If you’re thinking of expanding your business or forming a company in the United States, it’s essential to understand how its tax system operates. Unlike many Latin American countries, the U.S. system is more complex and highly decentralized.
A Federal, State, and Local Tax Structure
Rather than a single nationwide tax regime, the U.S. tax framework functions on three levels:
Federal level Administered by the IRS (Internal Revenue Service), it applies across all fifty states.
State level Each state maintains its own tax code, with rates and rules that can vary dramatically.
Local level (counties or cities) Some municipalities impose additional levies—often on sales or property—if your business has a local presence.
As a result, a single company may owe taxes at multiple layers depending on where it operates and what activities it conducts.
What Types of Taxes Exist in the U.S.?
Here are the most relevant taxes individuals or businesses may encounter:
1. Income Tax
Individuals: Federal rates are progressive, ranging from 10% to 37%. Most states also levy their own personal income tax.
C-Corporations: Pay a flat 21% federal rate.
LLCs: Typically “pass through” profits to owners, who report them on personal returns rather than paying corporate tax.
Tip: States like Florida, Texas, and Wyoming impose no state income tax, making them attractive for business registration.
2. Sales Tax
Levied by states and localities (no federal sales tax).
Rates vary widely—from 0% up to over 9%.
Sellers with a sufficient economic connection (“nexus”) to a state must collect and remit sales tax on goods (and some services).
E-commerce and digital sellers often trigger nexus rules even without a physical location, so it’s critical to track your sales volume per state.
3. Payroll Taxes
If you employ staff in the U.S., you must withhold and pay:
Social Security & Medicare (FICA)
Federal and state unemployment insurance
Any applicable state payroll taxes
These obligations are shared between employer and employee and reported regularly.
4. State Corporate Tax (Franchise Tax)
Some states charge businesses simply for the privilege of operating there:
Delaware: An annual flat franchise tax, even if no income is earned.
Texas, California: Similar fees based on a company’s structure or revenue.
This isn’t an income tax but rather a fee for legal existence.
5. Other Local or Special Taxes
Depending on location and industry, you may also face:
Property tax
Excise taxes on alcohol, tobacco, or fuel
Business licensing fees
What If You’re a Foreigner with an LLC in the U.S.?
Many Latin American entrepreneurs form U.S. LLCs to bill in dollars and use platforms like Amazon or Stripe. Even without U.S. residency, you may still have obligations:
Income reporting: You might owe no federal income tax if you lack nexus and physical presence, but you must still file returns.
Information returns: Single-member foreign-owned LLCs must submit Forms 5472 and 1120.
Sales tax: Selling to U.S. customers can trigger collection duties, even without an office there.
Filing these correctly avoids penalties and keeps your LLC in good standing.
When Are Taxes Due in the U.S.?
April 15: Deadline for individual returns and single-member LLCs treated as disregarded entities.
March 15: Deadline for entities electing C-Corp or S-Corp status.
Quarterly estimated payments: April, June, September, and January if you anticipate a significant tax liability.
State deadlines: Vary by jurisdiction—track each state’s calendar carefully.
Recommendations for Latin American Entrepreneurs
Don’t underestimate the system. U.S. tax laws are detailed and strictly enforced.
Choose your state wisely. Registration location directly impacts your tax burden.
Keep your books from day one. Even pre-revenue, accurate records prevent headaches later.
Seek expert guidance. Especially if you’re operating remotely or have mixed domestic and international income.
File returns even if revenue is zero. Many states require annual filings to maintain good standing.
Need Help Getting Started?
We assist Latin American businesses, freelancers, and startups to:
Form and register their LLC in the U.S.
Meet all federal, state, and local tax requirements
Prepare and file the right IRS forms
Determine sales tax obligations
Maintain clear, Spanish-language accounting records
The entire process is 100% online, hassle-free, and tailored to your needs. With the right support, the U.S. tax system can become an opportunity to grow globally—rather than a barrier.
Ready to dive in? Book a free consultation today and get your U.S. tax strategy on track.
Schedule a consultation with an advisor to solve all your doubts.
