What are the most ideal cities for cross-border e-commerce to establish overseas warehouses in the United States?
Best US cities for cross-border e-commerce warehouses?
Cross-border e-commerce overseas warehouse refers to the storage center established by cross-border e-commerce enterprises overseas for storing and distributing cross-border e-commerce products. This model stores goods in advance in overseas warehouses closer to consumers in order to meet the delivery requirements of cross-border e-commerce orders more quickly. Therefore, the location of the warehouse center needs to consider comprehensive factors such as local taxes, labor costs, logistics convenience, express delivery, and warehouse rent. Setting up an overseas warehouse in the United States, the most ideal city may vary depending on the specific situation of the enterprise. However, the following cities are generally considered the best choices for Chinese cross-border e-commerce enterprises to set up overseas warehouses in the United States.
01, Los Angeles (LA for short)
Los Angeles is located in California and is one of the popular choices for Chinese cross-border e-commerce enterprises. Los Angeles has busy ports and airports, convenient logistics, and fast customs clearance. In addition, the labor market in the Los Angeles area is relatively sufficient, and labor costs are relatively low. The taxes involved mainly include:
Sales tax: 8.25% (California standard sales tax rate);
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Corporate income tax: 8.84% (California standard tax rate);
Property tax: About 1% of the property market value per year.
02, New York (NY for short)
New York is an important economic center on the east coast of the United States and one of the world’s trade and financial centers. New York has a developed logistics network and advanced supply chain infrastructure, which is very important for cross-border e-commerce enterprises. In addition, New York has a large number of consumers and business opportunities, providing a broad market. The taxes involved mainly include:
Sales Tax: The sales tax rate in New York State is 4%, in New York City it is 4.5%, making a total of 8.5%;
Corporate Income Tax: The corporate income tax rate in New York State is 6.5%, in New York City it is 8.85%;
Property Tax: The property tax in New York City varies depending on the value and type of property.
Chicago is located in the Midwest of the United States and is an important logistics hub. Chicago has a developed network of railways, highways and air transport, making logistics and distribution more convenient. In addition, the cost of warehouse rent in the Chicago area is relatively low, which is attractive to businesses. The main taxes involved are:
Sales Tax: 9.5% (Illinois standard sales tax rate);
Corporate Income Tax: The corporate income tax rate in Illinois is 4.95%;
Property Tax: Property tax in Chicago varies depending on the value and type of property.
Atlanta is located in the southeast of the United States and is an important transportation and logistics center. Atlanta has Hartsfield-Jackson Atlanta International Airport, which is one of the busiest cargo airports in the world. The logistics network and shipping capacity in the area are relatively strong, which is advantageous for cross-border e-commerce companies. The main taxes involved are:
Sales Tax: 8% (Georgia standard sales tax rate);
Corporate Income Tax: Georgia does not have an independent corporate income tax, but adopts the federal corporate income tax system;
Property Tax: Property taxes in Atlanta vary depending on the value and type of property.
Setting up an overseas warehouse in Dallas has the advantage of lower tax burden. Texas is known for its lower tax burden, and there is no personal income tax, which is a great advantage for residents and businesses. The transportation is convenient. Although it is nearly 400 kilometers away from the nearest port in Houston, the railway transportation network is well-developed, which is convenient for the import and export of goods. In addition, the warehousing costs in the Dallas area are relatively low compared to other areas, the labor market is relatively loose, and labor costs are relatively low.
Sales Tax: 6.25% to 8.25%, which is the standard sales tax rate in Texas, but local governments can add additional sales tax. In Dallas, the total sales tax rate is usually 8.25%, which applies to the sale of most goods and services.
Corporate Income Tax: 1%. Texas does not have a personal income tax, but for companies, Texas implements a “margin tax” system. It is calculated based on the company’s gross profit (revenue minus costs), and the tax rate is 1%.
Property Tax: 1.9% to 2.5%. Property taxes in Texas are an important source of revenue, and tax rates vary depending on the assessed value of the property and the county or city where it is located. In Dallas, the property tax rate is about 1.9% to 2.5% per year.
Before Chinese cross-border e-commerce companies set up overseas warehousing centers in the United States, they need to understand the local laws and policies to ensure the legality and compliance of their businesses. They not only need to understand local tax policies, labor regulations, environmental protection regulations, etc., but also need to understand local market habits, logistics and transportation, talent recruitment and training. In the current international environment, they also need to consider the risks of local politics, economy, security, and natural environment, and formulate corresponding risk management plans.
The author of this article is Mr. Mark, Chief Economist of Easy Tax.
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