State and Local Taxes in the United States and Main Treaties Signed among Italy and U.S.A. In the United States, fiscal federalism assumes considerable importance, which provides for the presence not only of federal taxation, but also of taxation at the local level (states, counties and municipalities).
The coexistence of multiple tax entities entails the determination of a significant and particular tax burden on businesses.It should be considered that over 50% of tax revenues linked to a business activity carried out in the United States are the direct responsibility of individual federal states or authorities local administrative authorities (County and Municipality).
The most important “non-federal” taxes are ad. ex .: income taxes, sales taxes, registration taxes for company incorporation, corporate equity taxes, personal wealth taxes, unemployment taxes, road and fuel taxes , taxes on alcohol, tobacco, betting, and pollutants (Carbon Tax); manufacturing taxes; taxes on intangible assets, etc.
With reference to some types of taxes (especially with regard to corporate income tax), application problems may arise as there is the possibility that a company carries out its business in multiple states of the Union, for example by using multiple production plants. In this case, the fundamental problem is to be able to divide the company’s costs and revenues among the various production plants in order to be able to tax the income actually pertaining to each State in each State. Ordinarily, the income produced is therefore divided between the different states in which a company operates, referring from time to time to the actual connection of the business carried out by the company with each state.
Declarations, Instrumental Obligations, Payments
In the United States, the payment of taxes depends on whether or not the fiscal year coincides with the calendar year.
If the fiscal year does not coincide with the calendar year, the companies must submit the tax return by the 15th day of the third month following the end of the relevant year.
If it coincides with the calendar year, the return must be submitted by March 15 of the year following the reference year. In both cases, the aforementioned dates can be extended by six months if the company pays the taxes calculated in advance on the basis of an estimate of the presumed revenues.
The taxes due must be paid in full at the time of submitting the tax return, or, through the advance payment of four installments (15 April, 15 June, 15 September and 15 December), the amount of which must be defined on the basis of a estimate of the tax burden based on the taxes paid the previous year.
In case of omitted or insufficient payment, the company is subject to a penalty determined based on the amount and duration of the omission. On late payments, interest is usually due calculated at a rate that is published in the IRS Internal Revenue Bulletin.
Main Treaties Signed among Italy and U.S.A
Convention against double taxation signed in Rome on 17 July 1984 and ratified by Law no. 763 of 11 December 1985, and in force since 30 December 1985.
A new Convention, attached to Law no. 20 of March 3, 2009 ratifying and executing the agreement, published in the Official Gazette no. 64 of 18 March 2009, reinvigorates the bilateral relations between the two countries with a series of provisions replacing the previous one signed in Rome on 17 April 1984.
The intervention was necessary, as stated in the technical report attached to the provision discussed in the Chamber of Deputies, to regulate relations between the two countries in a more balanced way, also in light of the significant changes in their respective tax systems.
A protocol and a memorandum of understanding are attached to the Convention, which consists of 29 articles. On October 20, 1983, an information exchange agreement was signed in Washington. Finally, also in Washington, agreements for simultaneous tax audits were signed on March 31, 1983 and June 22, 1984.