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How to claim US tourist tax refund after shopping

Discovering top USA tax free shopping destinations for clothing, electronics, and more is the dream of any tourist visiting the country, while unleashing unbeatable value for money in the process. So, every year visitors from Asia, Europe and the world over travel to the U.S to take advantage of significantly lower prices when shopping in different retail outlets.

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To this effect, we will attempt to unlock the secrets which lets tourists become eligible for tax refunds in certain states, such as Texas. Helping you dive into this comprehensive guide for insights on securing tax refunds, including eligibility criteria, essential conditions, and answers to frequently asked questions.

Do you qualify to get a Tax Refund for Shopping in the US at Malls or Online Stores?

The eligibility for sales tax refund in USA depends on the specific state where you make your purchase. States like Texas often provide tax refunds to tourists. While there isn’t an official list on the US Government or US Tourism websites outlining return of sales tax by state, certain regions may offer this benefit.

Uncertainty surrounds the possibility of obtaining a tax refund for online purchases. Contact the online retailer for clarification, as it hinges on the destination of your shipped goods and the seller’s state tax policies. Additionally, even if a refund is possible, numerous conditions may impact the amount.

 

A man filling out some forms to claim US tourist tax refund after shopping

 

Which Is More Important In The Tax Refund Process? State Sales Tax Or Federal Sales Tax?

In the United States, there is no nationwide Federal Sales Tax; instead, individual states or local governments levy State Sales Tax on purchased goods. The US Federal Government typically imposes customs duties or tariffs at the federal level, which are not directly billed to end consumers.

The sales tax incurred during shopping in the US is directed to the relevant state or local government, bypassing the federal government. Consequently, when exporting goods outside the US, individuals often qualify for a refund on the State Sales Tax or Local Government Sales Tax.

Limitations Faced In Claiming Sales Tax Refund For Foreigners In USA

The CBP website explicitly states that “The United States Government does not refund sales tax to foreign visitors. Sales tax charged in the United States is paid to individual states, not the Federal government.”

This implies that, at the national level, the US Federal Government does not carry out any sales tax deduction, and individuals must inquire with the specific US State from which the purchase was made.

It’s crucial to emphasize that the eligibility for a Sales Tax refund is entirely contingent on the US State where the purchase was made as a visitor, and it is unrelated to the US Government or Federal Government.

 

Calculating How to claim US tourist tax refund after shopping

 

What Are The Stipulated Requirements to Get Tax Refund in USA As Tourist or Resident?

The conditions for obtaining a tax refund differ depending on the specific US State. Obtaining a substantial refund can be a bit intricate, as it typically necessitates making additional purchases within a single store.

The majority of prerequisites and conditions apply uniformly to both foreign visitors and US citizens, with the sole distinction lying in the locations and timing at which they can seek a sales tax refund. Here are the general criteria for obtaining a Tax Refund for Tourists:

Minimum Amount

Each state sets a minimum tax amount required per receipt or purchase made from a brand or outlet store. In Texas, for instance, a minimum of $12 in tax per receipt or combined receipts from the same brand store is necessary. With an 8.25% sales tax in Texas, your purchase in a single store or brand outlet must be at least $150 to qualify for a refund.

Original Receipts

Submitting original receipts is essential at the tax refund counter. Duplicate, photocopy, or reprint sales receipts are not accepted. Only the first original receipt, physically printed, is valid. Digital or email receipts are acceptable only for online purchases from a brand store, provided the receipt includes the delivery address of the goods within that state. For online purchases, include the packaging slip.

 

A receipt obtained after purchasing for an item

 

Within 30 days

The purchase must be made within 30 days from your international travel or departure date from the US.

International Travel

A refund is granted only if you are traveling outside the US, and the purchased items will remain outside the country. Essentially if you are exporting the items to another country, which can be settled by presenting the original receipt for a refund. Sales within the US are considered final, with no returns permitted for items purchased here.

Physical Inspection

The purchased item must be presented for physical inspection and should be in new and unused condition with all tags attached.

Passport, I-94 / Entry Stamp

Presentation of your Visa/ Passport and I-94 with an entry stamp is required if holding a foreign passport.

Departure Information / Flight Tickets

Displaying international departure information or a flight ticket itinerary is necessary. US citizens must present the boarding pass to obtain a tax refund.

Items should Depart US & State

The items purchased in the US must accompany you and depart from the state of purchase and the US.

Food or Services

No refunds are provided for food or services purchased.

