Sales tax in the US

Question

We’re a Birmingham-based, brand innovation company doing most of our business in the US. Both my wife and I are legally resident in the UK, but are American citizens. We have set up a second home, and a second studio, in Charleston South Caroliina in the last few months. I’m wondering if it’s mandatory to set up an LLC in the US, which I suspect will result in double sales taxation. I know at the end of this year, I’m going to be asked by the local Charleston Business authority to pay sales tax on our turnover, a tax which we’re already paying to HMRC. What’s the best way to set up a UK business in the States, without being double-taxed? We meet with American clients, usually, but not always, in the US, and will be doing more of it in our new Charleston Studio. the work happens mostly in our West Midlands studio, but some in our Charleston studio. We consider ourselves a British business exporting a UK service.

Answer

David. I believe you would qualify for double tax relief.
You can find out a little about that here http://www.hmrc.gov.uk/international/business-dta.htm

Answer

Thanks for the link Paul.

Answer

Hi David

If you incorporate in the US as well, you may be better off with a UK limited entity holding the share capital of the US company and not you or your wife. You and /or your wife would own the shares in the UK holding company. this arrangement should avoid the personal double taxation issue on your world wide income.

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