Does the US Have VAT? No — Here Is What It Has Instead

Does the US have VAT?

No. The United States has no VAT, no GST, and no federal sales tax. In the OECD’s words, the United States “is the only OECD country that employs a retail sales tax rather than a value added tax (VAT) as the principal consumption tax,” and that retail sales tax “is not a federal tax. It is a tax imposed at the state and local government level” (OECD, Consumption Tax Trends — United States).

So the price you see in a U.S. shop or on a U.S. checkout page carries a state and local sales tax where one applies, and the rate depends on where the sale is taxed.

What does the US have instead of VAT?

Three different taxes, none of them a VAT:

Sources: Tax Foundation, State and Local Sales Tax Rates, Midyear 2026 · IRS, Excise tax · CBP, Determining duty rates.

How much is VAT tax in the USA?

There is no VAT rate. The rate that matters is the sales tax rate of the state and locality where the sale is taxed. As of July 1, 2026 (Tax Foundation):

• Highest state rate: California, 7.25%. Indiana, Mississippi, Rhode Island and Tennessee follow at 7%.
• Lowest non-zero state rate: Colorado, 2.9%.
• No statewide sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon. Alaska still allows local sales taxes, which average 1.82%.
• Nationwide: the population-weighted average of state and local rates combined is 7.53%.

Local taxes are why the state rate alone can mislead. A selection of combined rates:

Rates change. Check the state’s own revenue department before you rely on a figure.

Is there a goods and services tax (GST) in the US?

No. GST is the name some countries use for a VAT, and the OECD reports the two together as one tax: “VAT/GST refers to value added tax/goods and services tax” (OECD). The United States has neither.

Is US sales tax the same as VAT?

No. The OECD files both under “taxes on general consumption,” but they are collected differently. A VAT is collected in stages along the supply chain, with each business deducting the tax it paid on its own purchases (OECD International VAT/GST Guidelines). U.S. sales tax is “levied on retail sales of goods and services” (Tax Foundation), with no credit for tax paid earlier in the chain. For sellers used to VAT, the differences that cost money (no input-tax reclaim, no single registration, no reverse charge, no import VAT) are set out in US sales tax vs VAT: what EU and UK sellers get wrong.

Does the US have a federal sales tax?

No. The sales tax is a state and local tax (OECD). What the federal government does impose are excise taxes, which the IRS describes as “taxes imposed on certain goods, services, and activities” (IRS), and customs duties on imports. Neither is a general tax on sales.

Do I pay VAT on goods imported into the US?

No. There is no import VAT. Imported goods may owe customs duty, at the rate the Harmonized Tariff Schedule sets for the item; CBP calls the schedule the source of “duty rates for virtually every item that exists” (CBP). Duty is not a VAT.

Does my US LLC have a VAT number?

No. No U.S. VAT number exists. A U.S. company’s federal tax ID is its EIN, which the IRS describes as “a federal tax ID number for businesses, tax-exempt organizations and other entities” (IRS). If you do not have an EIN yet, here is how a foreign-owned LLC gets one without an SSN.

Do I have to charge VAT to customers in the US?

There is no U.S. VAT to charge. The U.S. question is a different one: whether you must collect a state’s sales tax. That depends on your connection to the state, called nexus. Physical presence is no longer required: in South Dakota v. Wayfair (2018) the Supreme Court overruled the physical-presence rule. The South Dakota law in that case applied to sellers delivering “more than $100,000 of goods or services into the State” or making “200 or more separate transactions” there in a year (South Dakota v. Wayfair, Inc., No. 17-494). Each state now sets its own threshold; our state-by-state nexus guide covers how to check.

How your own country taxes a sale to a U.S. customer, for example whether an export is zero-rated, is decided by your own country’s VAT rules, not by the United States.

Sources

• OECD — Consumption Tax Trends: United States (only OECD country with a retail sales tax instead of a VAT; not a federal tax; VAT/GST definition) (accessed 2026-10-11)
• Tax Foundation — State and Local Sales Tax Rates, Midyear 2026 (rates as of July 1, 2026) (accessed 2026-10-11)
• IRS — Excise tax (accessed 2026-10-11)
• IRS — Employer Identification Number (accessed 2026-10-11)
• U.S. Customs and Border Protection — Determining duty rates (accessed 2026-10-11)
• South Dakota v. Wayfair, Inc., 585 U.S. 162 (2018), opinion text (accessed 2026-10-11)

This article is general information, not tax advice. Sales tax rates and thresholds change frequently; confirm the current rule for any state before acting.