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I am studying to be a Tax Preparer in my state of Oregon. I'm learning how our tax System works. We have no sales tax but we do have income tax.
Our taxes ( SS tax & Medicare tax) are withheld from our wages.
until we do our taxes and the money is returned to us, to help pay the taxes we owe. Mostly everything is basied on money, wages, income from other sources.
I am curious as to how other states such as Washington who do not have income tax and do have sales tax. How does their tax system work? Like with SS & Medicare tax?

2006-11-20 14:26:42 · 1 answers · asked by Ivy 4 in Business & Finance Taxes United States

1 answers

The state of Washington is one of only seven states that does not levy a personal income tax. Neither does the state collect a corporate income tax. However, Washington businesses are responsible for various other state levies. Washington's state sales tax is 6.5 percent, and it applies to services as well as products.[2] Most foods are exempt from sales tax; however, prepared foods, dietary supplements and soft drinks remain taxable. The combined state and local retail sales tax rates increase the taxes paid by consumers, depending on the variable local sales tax rates, generally between 8 and 9 percent[3]. An excise tax applies to certain select products such as gasoline, cigarettes, and alcoholic beverages. Property tax was the first tax levied in the state of Washington and its collection accounts for about 30 percent of Washington's total state and local revenue. It continues to be the most important revenue source for public schools, fire protection, libraries, parks and recreation, and other special purpose districts.

All real property and personal property is subject to tax unless specifically exempted by law. Personal property also is taxed, although most personal property owned by individuals is exempt. Personal property tax applies to personal property used when conducting business or to other personal property not exempt by law. All property taxes are paid to the county treasurer's office where the property is located. Washington does not impose a tax on intangible assets such as bank accounts, stocks or bonds. Neither does the state assess any tax on retirement income earned and received from another state. Washington does not collect inheritance taxes; however, the estate tax is decoupled from the federal estate tax laws, and therefore the state imposes its own estate tax.

2006-11-20 14:40:41 · answer #1 · answered by Beeswax 4 · 1 0

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