🌱 Origin Series #10: U.S. State Tax – 50 Shades of Grey “Why your U.S. tax rate depends on your zip code.”

Many Canadians expanding into the U.S. assume that once they’ve dealt with the IRS, they’re good to go.

Not quite.

Because in the U.S., federal tax is just one layer.

The state tax layer? That’s where things get interesting.

50 States, 50 Tax Systems

Each U.S. state is like its own mini-country when it comes to tax:

📍 Some have no income tax at all (hello Florida, Texas, Wyoming)

📍 Others have corporate tax, but no sales tax (like Oregon)

📍 A few want a piece of your revenue even if you just sell online to their residents

📍 And many have different filing thresholds, deadlines, and rules

That’s not grey... that’s chaos in 50 shades.

📜 How did we get here?

The U.S. Constitution gives states wide autonomy over tax.

Unlike Canada— where tax authority is more centralized— American states fiercely guard their tax turf.

That’s why there’s no national sales tax, no harmonized return, and no universal treatment of income.

🔍 What this means for Canadians

If you're expanding into the U.S., don’t just look at Delaware vs. Wyoming.

Ask:

• Do I have nexus (a tax connection) in any states?

• Am I triggering sales tax collection through online sales?

• Will my income be taxed differently across states?

• Do I need to file in multiple states?

  
  

Because yes— you can be compliant federally and still out of step at the state level.

🧠 The takeaway?

The IRS is just one player.

When doing business in the U.S., state-level tax can quietly shape your cost, compliance, and risk.

Plan accordingly— and zip code by zip code.