 

A woman paying at the till in a coffee shop

 

Participating Stores

Tax returns for visitors to USA are only applicable to purchases from participating stores, a list of which depends on the state. In Texas, there are over 6,500+ listed stores, but it’s crucial to be cautious about specific brands, as some may not be eligible for a refund, such as Abercrombie & Fitch.

Fee Structure

Your tax refund may incur a processing fee, contingent on the state. Here are the available options:

  • Instant Cash: Opting for instant cash involves a 50% processing fee for the tax refund.
  • Check / PayPal: If you prefer a check or a refund to PayPal, the processing fee is 35% of the tax refund. Additionally, a charge of $4 may apply for each individual store or brand purchase.

Refund Collection Points

Both US citizens and non-US citizens can collect tax refunds at major international airport terminals. These terminals typically feature a designated Tax refund desk. For non-US citizens, certain mall locations within the state also accommodate tax refund claims. Refer to the state’s website for specific locations.

 

A woman paying for an item at a retail store

 

US Tourist Tax Refund Guidelines

Tax refund policies differ by state, and there is no uniform sales tax percentage set. It’s essential to review the Sales Tax and Tax Refund policies in the respective state before shopping to ensure eligibility for a tax refund. For example, Delaware has no sales tax, hence no refund.

Crucial Tips To Claim US Tourist Tax Refund

Whether you’re a tourist or resident, securing a tax refund can be advantageous, especially after substantial shopping endeavors. However, keep in mind that providing the original purchase receipt is a prerequisite.

Having spent over $900 without benefiting from a significant tax refund due to a lack of awareness about specific facts and conditions could be annoying, so I offer the following tips to help you maximize the chances of getting a refund:

  • Duplicate Receipts or Re-prints: Upon making a purchase, request a duplicate receipt or a re-print. This secondary copy can prove valuable for warranties in your home country or international locations.
  • Photograph the Original Receipt: Capture a photo of the original receipt. This photographic documentation can be useful if the warranty location outside the US requires verification.
  • Consolidate Purchases at One Brand Store: To ensure eligibility for a tax refund, concentrate your shopping within a few selected brands or outlets. Meeting the minimum requirement is crucial, and purchasing across multiple brands may lead to falling short of the minimum threshold. I learned this firsthand when my diverse purchases, spread across different brands, failed to meet Texas’s minimum refund amount.
  • Warranty Registration: For electronic items with an online registration option, take advantage of it. Registering the product for warranty purposes, along with retaining the original receipt, adds an extra layer of protection.

 

A lot of purchase receipts

 

Frequently Asked Questions (FAQs)

Who Processes Tourists’ Sales Tax Refunds – Federal Govt or State Govt? IRS?

Sales tax refunds are facilitated by the respective State or local Government where the purchases were made. This is a state sales tax refund, and the Federal Government or IRS does not provide sales tax refunds.

Am I Eligibility for Tax Refunds I am a US Resident on different Visa Categories (H1B, L1, F1, etc.)?

Yes, eligibility for tax refunds is irrespective of visa status. Whether on H1B, L1, F1, or any other visa, anyone traveling outside the US can claim a tax refund, subject to the conditions outlined in the preceding article.

Are There Tax Refund Possibilities for US Citizens and Are There Travel Requirements?

US Citizens can also avail themselves of a tax refund, provided they travel outside the US within 30 days of purchasing the goods. Claiming the refund is only possible at airports on the day of departure, adhering to the specified conditions and requirements.

Are there VAT or GST Refunds for Tourists or Residents in the US?

When shopping in the US, individuals are not subjected to Value Added Tax (VAT) or Goods and Services Tax (GST). Unlike many countries, the US employs the concept of Sales Tax for shopping transactions.

Are Online Purchases on Platforms like Amazon.com eligible for Tax Refund?

The eligibility for a tax refund on online purchases in the US, especially on platforms like Amazon.com, depends on the state’s policies. If the state imposes sales tax and has provisions for refunding it, online shoppers may likely qualify for a tax refund. It is advisable to verify this with the online vendor and review the state’s policy for clarification.

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Fuse

travel and tourism blogger

Chinedu Okoronkwo known fondly by friends as Fuse is a Father, biochemist, certified business administrator and entrepreneur specializing in supply chain management and logistics, with vast experience in founding and building businesses in this space. Having worked in an embassy for a number of years and with a passion for traveling, he started Fuse Chronicles, a platform that offers information on everything related to global travels and issues confronting cultural acclimatization around the globe. 

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