351 or more | 37% |
Alternative Minimum Tax (AMT) (applies if an individual’s tentative AMT liability exceeds that individual’s regular income tax liability.) |
26% up to a taxable income of USD 232,600 (in 2024) 28% on the amount in excess The AMT exemption amount for 2024 is USD 85,700 for singles and USD 133,300 for married couples filing jointly. AMT exemptions phase out at 25 cents per dollar earned once AMT income reaches USD 609,350 for single filers and USD 1,218,700 for married taxpayers filing jointly |
State and local income taxes | Most states, and a number of municipal authorities, impose income taxes on individuals working or residing within their jurisdictions. For more information, visit the IRS website. |
Citizens and resident aliens may also claim a standard deduction (instead of itemising deductions). The basic standard deduction for 2024 is USD 14,600 for individuals, USD 29,200 for married couples filing a joint return, and USD 210,900 for heads of households. Individuals, including resident aliens, who are blind or age 65 or over are entitled to an extra standard deduction of up tp USD 3,900.
An individual's capital loss deduction is generally limited to their capital gains plus USD 3,000. Losses from activities not engaged in for profit (hobby losses) are only deductible up to the income produced by the activity. However, since P.L. 115-97 disallows miscellaneous itemized deductions for tax years 2018-2025, hobby losses are effectively non-deductible under current law.
Visit the IRS site for more detailed information.
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Latest Update: November 2024