GST Tax USA: What You Need to Know About Sales Tax in the US

When people search for GST tax USA, Goods and Services Tax is a consumption tax used in countries like Australia, Canada, and India, but not in the United States. Also known as value-added tax, it's a system the US never adopted. Instead, the US runs on sales tax, a state-by-state tax added at checkout for most goods and some services. If you’re used to GST in Australia or India, the US system will feel messy—because it is. There’s no federal GST. No national rate. No unified filing system. Just 50 different sets of rules.

Each state sets its own sales tax rate, a percentage added to the price of most retail items. California charges 7.25% at the state level, but local taxes can push it over 10%. Texas has 6.25%, but some cities add 2% more. Then there are states like Oregon and New Hampshire with zero sales tax. And don’t forget: some items are exempt. Groceries? Usually tax-free. Clothing? Sometimes. Digital products? It depends on the county. Even services like haircuts or repairs can be taxed in one state and not another. This isn’t just confusing—it’s a nightmare for online sellers, freelancers, and small businesses shipping across state lines.

That’s why so many US businesses use tax automation tools, software that calculates, collects, and files sales tax based on where the customer lives. Platforms like Shopify, QuickBooks, and Avalara handle this automatically. Without them, you’d need to track 11,000+ tax jurisdictions across the country. And if you’re an NRI living abroad but selling to US customers? You still need to collect tax if you have economic nexus—meaning you hit a sales or transaction threshold in a state, even without a physical presence. The Supreme Court changed that rule in 2018, and now even small online shops must comply.

Don’t mix up GST with VAT. They’re similar, but VAT is collected at every stage of production, while US sales tax hits only the final buyer. And forget about GST refunds like in Australia. The US doesn’t offer those. Businesses can’t reclaim tax paid on supplies unless they’re in a state with specific resale certificate rules. If you’re running a startup in India and thinking about selling to the US, this is where things get real. You need to know where your customers are, what they’re buying, and whether you’re legally required to collect tax. It’s not optional. It’s not a suggestion. It’s the law.

What you’ll find in the posts below aren’t guides about GST in the US—because it doesn’t exist. But you will find real, practical advice on how US tax systems work, what businesses actually deal with, and how to avoid costly mistakes when dealing with money across borders. Whether you’re trying to understand why your online order got taxed differently than last time, or how to file taxes as a freelancer working with US clients, the answers are here—no jargon, no fluff, just what you need to know.