When tourists visit America, they expect some tax benefits. Many think that there is no tax refund at all, but fortunately, there is some window for a tax refund.
No doubt, America is among the best places to visit, have fun and buy electronics, clothes, etc. Approximately 79 million international tourists visit the US every year. The common question we hear from them is, “Is there any tax benefit for the foreigners coming to the US on B1 and B2 visas?
The answer depends on the state’s policies from where you buy. If you buy from Texas and Louisiana, you will get sales tax refunds. Subsequently, if you are a tourist from Asia or Europe, you will get the best products at cheaper rates at outlet malls.
Stay tuned and know more about the possibilities and requirements of a tax refund.
Sales Tax Refund in the US
- 1 Sales Tax Refund in the US
- 2 Essentials to get the Tax Refund as a tourist
Generally, there is no sales tax refund on the item you buy from the vendor, and there is sales tax on every transfer of title or possession. So you pay a certain tax to the government for purchasing the taxable item. US citizens are not eligible for this.
However, there is an exception to exporting the items outside the US. Certain states (Texas, Louisiana) allow the tourists to claim the tax refund on taxable items and US citizens can claim a refund if they travel outside the US within 30 days.
State and Federal Sales Tax
In the US, there are no federal sales taxes, but there are state sales taxes. So, when you buy an item, the tax goes to the local or state government instead of the federal government.
Essentials to get the Tax Refund as a tourist
Minimum tax amount
You won’t get a tax refund on every purchase with whatsoever amount. There is a minimum amount of tax you must have per receipt or on the total purchase from a brand’s store or outlet.
In Texas, the minimum tax should be $12 tax per receipt or combined from the same brand.
So, in Texas, with an 8.25% sales tax, you have to purchase for at least $150 from a single store or the brand to get a refund.
Submit the original receipts
You must submit original receipts at the tax refund counter. If you have any duplicate, a photocopy, or reprint sales receipt, it will not be accepted. Digital or email receipts are also not accepted unless you purchased online and the receipt has the delivery address in that state.
Physical inspection of purchased items
The items you purchase will also be physically inspected. The item should be new and in unused condition with all intact tags.
Passport and I-94
As a tourist, you have to show your visa/passport and I-94 with an entry stamp on them.
➡LEARN MORE: How to Get a Big Tax Refund with No Dependents?
30-Days time limit
You must purchase it within 30 days of your international travel.
You will get the refund only if the products are to be sent outside America or if you (as a US citizen) will travel outside the US.
As the products are to be taken outside the US, you have to show your departure details or flight ticket.
There is some crazy processing fee for the refund. For instant cash, the processing fee is 50% of the tax refund. For the check or PayPal refund, it is 35% of the tax refund.
Additionally, you will be charged $4 for every single brand/store purchase.
Food and services
There will be no refund on food or services purchased
You will get a refund only if you buy from the participating stores. There are more than 6500 stores on the list.
For years I have studied the irs regulations regarding forms and taxes. All the information in this blog is sourced from the Internal Revenue Service (Irs) of the United States government .
Salesforce Certified SALES & SERVICE Cloud Consultant in february 2020, Salesforce Certified Administrator (ADM-201) and Master degree in “Business Analytics & Big Data Strategy” with more than 13 years of experience in IT consulting.